In 1943, Ingvar Kamprad, a young Swede, finished his studies. He soon created 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 parent's farm and the name of his village. In the beginning, the founder only devoted himself to the sale of utility objects: pens, frames, tablecloths, jewelry, leather goods and nylon stockings. In 1947, furniture made its appearance in the IKEA selection. And it was from 1951 that the IKEA Company started selling only furniture. At the first permanent exhibition of furniture in 1953, customers, who could see and touch the furniture before placing an order, quickly realized that IKEA offered functional, aesthetic and cheap furniture. IKEA started manufacturing its own furniture in 1955. It was during this period that they invented the "flat package" in order to facilitate the customer's transport of goods from the store. In 1958, IKEA inaugurated its first department store in Sweden at Älmhult, which was spread over 6700 square meters. Then in 1963 and 1965, IKEA opened two other big stores in Norway and in Stockholm. The expansion of the brand was carried out at a frantic pace, since many stores were established in a short period of time, in a large number of countries.
[...] The IKEA group belongs to a foundation, Stichting INGKA, based in the Netherlands. The foundation holds INGKA Holding B.V which is none other than the parent company of the industrial group Swedwood. Inter Ikea systems B.V is the owner of the IKEA concept and brand. It has franchise agreements with all the IKEA stores in the world. IKEA is a family company which has always avoided using the stock exchange system. The holding prefers to raise maximum amount of money from countries where it makes profits, in order to reinvest it in countries where it wishes to establish itself. [...]
[...] In terms of external communication, Ikea adopts a mass market strategy in order to attract and appeal to the largest number of customers. Thus, catalogs and other brochures account for 50% of the budget dedicated to the policy of communication. Its Internet site receives approximately 500,000 visitors per month. The firm also uses the press, radio, TV and posters. On the other hand, Ikea uses external relations in order to inform the media. This strategy aims to inform the journalists not only of new products and new collections but also on the financial position of the company (annual report, turnover One can also note that the firm supports various projects like UNICEF for example. [...]
[...] Key questions such as: “what are my main strengths and weaknesses compared to the existing competition?” or “what are the principal threats to the market?” Through this analysis, the company must make good decisions in order to avoid harmful repercussions. Thanks to this diagnosis, we note that the IKEA group is especially interested in the stages of life of people and bases its strategy on that. IKEA is the group which knows how to grow despite a declining market. Still, there is a hitch: the group is not a leader in this market. We have 13 real strengths and 7 opportunities. [...]
[...] to improve the daily lives of themselves and their customers.” Company Culture During the past 60 years, Ikea has grown from an individual business to a group of companies employing 84,000 people. At the same time, it has developed a unique company culture, based on very strong values. Ikea's success lies in its enthusiasm, self-challenging nature, developed sense of economy, self-help, taking responsibility and simplicity in its way of thinking. Simplicity is one of the key values at Ikea, as much in its method of working, as well as in its relations with its employees. [...]
[...] Good design Adaptation to the stages of life No.2 in the market Control of costs (significant turnover) Policy of a standardized brand Developments: Restaurants with kid's meals An over-developed company culture Playgrounds with activities, at the entrance Restricted communication tools Stores in the shape of a labyrinth Implantation strategy Marketing: Numerous means set up to attract the customer Designers Teams of specialists who detect needs Routes in the stores which encourage purchases Opportunities: Threats: Furniture Market still developing competitors develop the same strategy Strong international demand Diversification of activities Diversity of suppliers Competitive Pressure Weak direct competition Different offers from competing Attracts the elderly also stores Multi-functionality of furniture Declining market Brand image of the group The division into two distinct environments allows for better visibility and especially a simultaneous confrontation between strengths and weaknesses and between opportunities and the threats. [...]
APA Style reference
For your bibliographyOnline reading
with our online readerContent validated
by our reading committee
