Ingvar Kamprad and IKEA

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nTable of contents

IntroductionPage 1

Assignments

1. Sources of successPage 2

2. InternationalisationPage 4

3. management process's Page 6

4. Ingvar Kamprad's rolePage 7

5. Challenges aheadPage 8

6. course of action MobergPage 9

Additional information

IKEA nowadaysPage 10

ConclusionPage 11

Appendices

Appendix 1 all IKEA store'sPage 12

Introduction

In these assignments we are examining one of the largest multinationals in the world; IKEA.

Certain aspects concerning IKEA will be discussed and amplified such as what enabled a Swedish retailer who solely used his line of ideas to expand world wide and become such a success. What were the contributions of Ingvar Kamprad to the mayor achievements of the organisation? What challenges lay ahead for IKEA and how should their strategies be adjusted to their current goals.

IKEA nowadays is company which is represented all over the world and has approximately 186 stores in 33 countries and are still seeking new opportunities to conquer new markets.

The 6 specific questions that shall be answered and shall be clarified are:

1.What are the sources of Ikea's success full entry in the furniture retailing business in Sweden?

2.How important was internationalisation to IKEA? What challenges did IKEA face while expanding internationally, and how did it overcome them?

3.What where the management processes by which IKEA coordinated and controlled its Europe-wide operations?

4.What was Ingvar Kamprad's role in Ikea's development?

5.What challenges lie ahead for IKEA?

6.What course of action should Moberg follow in order to deal with them?

1. Sources of success

IKEA is the most successful furniture company conducting business worldwide, what are the main factors for Ikea to become such a success full organisation.

Differentiation

The main issue that makes IKEA so successful is that they took the ability to differentiate from the current competitors on the market. Ingvar Kamprad had a completely different strategy and vision in mind than the other companies on the furniture market at that time.

A different Price, a different target group, a different store, a different location, a different distribution channel and a self service concept, all focused on the consumers. To make products of good quality that are affordable for the average consumer. He cared more about improving quality of life and that was what Ikea reflected to the customers

Price

When the company entered the furniture market in Sweden in the beginning of the 50's the furniture prices where rising enormously and only a small part of the population was able to buy the qualitative furniture products. IKEA's strategy was to change this situation, to offer a wide range of home furnishing items of good design and function at low prices so that the majority of people can afford to buy them. They had a completely different approach by selling at the lowest possible price and in despite of that still providing good quality products.

The other companies on the furniture market saw a great danger in IKEA and pressured the company, when the retail cartel members pressured the manufacturer's cartel not to sell to IKEA it eventually resulted in even lower cost prices. Ikea was excluded from buying furniture from domestically producers and therefore had to seek for other options and ended up with a producer in Poland, which was significant cheaper than the Swedish furniture manufacturers.

Target groups

IKEA also aimed on a different target group, instead of appealing to older, more thriving consumers. IKEA focused on younger buyers who were often seeking for furniture to furnish their first apartments. There is much more future in this target group because when they once bought from IKEA and they are satisfied the company can keep them for their whole life time. And the low prices and the variety of choices appeals to them. They also don't...
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