“At IKEA our vision is to create a better everyday life for the many
people. Our business idea supports this vision by offering 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.”
HISTORY: IN THE BEGINNING…
At the age of five Ingvar Kamprad starts selling matches to his nearby
.
neighbors and by the time he is seven, he starts selling further afield, A
using his bicycle. He finds that he can buy matches in bulk cheaply in
Stockholm and re-sell them individually at a very low price but still make a
good profit. From matches he expands to selling flower seeds, greeting cards,
Christmas tree decorations, and later pencils and ball-point pens.
• Ikea is officially started in 1943 when Kamprad is seventeen years old with a
graduation gift from his father.
Originally a discount retailer of basic household goods.
1947 is when Ikea begins to sell home furnishings.
DEVELOPMENT AND GROWTH
• 1940s-1950s
• The roots of a furniture dealer.
• 1960s-1970s
• The IKEA concept starts to take shape.
• 1980s
• IKEA expands dramatically into new markets such as USA, Italy, France
and the UK.
• 1990s
• IKEA grows even more.
• 2000s
• IKEA expands into even more markets such as Japan and Russia.
To get more HISTORY about IKEA visit
http://www.ikea.com/ms/en_US/about_ikea/the_ikea_way/history/index.html
ISSUE: ADAPTING TO AMERICAN LIFESTYLE
Challenges
Durability
•
“Low price with meaning”/Poor quality
•
Scandinavian style design/longevity
America is very different culturally from most European markets:
•
Different sizes of appliances
•
Different sizes of beds
•
Different ideas of comfort
•
Measured in Metric system instead of the standard system of inches and feet used in the
USA
-The products are
not reliable
-Unique Style
-Job opportunities
-Privately owned
-1982 IKEA Group is owned
by a foundation
-ownership structure
-organization independence
-long-term approach
-Franchising
-Opportunity for higher
profits
Facts and Figures > Yearly Summary > Welcome Inside 2011
http://www.ikea.com/ms/en_US/pdf/yearly_summary/Welcome_inside_2011.pdf
2011 Version of Exhibits 2,3,5, & 6
THE COMPANIES OVERLOOK
Total of 37 IKEA stores located in America
SWOT ANALYSIS
Strengths
-Internal strength is employees cost efficient
-Price of Product
-Material
-Manufactures capabilities
-Good design and function
Opportunities
-Expand the online market
-allowing more of the products that are visible
-Communicate with customers
Weaknesses
-Americans did not like European Style
-the cabinets didn’t fit in the kitchen
-the sheets wouldn’t fit the beds
-the sofas were too hard
-kitchen supplies were too small for American
preference.
-Transportation of products
Threats
-Economic recession
-People not buying
-Hand downs from previous owners
SWOT MATRIX
Strengths
-Internal strength is employees cost effient
-Price of Product
-Material
-Manufactures capabilities
-Good design and function
Opportunities
-Expand the online
market
-Communicate with
customers
-They can save more money by making the
Threats
-Economic recession
-People not buying
-Hand downs from
previous owners
-IKEA has affordable products for customers that
will help customers come to their business in a
recession
-Advertise the affordability of the products
online market. Can order straight from
logistics and do away with creating the store
and having employees and rental fees.
-Robotic manufacturing to expand the online
market
Weaknesses
-Americans did not like European Style
-the cabinets didn’t fit in the kitchen
-the sheets wouldn’t fit the beds
-the sofas were too hard
-kitchen supplies were too small for American
preference.
-Transportation of products
-IKEA can continue to rely on market research and
product lineup to help meet Americans needs
-Make products in flat boxes and not already pre-set up
-Also can add a small fee for set-up, which can create a
job for the economy
-IKEA needs to be able to concentrate on the American
peoples styles
-To be global you need to act local
-Give the Americans what they want
Change some of the product offerings and influence
some of the American tastes and choice of style:
•
Adapt cabinets to accommodate American
appliances
•
Change bed sizes to the ones commonly used in
the United States
•
Advertise that furniture is like fashion, you can
change on a trend and lifetime commitment is not
necessary
•
Hire mix of backgrounds & personalities
• Promote diversity & infuse new ideas
CONSEQUENCES
Positive
•
•
Adapting to the American style led to
• Further expansion within the U.S
•
Possible joint ventures
•
Beat out competition
• Ex. Wal-Mart, Ashley’s & Rooms to Go
Hiring a diverse work staff
• Fresh innovative ideas
•
Met changes in new markets
Negative
• Hiring a diverse work staff
• Lack of goal congruence
• Distraction from the common
goals
• Waste of resources
• getting a diverse group to
agree to a common
viewpoint
REFERENCES
http://www.youtube.com/watch?v=KKA98_vKs8A
Germany Warehouse
http://www.ikea.com/ms/en_US/pdf/yearly_summary/Welcome_inside_2011.pdf
Welcome Inside 2011 Catalog
http://www.ikea.com/ms/en_US/about_ikea/the_ikea_way/history/index.html
History of IKEA