Ikea: Scandinavian Style
BUS 565 Organizational Theory
Case Analyses
Dr. Nanette Metz
Congbo Zeng(Leo)
IKEA: Scandinavian Style
IKEA is a Dutch company, which has branches in several countries around the world, selling flat-box storage of furnitures, accessories, bathroom and kitchen products and other goods. “As of January 2008, the company is the world 's largest furniture retailer. ”[i] IKEA is the pioneer in designing and selling ready-to-assemble furniture, and it is founded in 1943 by Ingvar Kamprad at the age of 17. “In addition, the firm is known for its attention to cost control, operational details, and continuous product development, corporate attributes that allowed IKEA to lower its prices by an average of two to three percent over the decade to 2010 during a period of global expansion.”[ii] In some customers’ mind, IKEA is not only suppose to be the fashion and creative designer, but also an attitude to lifestyle. The main issue for IKEA is that they fail to gather sufficient information before they decide to go into different cultural areas. In this case, IKEA have become the world known brand, due to its efforts in strengthening and tying consumer family. However, IKEA have to face lots of challenges. One aspect is the loosening of the company’s core, due to IKEA’s global expansion. “They detected a loosening of the company’s strict core values, established more than half a century ago and reinforced in the training of co-workers in the IKEA Way.”[iii] At the beginning years, IKEA needs strict core values to create brand and corporate culture. With the process of global expansion, Kamprad’s idea “little bit of Sweden” may somehow limits strong growth in some particular location of non-Swedes, due to the cultural nuance. IKEA’s strategy is focusing on standardization rather than adapting to cultural differences in many cases. These cultural nuance had led to set blockers for IKEA’s global expansion in America and Asia. For instance, “In the U.S. market,
Case Analyses
Dr. Nanette Metz
Congbo Zeng(Leo)
IKEA: Scandinavian Style
IKEA is a Dutch company, which has branches in several countries around the world, selling flat-box storage of furnitures, accessories, bathroom and kitchen products and other goods. “As of January 2008, the company is the world 's largest furniture retailer. ”[i] IKEA is the pioneer in designing and selling ready-to-assemble furniture, and it is founded in 1943 by Ingvar Kamprad at the age of 17. “In addition, the firm is known for its attention to cost control, operational details, and continuous product development, corporate attributes that allowed IKEA to lower its prices by an average of two to three percent over the decade to 2010 during a period of global expansion.”[ii] In some customers’ mind, IKEA is not only suppose to be the fashion and creative designer, but also an attitude to lifestyle. The main issue for IKEA is that they fail to gather sufficient information before they decide to go into different cultural areas. In this case, IKEA have become the world known brand, due to its efforts in strengthening and tying consumer family. However, IKEA have to face lots of challenges. One aspect is the loosening of the company’s core, due to IKEA’s global expansion. “They detected a loosening of the company’s strict core values, established more than half a century ago and reinforced in the training of co-workers in the IKEA Way.”[iii] At the beginning years, IKEA needs strict core values to create brand and corporate culture. With the process of global expansion, Kamprad’s idea “little bit of Sweden” may somehow limits strong growth in some particular location of non-Swedes, due to the cultural nuance. IKEA’s strategy is focusing on standardization rather than adapting to cultural differences in many cases. These cultural nuance had led to set blockers for IKEA’s global expansion in America and Asia. For instance, “In the U.S. market,
References: ----------------------- [i] Zuvela, Maja. "IKEA mulls joint venture with Bosnia furniture maker." REUTERS. http://www.reuters.com/article/2008/01/08/idUSL0861625720080108. [ii] Global Players: Ingvar Kamprad, Founder and Chief Advisor, IKEA". Thomaswhite.com. [iii] Daft, Richard L. Organization Theory & Design. 11th ed. Mason: South-Western,Cengage Learning, 2013. Page 580 [iv] Daft, Richard L. Organization Theory & Design. 11th ed. Mason: South-Western,Cengage Learning, 2013. Page 581