IKEA: A

SWEDISH

COMPANY

HI S T O

R Y , DE V E L O

P ME N

T , A ND

GR O

WT H

OF I K E A O

V E R T I ME

“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.”

Angelo Gonzalez

Brittany Murray Pebbles Gilbert

Jasmine Scott

Jennifer

Katzman

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

IKEA’S BIG PROBLEM

Being a

Top Reta

iler a

nd Inva

ding America

is no

piece o

f cak

e!

Trouble adapting to the American style & lack of innovation!

ISSUE: ADAPTING TO AMERICAN LIFESTYLE

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

Challenges

PERSPECTIVES

A M E R I CA N ’ S

AN D O

W N E R S

AMERICAN PE

RSPECTIVES

-The products are not reliable

-Unique Style-Job

opportunities

OWNERS PER

SPECTIV

ES

-Privately owned -1982 IKEA Group is

owned by a foundation

-ownership structure -organization independence -long-term approach

-Franchising -Opportunity for

higher profits

KNOWLEDGE

S W O T AN A LY S I S

S W O T MA T R I X

Facts and Figures > Yearly Summary > Welcome Inside 2011http://www.ikea.com/ms/en_US/pdf/yearly_summary/Welcome_inside_2011.pdf

2011 Version of Exhibits 2,3,5, & 6

THE COMPANIES OVERLOOKTotal of 37 IKEA stores located in America

SWOT ANALYSISStrengths -Internal strength is employees cost efficient -Price of Product -Material -Manufactures capabilities -Good design and function

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

Opportunities -Expand the online market -allowing more of the products that are visible -Communicate with customers

Threats -Economic recession -People not buying -Hand downs from previous owners

SWOT MATRIX 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

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

-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

-They can save more money by making the 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

-IKEA has affordable products for customers that will help customers come to their business in a recession-Advertise the affordability of the products

-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

POSSIBLE

ACTIONS

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

• 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

Positive 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_vKs8AGermany Warehouse http://www.ikea.com/ms/en_US/pdf/yearly_summary/Welcome_inside_2011.pdfWelcome Inside 2011 Cataloghttp://

www.ikea.com/ms/en_US/about_ikea/the_ikea_way/history/index.html

History of IKEA