COMPANY HISTORY
IKEA was founded in 1943 by Ingvar Kamprad. Its first store was opened in 1958 in Almhult, Sweden and its flagship store opened in Stockholm in 1965. By 1965, IKEA was a well loved household name in the home of many Swedes. The company’s corporate slogan was “‘Low price with meaning’” (Moon, 2008, p. 24). Its main objective was to challenge the status quo by producing a good product at a low price with the development of innovative and cost-efficient methods. Beginning in 1969, IKEA began to expand its business into additional foreign markets starting with Denmark. IKEA continued to provide its consumers with quality products by utilizing “high-quality materials on the furniture surfaces that were visible and …lower-quality materials on surfaces that were low stress and less visible to the consumer” (Moon, 2008, p. 23). This idea was well received by its consumers and helped IKEA maintain a competitive advantage within the furniture industry. By 1984, IKEA had expanded into 16 different countries with over 167 stores (IKEA Timeline, 1999-2008). IKEA made its debut appearance onto U.S. soil in 1985 with its first store in Philadelphia, PA. From 1997 to 2001, IKEA’s revenue had doubled in the United States from $600 million to $1.27 billion. By 2002, the United States was IKEA’s third largest market and housed 14 of IKEA’s stores (Moon, 2008, p. 27). IKEA’s goal is to have 50 stores in operation in the United States by 2013.
SWOT ANALYSIS
Strengths
• Successful business model – One of the primary strengths of IKEA is in its capability to develop and maintain effective operations management. The operational success is based on several pillars: cost effective production, fast product to market delivery and responsive operations
• Strong brand – IKEA heavily invests in the consistent development and securing of specific brand image –