Ikea: a Swedish company

1. Ikea: a Swedish company history, development, and growth of ikea over time Angelo GonzalezBrittany Murray Pebbles Gilbert Jasmine Scott Jennifer Katzman “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.”

2. 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.

3. 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

4. Ikea’s Big Problem Being a Top Retailer and Invading America is no piece of cake! • Trouble adapting to the American style & lack of innovation!

5. Challenges 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

6. Perspectives American’s and owners

7. American perspectives • -The products are not reliable • -Unique Style • -Job opportunities

8. OWNERS perspectives • -Privately owned • -1982 IKEA Group is owned by a foundation • -ownership structure • -organization independence • -long-term approach • -Franchising • -Opportunity for higher profits

9. knowledge SWOT Analysis Swot matrix

10. 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

12. The Companies overlook • Total of 37 IKEA stores located in America

13. SWOT Analysis Strengths -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

14. SWOT Matrix Strengths -Internal strength is employees cost effient -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 -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 Opportunities -Expand the online market -Communicate with customers -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 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 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

15. 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

16. Consequences Negative 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 • 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

17. 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