business report ikea v2
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Business reportTRANSCRIPT
Business Report
IKEA
Prepared By,
Bhavya Basavaraj
Divya Hombalammanapet Nagaraja
Vijayalaxmi Venkatesan
Prepared for,
Jeff Newcomb
Instructor
Business Communication
Department of Marketing & Entrepreneurship
California State University, East Bay
Marketing 3495, Section 3
03/13/2013
IKEA
Organization’s Background
Start-up of the organization:
IKEA is a Swedish pronunciation, famous for home products company that designs and sells
ready to assemble furnitures, appliances and home accessories.Today, IKEA is one of the world's
largest furniture retailer, owning about 301 stores in 37 countries. IKEA is founded at Sweden in
1943 by 17-year-old Ingvar Kamprad. The company's name is an acronym comprising the
initials of Ingvar Kamprad (the founder's name), Elmtaryd (the farm where he grew up) and
Agunnaryd (his hometown in Småland, South Sweden). Today, the company is known for its
modern architectural designs on various types of appliances and furniture, often associated with a
simplified eco-friendly interior design.
Vision and Concept of IKEA:
The IKEA vision is to “create a better everyday life for the majority of people”.
The IKEA business idea is to offer a wide range of well-designed, functional home furnishing
products at low prices that as many people as possible will be able to afford them.
The IKEA market positioning statement is “your partner in better living. We do our part; you do
yours. Together we save money”.
The IKEA Concept guides the way IKEA products are designed, manufactured, transported, sold
and assembled. All of these factors contribute to transforming the IKEA Concept into the reality.
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Organization’s evolution from its founding to where it is now:
The IKEA story begins in 1926, when founder Ingvar Kamprad is born in Småland in southern
Sweden. He is raised by Elmtaryd, a farm near the small village of Agunnaryd. Even as a young
boy Ingvar knows he wants to develop a business.
In 1920s:
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 a field, 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.
1940s-1950s:
Ingvar Kamprad is entrepreneurial in developing IKEA into a furniture retailer. This period sees
the exploration of furniture design, self-assembly, advertising, the use of a catalog and a
showroom to reach many people.
1960s-1970s:
In this period, the IKEA concept starts to take shape. New IKEA stores open and hero products
are developed such as POÄNG and BILLY bookcase. It is a time where concept takes shape and
is documented in Ingvar Kamprad's.
1980s:
IKEA expands dramatically into new markets such as USA, Italy, France and the UK. More
IKEA classics arrive such as KLIPPAN, LACK and MOMENT. IKEA begins to take the form
of today's modern IKEA.
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In 2000s:
IKEA expands into even more markets such as Japan and Russia. Everything for the bedroom
and kitchen is explored and presented in coordinated furnishing solutions. This period also sees
the successes of several partnerships regarding social and environmental projects.
Current:
As of October 2011, IKEA has 332 stores in 38 countries. In the year 2010, it sold about $23.1
billion worth of goods. IKEA contains about 12,000 products. There were over 470 million
visitors to the IKEA websites in the year from September 2007 to September 2008.
Industry Information
Current industry environment:
Home Durables – Industry
IKEA is in the Household Durables industry. Household Durables includes the type of products
that are manufactured for last for a long life. These are products that people use in their everyday
life and the products are build endure regular usage. Every household has to have at least a few
of these products, if not more. Furniture would be the most common object found at home and
this falls into the Household Durables industry. IKEA is the biggest player in the furniture
industry. “It is the world’s largest furniture retailer with more than 301 stores and 30 franchised
units.”1 – according to Forbes. Other products that fall into the same category are appliances and
textiles. IKEA has a presence in all of these categories.
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Industry Profile:
The home durables industry is mostly dominated by big players, the primary reason being the
barrier of entry. This industry requires huge capital investment. IHS Global Insight Inc., an
economic research firm, and the Home Improvement Research Institute (HIRI), an industry trade
group; estimate that home improvement was a $263.4 billion industry in 2011. HIRI forecasted
that 2012 would see sales of $283 billion in home improvement products. IKEA is right in the
middle of this game, it’s a big opportunity for IKEA.
