...IKEA's historical product line policy. Others wondered if the company had not bitten off too much by attempting major new market entries simultaneously in two European countries (United Kingdom and Italy), the United States, and several Eastern bloc countries. Finally, there was widespread concern about the future of the company without its founder, strategic architect, and cultural guru, Ingvar Kamprad. IKEA BACKGROUND AND HISTORY In 1989, furniture retailing worldwide was a fragmented industry in which small manufacturers and distributors catered to the demands of their local markets. Consumer preferences varied by region, and there were few retailers whose operations extended beyond a single country. IKEA, however, had repeatedly bucked market trends and industry norms. Over three and a half decades, it had built a highly profitable worldwide network of furniture stores (see Exhibit 1). COMPANY ORIGINS IKEA is an acronym for the initials of the founder, Ingvar Kamprad, his farm Elmtaryd, and his county, Agunnaryd, in Smäland, South Sweden. In 1943, at the age of 17, Kamprad began his entrepreneurial career by selling fish, Christmas magazines, and seeds. Within a few years, he had established a mail-order business featuring products as diverse as the new ballpoint pens and furniture. It was in furniture, however, that he saw the greatest opportunity. The postwar boom changed the traditional Swedish practice of handing down custom-made furniture through...
Words: 3535 - Pages: 15
...Office User Table of Contents INTRODUCTION 3 BACKGROUND (ENTERPRENUR & BUSINESS) 3 REASON BEHIND SUCCESS 5 LITERATURE REVIEW 7 CONCLUSION 7 REFERENCE LIST 8 INTRODUCTION According to Richard Branson (2000) innovative business is one that live and breathes in out of box thinking and its not just good idea but combination of good ideas and motivated staff and good understanding of customer wants and needs. (Tidd et.al. , 2005) When we talk about IKEA , we start thinking of words like innovative furnishing , cheap , great quality , modern , good store . Ikea has been able to bring a cultural shift how furniture is purchased and who buys the furniture i.e. now middle income families and younger generation are also buying modern furniture as its cheap. Ikea is prime example of out of box innovation as they introduced things like flat pack furniture , furniture catalog , particle board furniture , restaurant in furniture store , and store layout ( ikea maze) where customers travel to all the departments of the store making people imaging their future homes which have previously never done by furniture store as only traditional furniture store were there with their expensive needed to be custom made. Main purpose of the report understand how innovation leads and supports entrepreneurship. This report also give brief history and knowledge of Ingvar Kamprad : the father of modern furnishing and how his idea caused...
Words: 1817 - Pages: 8
...Background IKEA is a privately held, international home products company that designs and sells ready-to-assemble furniture such as beds, chairs, desks, appliances and home accessories. The company is the world's largest furniture retailer1. Founded in Sweden in 1943 by Ingvar Kamprad, who later became one of the richest people in the world, 2 The Company is known for its modern architectural designs on various types of appliance and furniture, often associated with a simplified eco-friendly interior design3. In addition, the firm is known for the attention it gives to cost control, operational details and continuous product development, allowing it to lower its prices by an average of two to three percent over the decade to 2010, while continuing its global expansion.4 As of October 2011, IKEA has 332 stores in 38 countries. In fiscal year 2010, it sold $23.1 billion worth of goods, a 7.7 percent increase over 2009.5 On February 17, 2011, IKEA announced its plans for a wind farm in Dalarna County, Sweden, furthering the furniture giant's goal of running on 100 percent renewable energy.6 The IKEA website contains about 12,000 products and is the closest representation of the entire IKEA range. There were over 470 million visitors to the IKEA websites in the year from September 2007 to September 20087. IKEA is the world's third-largest consumer of wood, behind The Home Depot and Lowe's.8 Things were going so well for the company, that in 1973, the company's German executives...
Words: 1054 - Pages: 5
...------------------------------------------------- Leeds Metropolitan University ------------------------------------------------- Leeds Business School ------------------------------------------------- Corporate Strategy Critically examine how the success of Ikea has been supported by its organisational culture Mona Thorvaldsen, Kate Mulvana, Joan Kawalewale, Tom A. Trosterud, Jodie Evans MA Public Relation Management & MA Business Studies Semester Two Module Leader: Lawrence Bellamy Contents Page No Chapter 1 – Introduction | 3 | | | | | Chapter 2 – Background | 3 | | | | | Chapter 3 - Appraisal | 4 | | | | | Chapter 4 – Analysis | 9 | | | | | Chapter 5 – Conclusion | 14 | | | | | Bibliography | 15 | Executive summary This report examines the corporate culture of the global furniture leader IKEA and discusses the link between Ikea’s culture and its performance. The cultural web is used as a device for breaking up the complexity of organisational culture and for demonstrating that Ikea enjoys a strong and consistent culture. The report identifies synergy between Ikea’s culture and strategy, arguing that culture has given the organisation competitive advantage. Furthermore it points to the complex set of factors influencing performance, and how Ikea’s culture is one of several components in its success-formula. 1.0 Introduction Organisational culture...
