HOW IKEA MANAGES THE GLOBAL ENVIRONMENT

Ikea is the largest furniture chain in the world, and in 2011 the Swedish company operated over 270 stores in 25 countries. In 2011 IKEA sales soared to over $35 billion, or over 20% of the global furniture market; but to its managers and employees this was just the tip of the iceberg. They believed IKEA was poised for massive growth throughout the world in the company decade because it could provide what the average customer wanted: well-designed and well-made contemporary furniture at an affordable price. IKEA’s ability to provide customers with affordable furniture is the result of the way it expands globally and operates its global store empire. In a nutshell, IKEA’s global approach focuses on simplicity, attention to detail, cost consciousness, and responsiveness in every aspect of its operation and behavior.
IKEA’s global approach derives from the personal values and beliefs of its founder, Ingvar Kamprad, about how companies should treat their employees and customers. Kamprad, who is in his 80s (and in 2010 ranked as the 11th richest person in the world), was born in Smaland, a poor Swedish province whose citizens are knowns for becoming entrepreneurial, frugal, and hardworking. Kamprad definitely absorbed these values – when he entered the furniture business, he made them the core of his management approach. He teaches store managers and employees his values; his beliefs about the need to operate in a no-frills, cost-conscious way; and his view that they are all in business “together”, by which he means that every person who works in his global empire plays an essential role and has an obligation to everyone else.
What does Kamprad’s approach mean in practice? All IKEA employees fly coach class on business trip, stay in inexpensive hotels and keep travelling expenses to a minimum. And IKEA stores operate on the