Ingvar Kamprad, a young Swede, finished his studies in 1943. He quickly established a small company which he called IKEA. The acronym IKEA (Ingvar Kamprad Elmtaryd Agunnaryd) is composed of the initials of his name, the name of his parents' farm and the name of his village. Initially, he focused only towards the sale of commercial items like pens, picture frames, tablecloth,jewelry, leather goods and nylon stockings. In 1947, the IKEA range of products included furniture for the first time.
It was not until 1951 that the company decided to focus exclusively on furniture. During IKEA's first exhibition of furniture in 1953, the customers could see and touch the furniture before ordering. This made them realize a few great things about the IKEA furniture. They realized that IKEA offered functional, aesthetic and cheap furniture. IKEA began manufacturing its own furniture from 1955 and it was during this period that the 'flat pack' was invented. This allowed the customer to transport goods to his destination after exiting the store. In 1958, IKEA opened its first store spanning 6700m2 in Sweden Almhult. Then, IKEA opened two other stores in Norway and Stockholm in 1963 and 1965 respectively. The expansion of the brand was happening at a fast pace with many stores being established in many countries in a short span of time.
Ingvar Kamprad was keen to create a group whose structure and organization ensured independence and long-term security. The IKEA group is owned by a foundation, INGKA, based in the Netherlands. The foundation owns INGKA Holding BV, which is none other than the parent company of the industrial group Swedwood.
Inter IKEA Systems BV is the owner of the concept and brand IKEA. It has franchise agreements with all IKEA stores worldwide. IKEA is a family company that has always excluded the use of the stock system. The holding company preferred to raise most of its money from the countries to reinvest profits.
The furniture industry has changed significantly over recent years due to globalization and has resulted in the influx of low-cost products, changes in consumer behavior, changes in distribution strategies and development in e-commerce. To meet new consumer expectations, the furniture industry has adapted to its new environment. The products and styles such as furniture complements, in kit and fully equipped kitchens have multiplied.
Globally, trade in furniture has almost doubled since 1994 to as high as $62 million in 2001. They are now higher than in the clothing, footwear, publishing, cosmetics or perfume. Today the furniture industry has nearly 137,000 businesses worldwide with a turnover of almost 110 million euros. In 2003 it hired 1.3 million people.
In the European market, Ikea is the undisputed leader of the cabinet except in France where Conforama is still fighting to keep its first place. But Ikea would dislodge a few years just as it would be a greater place in the U.S. and the Asian market. Nationally, the furniture industry remains fragmented among many companies scattered across the country.
Tags:Ingvar Kamprad, IKEA furniture, INGKA, low-cost products.
[...] The expansion of the brand took place at a rapid pace, since many stores were located within a short time in a large number of countries. The business organization Ingvar Kamprad wanted to create a group with a structure and organization which ensured independence and long term security. The IKEA Group is owned by a foundation called Stichting INGKA, based in the Netherlands. The foundation holds INGKA Holding BV which is none other than the parent company of the industrial group Swedwood. [...]
[...] Then, the firm wants to expand the target, trying to reach new customers and also styles to position itself as a leader in the bedrooms and bedding, and finally, the strategy aims to reduce prices in order to boost the market. Thus, IKEA France wants to consolidate its second place in the French furniture market with the ambition to become a leader in the medium term and will continue to lower prices. At the local level: To become a leader on the local market, the IKEA group accepts its marketing strategy in four main areas. Firstly, it aims to strengthen the local marketing, granting autonomy to marketing managers in the implementation of store operations as well as customer relations. [...]
[...] market and the Asian market. At the national level, the furniture industry is fragmented between many companies scattered across the territory. The outlets are dominated by multiple stores containing home equipment (Conforama, But) even though the stores such as IKEA see the young population gaining ground year after year: θ With 26% of sales in 2006, home furnishings stores are losing ground despite 30 years of success. This indicates that buyers are now looking for a renewal rather than the basic equipment. [...]
[...] IKEA believes in values such as sense of belonging, respect, simplicity and commitment, and cost consciousness. Humility and efficiency are two other pillars of corporate culture. c. Production and distribution function Production IKEA products are manufactured all across the world. Indeed, the group works with more than 1,300 suppliers in 53 countries. Its offices are near suppliers. Thus, four central purchasing units are supported by 46 offices in 32 countries. Some suppliers are located in Sweden, while others have factories in China, Poland and Germany. China is number one on the list of IKEA. [...]
[...] The policy of the firm is to find the aesthetics and functionality. For this reason, it works with suppliers that produce functional and aesthetic items in the lowest possible price, and they must meet the requirements of the code of conduct of IKEA (IWAY). IKEA's product policy centers on proximity to suppliers and the fact that the products manufactured are the same everywhere in the world. The objective here is to bring quality, environmental protection, working conditions, aesthetics and functionality. [...]
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