Words: 3872 - Pages: 16
...now owned ultimately by a Dutch trust, and controlled by the Kamprad family. Various holding companies also handle several different aspect of Ikea’s operation, such as franchising, manufacturing, and distribution. These activities are separated into two groups that are based out of the Netherlands. The first group is the INGKA Foundation that owns the IKEA group. Second is the INGKA Holding B.V. this is the parent company for all IKEA group companies. Other key people involved in Ikea are the founder Ingvar Kamprad, the group president and CEO Anders Dahlvig, and Hans Gydell who is the President of Inter Ikea group. The name Ikea comes from the first two letters of the boy’s name, which is Ingvar Kamprad along with the first letters in his farms name and the village in Sweden that he grew up in. Ikea originally sold pens, picture frames, table runners, jewelry, wallets and nylon stockings with the idea of meeting consumer needs with products at reduced prices. Today Ikea is now a major retail experience with 128,000 workers in 253 stores spanning across 24 countries while generating annual sales of more than 21.1 billion euros with their top five sales in Germany, USA, France, UK, and Sweden. Their main mode of entry is by franchising in other countries. Most countries pay a franchising fee of 3% of the total revenue to Inter IKEA systems. Ikea is a company that is fundamentally based on the cultural background of Sweden. It also comes as no surprise that their company ...
Words: 964 - Pages: 4
...Case analysis – IKEA Background IKEA was established by Ingvar Kamprad in Sweden in 1943, by now it has been becoming one of the world’s most well-known global brands. At the beginning, IKEA is the small grocery store until Ingvar started to provide stylish functional but low-priced furniture. At that time, his dream is to sell good furniture with low price so that most people can afford them, which was to become the whole IKEA’s corporate philosophy. In order to lower the assembling price, IKEA designed the self-assembly and flat-packed furniture. As the company growing swiftly, IKEA go down to its international expansion. It has made a set of adjustments to fit to the local market and cooperated with local suppliers to save the cost, until now IKEA has become the classic case in corporate management and internalization. Analysis - essential factors to succeed: The essential factors can be extracted as follows: 1. Low-priced strategy. “to provide the good furniture with low price so that most of the people can afford them”, this is the dream of a young boy in 1950’s, but has become the key feature of IKEA. At earlier time, furniture is very expensive, but the emersion of IKEA changed this situation, IKEA products are much less expensive than equivalent product from other store, there is no doubt that IKEA will be definitely acceptable in middle-class household and the sales began to take off. Low-priced strategy enables the IKEA to gain the majority part of the market...
Words: 681 - Pages: 3
...IKEA: Leadership Leads to Product Innovation and Globalization Human Resource Management IKEA: Leadership Leads to Product Innovation and Globalization IKEA is a worldwide furniture retailer which sells ready-to-assemble furniture. The IKEA story started in 1926 by its founder ‘Ingvar Kamprad’ was born is Southern Sweden. He was raised on ‘Elmtaryd’, a farm near the small village of ‘Agunnaryd’ if we added all the quotes we can see how the IKEA name was created. The following time table shows how IKEA became an international retailer in 40 countries around the world. Now IKEA is the world’s largest furniture retailer and seller of ready-to- assemble furniture, as we can see from the previous time table that IKEA is expanding globally in different regions all around the world, they has 338 stores in 40 different countries. And in 2012 IKEA achieved 8% growth in profit compared to the previous year, they reached $4.34 billion. Vision: To create a better everyday life for the many people. Mission: Offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them. With the set vision and mission they are focusing on three main business ideas: * Product Range and Innovation: IKEA products are known for its quality and innovation, they try to create unique products that offer home furnishing solutions for every room in the home, making sure that these products meet daily wants and...
