Ikea's Business Strategy
1. Introduction
Ikea, from its humble beginning to a multinational corporation has entered the hearts of many of the world’s citizen thorough its unique design and low cost products. Ingvar Kamprad, the founder of Ikea and the genius behind this phenomenon, continues to build his empire throughout the continents of the world by his vision and bold business strategies. Spanning his wing around the world globally, Ikea is set to make its mark in history.
2. Background Note
Company vision is to create a better everyday life for the many people by integrating sustainability in all business strategies. Today Ikea encapsulates all the key beliefs and vision of its founder, which includes:
a. Democratisation of consumption – Offering good value furniture at an affordable price
b. Enhanced visual sensitivity
c. Non hierarchical world and anti-bureaucratic attitude
d. Empowerment
e. Frugal attitude – Ikea is in the hands of Dutch charitable trust.
Looking at Ikea’s turnover from 1954 to projected turnover in 2010 one could only marvel at their ability to continue to grow at such a steady pace. The Ikea Group opened 16 new stores in 2009 and 15 more as at October 2010 (Ikea, 2010)
Ikea’s success lies in the way it has been able to put together various strategic activities vis-à-vis strategic thinking and strategic planning. Strategic thinking encompasses key tenets like:
1. Taking a holistic view
2. Focusing on the intent and purpose
3. Real time thought process- using the knowledge and experience of past behavior and predict the future trend
4. Hypothesis driven – Scientific method of testing and re-testing a scenario. This is a creative and critical or analytical process
5. Opportunistic
3. Building an Empire
Ikea’s biggest investment plan yet is to expand in China, the world most populous nation. Bloomberg (2010) reported that Ikea plans to dump in US$300 million for their expansion in China. They target to more than double the number of stores in China
Ikea, from its humble beginning to a multinational corporation has entered the hearts of many of the world’s citizen thorough its unique design and low cost products. Ingvar Kamprad, the founder of Ikea and the genius behind this phenomenon, continues to build his empire throughout the continents of the world by his vision and bold business strategies. Spanning his wing around the world globally, Ikea is set to make its mark in history.
2. Background Note
Company vision is to create a better everyday life for the many people by integrating sustainability in all business strategies. Today Ikea encapsulates all the key beliefs and vision of its founder, which includes:
a. Democratisation of consumption – Offering good value furniture at an affordable price
b. Enhanced visual sensitivity
c. Non hierarchical world and anti-bureaucratic attitude
d. Empowerment
e. Frugal attitude – Ikea is in the hands of Dutch charitable trust.
Looking at Ikea’s turnover from 1954 to projected turnover in 2010 one could only marvel at their ability to continue to grow at such a steady pace. The Ikea Group opened 16 new stores in 2009 and 15 more as at October 2010 (Ikea, 2010)
Ikea’s success lies in the way it has been able to put together various strategic activities vis-à-vis strategic thinking and strategic planning. Strategic thinking encompasses key tenets like:
1. Taking a holistic view
2. Focusing on the intent and purpose
3. Real time thought process- using the knowledge and experience of past behavior and predict the future trend
4. Hypothesis driven – Scientific method of testing and re-testing a scenario. This is a creative and critical or analytical process
5. Opportunistic
3. Building an Empire
Ikea’s biggest investment plan yet is to expand in China, the world most populous nation. Bloomberg (2010) reported that Ikea plans to dump in US$300 million for their expansion in China. They target to more than double the number of stores in China
References: 1. Lane, G. (2007) A study of how different companies have failed, and tips on how to succeed, in the Japanese market (Online). Available at http//www.japanic.com/mgz_sep-oct_2007_issue_failed-businesses (Accessed on 20th Oct, 2010) 2. Bloomberg 2010 (Online). Available at http://www.bloomberg.com/news/2010-10-19/ikea-plans-to-add-300-million-to-mall-developer-s-investment-in-china.html (Accessed on 20th Oct, 2010) 3. Ankli, R.E. (1992), Michael Porter 's Competitive Advantage and Business History. pp. 0228-0236. Available at http://www.h-net.org/~business/bhcweb/publications/BEHprint/v021/p0228-p0236.pdf (Accessed on 25th Oct, 2010) 4. Ikea 2010 (Online). Available at http://franchisor.ikea.com/showContent.asp?swfId=facts1(Assessed on 20th Oct,2010)