Industry Trends:
The Home Durables industry has seen a modest growth in 2012. Below is a table showing
prominent players in the industry with their 2011 fiscal year revenues.
Refer Appendix 1: Figure 1: Year-to-Year Percent change of sales
The slump in the housing industry in 2008 led to a 48% sales slump in the home improvement
retail industry. This has a direct impact on the home durables industry. Less people building and
renovating homes meant less people buying home improvement products. The industry has
shown better results in 2011 and 2012 due to consumer confidence and higher prices. Home
Depot, a top competitor to IKEA, saw a 29% increase in income in 2010 and 16% in 2011.
Furniture Today reported that total retail sales of furniture and bedding grew from $80.1 billion
in 2011 to $84.2 billion in 2012, a 5% increase year-over-year.
“According to the National Retail Federation, a retail trade association, the four-day
Thanksgiving holiday weekend in 2012 recorded 12.8% growth in retail sales over the prior-year
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period, and one-fifth of Black Friday shoppers bought home furnishings or home décor
products.”
The housing market seen a recovery in during the last quarter of 2012 and is expected to grow in
2013 based on articles published by Furniture Today in December 2012. The number of new
house constructions and home prices has been increasing. Improvements in job market and
consumer confidence will only push demand for home improvement products. IKEA should
expect to compete with retailers who are planning to expand operations and have a well planned
inventory to meet the increasing demand. The table below shows the $ sales performance and
forecast from 2012 to 2016.
Figure 2: Products Market Forecast
The US economy is a key indicator of the sales trend in the household durables industry. The
table below reflects IKEA’s performance over the past decade and shows a strong co-relation to
the US economy.
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Figure 3: IKEA's revenue
Major Players in the Retail industry
Listed are some of the major players in the retail industry which are considered competitive to
IKEA.
Figure 4: IKEA and its competitors position in the market
Top 2 dominant organizations in the industry
1. Bed Bath & Beyond Inc.
2. Williams-Sonoma
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1. Bed Bath & Beyond Inc
The first store selling specialty linens and bath products was opened by Warren Eisenberg and
Leonard Feinstein in 1971 in Springfield, New Jersey. Today its retail store brands also include
Christmas Tree Shop, Harmon Health and Beauty, and BuyBuy Baby. [10]
History:
Bed Bath & Beyond Inc. operates the largest houseware goods specialty stores in the United
States. The company has a chain of over 300 stores that sell such domestic merchandise as bed
linens, bath accessories, kitchen textiles, cookware, dinnerware, kitchen utensils, small electric
appliances, and basic home furnishings. Throughout the company's short history, bigger has
proven to be better. In the mid-1980s, Bed Bath & Beyond was a pioneer in the concept of
superstores: large, well-stocked specialty shops with prices allegedly comparable to, or lower
than, department store sale prices. Some Bed Bath & Beyond stores have over 80,000 square
feet--the average is 45,000 square feet--of selling floor and offer more than 300,000 different
items, stacked literally from floor to ceiling. The company expanded rapidly in the early 1990s
on the strength of the superstore concept. Store count continues to grow at a rapid clip and in
2000, the company recorded its eighth consecutive year of record earnings. The $1.8 billion
company has operations throughout the United States and plans to continue opening new stores
to support its goal of doubling its earnings every three years.[10]
Products and Services
Bed Bath & Beyond includes products such as Bath, Bedding, Kitchen, Home décor and
Furniture.[10]
Bed Bath and Beyond offers hundreds of products in the following categories.