Words: 2062 - Pages: 9
...MANAGERIAL ECONOMICS Subject assignment’s: IKEA Model Professor: Terence Tse CONTENTS Abstract 3 Introduction 4 Part 1: Microeconomic analysis 5 I/ THE 5-FORCES APPLIED ON IKEA 5 1. Internal rivalry/competitors 5 2. Bargaining Power of Supplier 8 3. Bargaining power of Buyers 9 4. Threat of Potential Entrants 10 5. Threat of Substitutes 10 II/ APPLICATION OF SEVERAL MICRO ECONOMIC CONCEPTS 11 Part 2: The macroeconomic environment of IKEA: 15 I/ KEY POINTS OF SWEDEN ECONOMY 15 II/ ANALYSIS OF THE MONETARY AND FISCAL POLICIES 16 III/ SWEDEN ECONOMY NOWADAYS AFTER CRISIS 19 Part 3: Macroeconomics of competitiveness 19 I/ THE DIAMOND MODEL ...
Words: 6988 - Pages: 28
...IKEA Case Analysis Company Background: IKEA Company Background IKEA was founded in 1943 by a Swedish entrepreneur Ingvar Kamprad, who still has control over the company through the INGKA Foundation, based in the Netherlands. Swedish company IKEA was the world’s largest furniture retailer since the early 1990’s. It sold inexpensive furniture of Scandinavian design. Nowadays, the company operated in 55 countries with a workforce of 76,000. IKEA offered nearly 12,000 items to the home furnishings market worldwide. It sold a wide range of products including furniture, accessories, bathrooms and kitchens at 186 retail stores in 30 countries across Europe, North America, Southeast Asia, Middle East and Australia. IKEA enjoyed high brand equity. Issues Encountered and Solved: 1st issue: Could undercut prices of established retail outlets . Accused of imitation and manufacturers no longer sell to IKEA. Solution: Designed their own products, looked for a manufacturer and found one in Poland and luckily they were much 50% cheaper that the previous ones. 2nd issue: Accused of low quality. Solution: Swedish magazine Allt I Hemmet published a comparison on IKEA furniture and traditional Swedish retailers. 3rd issue: Employees could not keep up with customer orders and long lines formed at the checkouts and merchandise pick-up areas. Solution: Self-service pick-up solution – customers can enter the warehouse and load flat-packed furniture into trolley then brings it to the...
Words: 403 - Pages: 2
...migration and the movement of people and dissemination of knowledge. Mission Statement - “to create a better everyday life for the many”. Focus Areas & Goals:- Children: IKEA believe that children are the most important people in the world. By supporting their local communities, they hope to assist in children to achieve their fullest potential through development and learning. IKEA has experience in this area and can make a difference. Environment: “Low Price, but not at any price”. IKEA aim to have a positive impact on the local environment and how their business may impact upon it. Their store effectiveness, is measured on how environmentally responsible they are. (IKEA.com (2012). About IKEA, The IKEA Way) Introduction Ingvar Kamprad was born in 1926 on a farm called Elmtaryd, in the small Swedish village of Agunnaryd. At the young age of just 5, he was already showing that he was to become a successful entrepreneur by selling matches to his parent’s friends and neighbours and within two years was selling further afield by travelling to other villages on his bicycle and making a profit. In 1943, at the age of 17 and using money given to him by his father for doing well in his studies, he started his own business. Initially, he traded in items such as jewellery, picture frames, wallets, pens, pencils, table runners, greeting cards, etc. He named his business IKEA, an acronym comprising of his name, the farm where he grew up and his hometown....
Words: 3499 - Pages: 14
...most company preferred more competence in the complex and global market. Nowadays customers more concern about how long their ordered product reach to them rather than worrying how the company will deliver the products. As a consequence, time can be used as an indicator in distribution logistic. This research is conducted to explain the consequences of distribution logistic and the way IKEA will gain competitive advantage by utilizing it. We will identify the key elements in distribution logistics and find the competitive advantages of IKEA through analyzing the case study of IKEA and they are: speed, dependability and last but not least is flexibility. Keyword: IKEA, Distribution logistic, Competitive advantage. INTRODUCTION 1.1 BACKGROUND Logistics management is the governance of supply chain functions. Logistics management is important not solely to producing and assembly industries, that are goods-oriented, however conjointly to selling, transport and alternative distribution or service- oriented industries. Daskin (1985) defined logistics as “the design and operation of the physical, managerial and informational systems needed to allow goods to overcome time and space”. Another definition promulgated by the Council of Logistics Management Ballou (1992) is: the process of planning, implementing and controlling the efficient, cost-effective flow and storage of raw materials, in-process inventory, finished goods and related information from point of origin to point of...
