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Ikea: a Swedish company. history , development, and growth of ikea over time .
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Ikea: a Swedish company history, development, and growth of ikea over time “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, 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.
Ikea’s issues Being a Top Retailer and Invading America is no piece of cake! • Internal Strengths • Internal Weaknesses • External Opportunities • External Threats
Issue: Adapting to a foreign Market Problem Solution Change some of the product offerings and influence some of the American tastes and preferences: Adapt cabinets to accommodate American appliances Change bed dimensions to the ones commonly used in the United States Advertise that furniture is like fashion, you can change on a whim and lifetime commitment is not necessary Create dishes and glassware that is more representative of American portions. • America is very different culturally from most European markets: • Different sizes of appliances • Different sizes of beds • Different ideas of comfort • Food portions are very different • So much so that when IKEA first opened in the USA, Americans wanted larger glassware so they were drinking out of flower vases • Most of America is more traditional in their furniture than the modern simplicity that is IKEA’s specialty • Measured in Metric system instead of the standard system of inches and feet used in the USA
Ikea’s internal strengths and weaknesses Cost saving ideals and incomplete product development
Ikea’s external environment External Opportunities and threats
Ikea’s external opportunities and threats opportunities threats The threat that currently faces not only IKEA, but other companies world wide is the economic recession, which is especially forefront in American issues currently. • A great opportunity would be to expand the online market; allowing more of the products that are visible online to be purchased online
SWOT ANALYSIS Over-all commentary
SWOT Commentary • Overall IKEA is in a good position, with strong strengths and low weaknesses. • There are still opportunities for expansion, and the greatest threat to IKEA’s business is one that threatens most businesses internationally today.
Perspectives Sweden and America
The IKEA logo is Blue and Yellow, the colors of the Swedish Flag Swedish perspectives Focus on Origins • Many people associate Sweden with a fresh, healthy way of life. • This is reflected in the colors and materials used and the sense of space they create. Sweden is a society founded on social equality; similar to IKEA’s furniture: • modern but not trendy, functional yet attractive, people-focused and child- friendly • That carries on these Swedish home furnishing traditions.
American perspectives We’re America; Home of “Have it your way” • We are American; • We don’t want your way, we want our way. • Go Big or Go Home…