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Bedding Kitchen Electronics Fine Dining/Gift ware Table Linens
Bath Cookware Casual Dining Rugs
Kitchen Cutlery Serve ware Wall Decor
Home Decor Furniture Vacuums Storage
Window Treatments Lighting Utility Cleaning
Services offered:
Shipping services to many items in the store
Provides and supports many local events
Committed to many social responsibility like
◦ Partnered with HealthyWomen.org (formerly the National Women’s Health Resource
Center) since 2004
◦ Offers local projects to preserve coastal and marine habitats and the life within them
Williams-Sonoma, Inc
Williams-Sonoma, Inc. is a high-end American consumer retail company that sells kitchenware,
furniture and linen, as well as other housewares and home furnishings, along with a variety of
specialty foods, soaps and lotions. Its international corporate headquarters is in San Francisco,
California, United States.[11]
History
Williams-Sonoma was founded in 1956 [4] by Charles E. (Chuck) Williams, selling professional
and restaurant-quality kitchenware for home use. Chuck Williams was one of the titans of the
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American food revolution. He had a tough childhood made even more so by the great depression.
By the time he was a teenager, he was on his own working his way through high school at a
California date farm. During World War II, he repaired war planes in East Africa and India. In
1953, he took his first trip to France. He quickly fell in love with French kitchenware such as
copper cookware, and is quoted as saying "I knew this was something that wasn't found in
America, but thought people would want." Soon after, he formulated a plan to import French
cookware into America. He settled in Sonoma, California in 1947 and taught himself how to
build houses before opening his first shop several blocks from the town square. The store quickly
became a destination. In 1971, along with—and at the suggestion of—regular customer Jackie
Mallorca, Williams began publishing a mail order catalog to expand his business beyond the San
Francisco Bay Area. By 1972 he was sending out thousands of catalogs, took on partners,
borrowed money and opened more stores.
Products and Services
Williams-Sonoma offers hundreds of products in the following categories.
Cookware Bake ware
Cooks' Tools Electrics
Cutlery Food
Home Keeping Outdoor
Table Top and Bar Serve Ware
Furnitures Grills
Services includes:
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Free Shipping for many items
Even offers recipes
Provides Top 10 for all categories in their website which are collected from customers
Separate link for Professional Chefs
Organization’s major Products and Services:
IKEA carries a range of 9,500 products, including home furniture and accessories. IKEA’s main
product is furniture, thus, wood products are its most important non-labor input. Currently, IKEA
is the third-largest purchaser of wood products in the world, behind Home Depot and Lowe’s.
IKEA provides the products and services based on the economy, society and environment.
Figure 5: IKEA's main focus
Some of the products are shown in table below:
Children's IKEA
Safety mattresses, changing table ,storage
furniture, children's highchairs, baby toys,
Cooking
Cooking accessories oven ware, knives &
chopping boards, mixing & measuring tools,
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children's beds, children's mirrors . food storage & organizing, dishwashing
accessories, Swedish food kitchen textiles,
frying pans & woks pots, sauce pans bake
ware kitchen utensils.
Bathroom storage
Sink cabinets, sinks Faucets, bathroom
storage furniture’s, bathroom accessories
Beds & mattresses
Full, queen and king beds single beds, guest
beds & daybeds, bunk beds, headboards
mattresses, sofa beds .
Chairs
Armchairs bar tables & chairs highchairs
Junior chairs stackable & folding chairs café
furniture, dining sets, step stools & step
ladders, office chairs, upholstered chairs
covers, dining chairs stools & benches .
Clothes storage
Hooks & hangers, wardrobes, chests of
drawers, clothes organizers, clothes storage,
systems racks & stands shoe, cabinets shoe,
coat & hat racks.
Decoration
Outdoor plant pots & plants candle holders
& candles clocks, frames & pictures, gift
wrapping, plant pots & plants vases, bowls
& flowers .
Lighting
Integrated lighting, ceiling lights, children's
lighting, work lamps, wall lamps, spotlights
LED lights, bathroom lighting, decorative
lighting, floor lamps light, bulbs &
accessories shades, bases & cords table
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lamps .
Sofas & armchairs
Modular sofas, armchairs, chaise lounges,
footstools , extra covers fabric sofas leather
sofas.