Words: 5320 - Pages: 22
...IKEA Case 1) IKEA’s vision to “create a better life for the many people” defined IKEA as a company and separated them from their competitors. In the early years of the company, IKEA faced many hardships from the cartel of furniture manufacturers who controlled the Swedish industry to keep prices high. To counteract these hardships, IKEA created a unique business model that was different from competitors. This model included key features such as the use of a catalog and having self-assembled furniture, which saved the company on transportation and storage costs. Ingvar Kamprad, founder of IKEA, developed the strategy of selling affordable, good-quality furniture to mass-market consumers around the world. Another important part of IKEA’s vision was their relationship with their suppliers. Kamprad wanted to develop close ties by supporting its suppliers with long-term relationships. A manager in the case states, “We commit to doing all we can to keep them competitive—as long as they remain equally committed to us.” IKEA also serviced customers with features such as a playroom for children, a low-priced restaurant, and grocery store. All of these features were highly beneficial and profitable for IKEA while also helping everyone (suppliers, customers, etc.), as their mission strives for. Although IKEA had achieved success with their business model and vision, they experienced multiple environmental and social issues that tarnished to company’s image and reputation...
Words: 1013 - Pages: 5
...1. Introduction of the background of the organization Today’s world affects people to change from time to time. This is because the technology around us is dynamic. The major trend in business development is how to manage the business pressures on organization. A good Information Technology manage will increase the turnover of the sales and help company to capacity the market share. Therefore, the IKEA are taking advantages of new opportunities with a good manage of the information; always keep up with the world changing. IKEA obtain the distinctive capabilities with low price, renewable material and high quality. Besides that, the good customer relationship management of IKEA is enabling IKEA to cover the demand of powerful customer. 1. Background of the IKEA IKEA was establish in 1943 is the world’s largest furniture retailer which specializes in stylish. IKEA organization takes advantages in strictly management function (internal control) and expertise in superior telecommunication networks (external approaches) which create the competitive advantage for IKEA. Therefore IKEA had expanded its business in 26 countries over 128 fully-owned stores. First and foremost, IKEA use a catalog to tempt people to visit an exhibition then develop it by storing the store among whole world. IKEA spread the business globally by advanced telecommunications networks. IKEA’s attributed to its vast experience in the retail industry, in product differentiation and cost...
Words: 2964 - Pages: 12
...challenges that company continuously faced, but these problems may also be overcome only if the company operates in a way that it focus mainly in its main strength and at the same time focusing on the right market, where they would know that they have the advantage. In this paper with IKEA Company as the main focus, it will give us exactly how typical multinational companies manage to operates. It will include such processes like customer requirements, operations management, monitoring projects and other theories and processes applied in actual operation. This paper also provides some important empirical findings that will help to support the theories and actual strategies applied by the company. Historical Background of IKEA Company It was not so long after the company founder INGVAR...
Words: 6125 - Pages: 25
...ghjklzxcvbnmqwertyuiopasdfghjklzxc Submitted To: Mohammed Hannan Miah Prepared By Group 7 073 003 030 073 004 030 072 105 530 073 016 030 072 779 030 Md. Tareq Rahman Shubro Barua Sanjana Mehnaz M Mazharul Arefeen Bhuiyan Sumayia Hassan Background of IKEA IKEA is a privately held, international home products company that designs and sells ready-to-assemble furniture such as beds and desks, appliances and home accessories. The company is the world's largest furniture retailer. Founded in 1943 by 17-year-old Ingvar Kamprad in Sweden, the company is named as an acronym comprising the initials of the founder's name (Ingvar Kamprad), the farm where he grew up (Elmtaryd), and his home parish. IKEA has 300 home furnishing superstores in 35 Countries and was visited by some 583 million shoppers. IKEA’s low priced elegantly designed merchandise displayed in large warehouse stores, generated sales of $21.2 billion in 2008, up from 4.4 billion in 1994. The fledgling company sold fish, charismas magazine, and seeds from his family farm. His first business had been selling matches, the enterprise Kamprad purchased them wholesale in 100 box lots and then resold individually at a higher mark up. Before long, Kamprad had added ballpoint pens to his list and was selling his products via mail order. In 1948, Kamprad added furniture to his product...
Words: 9302 - Pages: 38
