1.4The human resource idea2
2.1IKEA’s presence in the global market3
2.2IKEA going global4
2.3Managing foreign establishments5
2.4IKEA in China6
3Analysis & Discussion10
5.3 Company material14
IKEA was founded in Sweden in 1962 by Ingvar Kamprad at the low age of 17. The letters in IKEA is an acronym of Ingvar Kamprad, Elmtaryd (the old spelling of the farm where he grew up) and Agunnaryd (the village’s name). Starting with selling pens, matches and other products, Ingvar eventually started selling and later manufacturing furniture. The concept has basically always been the same – large volumes at low purchase price. Products with high demand sold at low prices. Not only do IKEA handle large volumes of goods. With businesses in 26 nations worldwide IKEA is represented in four continents, employing as much as 123 000 people (Ikea.com, a). This makes human resource management a fundamental part of daily processes. Domestic human resource management is a task itself. The international undertaking of HR management is another. 1.2Vision
To create a better everyday life for the many people (Ikea.com, b). 1.3Business idea
We shall offer 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 (Ikea.com, b). 1.4The human resource idea
To give down-to-earth, straight-forward people the possibility to grow, both as individuals and in their professional roles, so that together we are strongly committed to creating a better everyday life for ourselves and our customers (Ikea.com, b). 1.5Limitations
IKEA’s presence in a vast amount of countries requires that this report is limited to consider only one of the host countries when analyzing the human resource practices. The chosen host country is China as it has obvious cultural differences from Sweden and is a market with great future opportunities of expansion for IKEA.
2.1IKEA’s presence in the global market
IKEA is present in countries with great differences when considering economical, demographical, geographical and other factors. The table below presents a selection of countries which host an IKEA warehouse with year of first warehouse opening stated in parenthesis. (http://www.ikea.com/) USA (1988)| Canada (1976)| Iceland (1981)| Norway (1963)| Germany (1974)| Saudi Arabia (1983)| Kuwait (2001)| Israel (2001)| UAE (2001)| Japan (2006)| Turkey (2005)| Australia (1981)|
In 2010 IKEA opened shop in Romania and are having plans to enter Serbia and Croatia. IKEA states that in the future, India is a market that IKEA is willing to enter due to its huge opportunities. As seen on the world map below in figure 1, despite IKEA’s worldwide establishment, most of the outlets are placed in Europe. Today the largest warehouse is the second one to be established, located in Kungens Kurva in Stockolm (The King’s Curve: the ex-ex-king Gustav V’s car skidded of the road into a ditch in 1946). (http://www.ikea.com/)
Figure 1. IKEA's presence in the world as of 17th of november 2011. Source: http://www.ikea.com/ms/sv_SE/about_ikea/facts_and_figures/store_openings.html, 2011-11-17.
2.2IKEA going global
Like most organizations IKEA is striving for growth in terms of sales and outlets. In 2010 the total revenue grew 1.4 % to 21.8 billion EURO (IKEA, Welcome inside, 2010). The Swedish market for example is saturated and offers no or diminutive possibilities to continual growth. Therefore the company was forced to use the global market for its future expansion. Furthermore,...