Tables
Bar tables & chairs, café furniture, dining
sets, nightstands, dressing tables, dining
tables, coffee & side tables
Textiles & rugs
Baby textiles, children's textiles, kitchen
textiles, curtain rods & rails, shower
curtains, bath mats, towels, bedspreads
blankets & throws, comforters, pillows
,place mats & dining textiles, curtains &
blinds cushions & cushions covers fabrics
Storage furniture
Pantry wardrobes, bed storage, headboards,
nightstands, dressing tables bookcases,
cabinets & sideboards, chests of drawers,
clothes storage systems ,drawer units, DVD
& CD furniture, filing cabinets, shelving
units, TV & media furniture, Wall shelves.
Some of the services that IKEA provides are:
Home delivery service:
IKEA charges the same delivery fee regardless of the weight or size of the order. They charge for
new products directly to the room of your choice starting at just $59!
Kitchen services:
IKEA kitchens were designed to be installed by the people, but IKEA knows sometimes a little
help makes the process go more smoothly. IKEA’s new menu of services gives the flexibility to
do as much as little work as customers likes to bring the dream kitchen.
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Measuring, individual kitchen planning and installation may not be available in all stores.
Customers have to get information with local IKEA store for available services.
Services includes in restaurants and play areas:
Customers are very satisfied with the food provided, especially the meat balls in the IKEA store.
IKEA store provides some free food with the purchase of 100 $ or more, which is a good
attraction for customers. They provide services of taking care of children while the customers are
shopping.
Organization’s Marketing Strategies
IKEA is an international home furnishings retailer. IKEA’s main vision is “to create a better
everyday life for the many people” according to their corporate website. IKEA’s furnishing
products cover a wide range of well designed, functional and low cost products making it
affordable to all. IKEA products are typically 30 to 50 percent below other competitors. IKEA
main goal is to provide low price. IKEA started out in Sweden and adapted its concept of “Do It
Yourself (DIY)” home furnishing in international markets. It standardized the process of
production, design and selling across all markets, but adapted to local culture when it came to
customer facing elements of retail selling.
IKEA’s motto of delivering high value at low cost guides its fundamental working principle of
operations in different as an international brand. It basically aims to operate similarly and to be
perceived similarly in every country when it has a retail presence. They keep their brand
messaging simple and that is reflected in their logo with the big blue letters in a yellow
background or vice versa.
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Product Strategies:
IKEA’s product range is similar with very little modifications across all its international retail
stores. IKEA makes minor adaptation to its products to specific needs of countries and region.
Their product lines are the same including the sub product lines and the prices are also similar,
just low enough to compete with the other competing stores. IKEA’s products concentrate on
people’s everyday need at home, especially the needs of majority of people, who have limited
income and limited space. IKEA provides functional products at low price such that most of
people can afford them.
IKEA has different design lines. Each IKEA factory concentrates in producing one design line.
One base raw material and a limited product range. This type of product manufacturing
optimizes efficiency and production volume. The Danville facility that opened in 2008
specializes in the manufacture of IKEA's LACK, EXPEDIT and BESTA lightweight panel
furniture and storage systems. All panels processing and finishing is done in house, including the
construction of the product lines' signature honeycomb panel.
IKEA’s uses product/price matrix as product strategy to evaluate product lineup. IKEAs product
development process starts with product-strategy council which consisted of a group of managers
who establish priorities for IKEA’s product lineup. Priorities are based on consumer trends.
Once a product priority is established, a product developer would set the product’s target retail
price using what the company referred to as “the matrix.” The matrix consisted of three basic
price ranges and four basic styles (see Figure B below). Based on each price range company
conducts survey, establishes benchmark, and then sets price lower than competitors. Matrix is
used to identify gaps in the company’s product line. By plotting the company’s current product
offerings on the grid and looking for empty spaces, product managers could readily identify
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market opportunities. Based on target retail price, the company selects manufacturer to produce
it.
Figure 6: IKEA's Product/Price Matrix
Pricing Strategies
The founder of IKEA Mr. Ingvar Kamprad started business when he was 17 years old. He came
up with idea of building elegant furniture at very low price. To produce furniture at low price
Mr. Kamprad came up with idea to preventing retailers and sold products directly to consumers
through large ware house and he also changed his furniture designs so that it is easy to assemble
and transport.
