Culture of Ikea

Topics: Marketing, Ingvar Kamprad, Strategic management Pages: 7 (2134 words) Published: October 8, 2008
Ikea Svenska AB, founded in 1943 is the world's largest furniture retailer which specializes in stylish but inexpensive Scandinavian designed furniture. It has 128 fully-owned stores in 26 countries, visited by over 108 million people yearly and worldwide sales of about $5.4 billion in 1994. IKEA's success in the retail industry can be attributed to its vast experience in the retail market, product differentiation, and cost leadership. The company is, perhaps, one of the World's most successful multinational retailing firms operating as a global organization based on its unique concept that the furniture is sold in kits that are assembled by the customer at home. MISSION

IKEA's mission is to offer a wide range of home furnishing items of good design and function, excellent quality and durability, at prices so low that the majority of people can afford to buy them. The company targets the customer who is looking for value and is willing to do a little bit of work serving them, transporting the items home and assembling the furniture for a better price. The typical IKEA customer is young low to middle income family.

The soul of IKEA is symbolized by a row of stones from the cold stony grounds of Smaland, Sweden. Smaland is one of the poorest regions in Sweden-- its ground is stony and unconducive to agricultural development. Yet, the people of Smaland have thrived and become renowned for their thrift, inventiveness and hard work. This characterizes the spirit of Ingvar Kamprad, founder of IKEA. Ingvar Kamprad was born in 1926 on a farm called Elmtaryd in the village of Agunnaryd (hence the acronymous name for IKEA). Ingvar sold matchsticks and pens as a boy. At the young age of 17, Ingvar registered the IKEA name in 1943. In the 50s, IKEA started to sell furniture at factory prices by mail order. This was met with firm resistance and boycotts from the established furniture trade, and IKEA was even banned from the huge national furniture trade show in Stockholm. The other established furniture retailers threatened to withdraw their business from suppliers who also supplied IKEA. Undeterred, IKEA sourced for alternative suppliers outside Sweden, and IKEA's designer furniture at factory prices continued to pull in the customers. The Smaland spirit of thriving under hardship, and turning problems into opportunities kept IKEA alive and set the foundation of IKEA's development. Today, IKEA has found its own niche: beautiful and durable furniture at prices so low that the majority of people can afford them. Not just in Sweden, but in Germany, Poland, UK, US, Singapore, Australia, China, Israel, Russia, Malaysia, and the rest of the world. The IKEA BUSINESS 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." Here in IKEA Malaysia, we have systematically reduced our prices every year so that we will always be on the side of the customer. This has been made possible mainly because we use the full strength of the IKEA concept and the IKEA organization to purchase in large numbers, using the best supply chain methods to keep prices low. In the store, we request that you, the customer, do your part to shop on your own, and together, we save.

IKEA has applied a conservative policy to internationalization. As a general rule, the firm never enters a new potential market by opening a retail outlet. Instead, a supplier link with the host nation is established. This is a strategic risk reducing approach in which local suppliers can provide valuable input on political and legal, cultural, financial and other issues which provides for opportunities and/or threats to the IKEA Concept. IKEA has concentrated its international expansion in Europe and in North America mainly through company-owned subsidiaries....
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