1. IKEA designers help in cost reduction by recycling left over material to create new
unique product example left over small pieces of wood is used to create photo frames,
wall decors etc.
2. IKEA’s Flat packing: Smart packing is used to reduce distribution, transportation and
warehouse storage cost. IKEAs flat pack allows seven times as many units transported
per shipping container than if the products were assembled. The result is reduced number
of freight shipments, emissions and transportations costs.
3. IKEA designers first set price range and work backward to achieve it. Designers look for
innovative material and manufacturing techniques to match price range.
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4. IKEA products are easy to handle and easy to assemble at home.
5. IKEA consumers pick up their own merchandise, get them billed and carry them to their
car, this helps cut down staff requirements and cost of selling.
Placement and distribution strategies
IKEA places its stores in the outskirts of major cities but keeps them close to freeways or major
road ways, making them accessible both for consumers and receiving their stocks. The other
added advantage of keeping stores away from the center of cities is cost, that helps IKEA stay
true to its mission of delivering high value at low cost. IKEA’s stores have a basic set of core
principles that are followed in all their stores internationally. They are layout and design, number
of departments, display and color, service levels to name a few key ones. Sticking to these set of
common principles helps IKEA to provide a similar shopping experience across all their stores.
Promotion strategies:
IKEA produces an annual catalogue of its product range; this dominates its in-market
communication strategy. It spends 70% of its annual marketing budget to produce 200 million
copies of this catalogue in 27 different languages. This booklet, full of pictures of its home
furnishing products is a key tool in IKEA’s marketing strategy. IKEA employs other tools to
capture the season shopping spikes. For example, here in the US, National Retail Federation
found that retail stores recorded a 12.8% growth in sales over prior-year period during
Thanksgiving holiday weekend in 2012. One in every five Black Friday shoppers bought home
furnishings or home décor products. IKEA offers price discounts and position’s its products for
seasonal sales by making it more attractive to shoppers. Another example to IKEA’s marketing
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ingenuity was its introduction of vanilla ice-cream to attract thrifty consumers into its stores in
china. Here’s the extract of the story from Wall Street Journal’s publication on March 3rd, 2006.
“When Ian Duffy was first put in charge of IKEA’s China stores four years ago, he spent hours
at the checkout line observing customers. He didn’t see many. Instead, he saw plenty of people
crowding the Beijing store for freebies – air conditioning, clean toilets and even decorating
ideas. Adding insult to injury: shops right outside were offering copies of IKEA’s designs at a
fraction of the cost. So, to lure shoppers, the Englishman launched what could be the cheapest
IKEA non-sale items in the world: a scoop of vanilla ice cream in a cone for 12 cents. Thus
began IKEA’s strategy to beguile the finicky Chinese consumer by slashing prices in China to
the lowest in the world – the opposite approach of many Western retailers.”
Organizational Leadership and Structure
The organization’s mission statement
The mission statement is reformed by a “business idea” which states
"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."[12]
The IKEA mission statement is to create a better everyday life for as many people as possible -
with prices so low that many people will be able to afford them. Who could argue with that? It
means that IKEA can never stop expanding because that's how it will reach all the people it
wants to.[12]
IKEA's Vision: "Our vision is to create a better everyday life for the many people." [12]
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Profile of top leadership
Ingvar Kamprad – Founder of IKEA
Born in southern Sweden, Kamprad grew up on a village farm. In his teens, he discovered an
aptitude for business and began importing and selling anything he thought he could make a profit
on. Starting to trade in cigarette lighters, Christmas cards and pens, at the age of 17 Kamprad
formed a small company, which took its name from his initials and the first letters of his family
farm Elmtaryd and nearby village Agunnaryd. IKEA was born. [13]
IKEA has made Kamprad one of the world's wealthiest people with a fortune estimated at
$18.5bn. But instead of a chauffeur-driven limo, he drives a 10-year-old Volvo and whenever he
flies, even long haul, it's in economy. Rather than traveling by taxi, he's even been known to use
Stockholm's subway and public buses to take advantage of his pensioner's discount. Mr Kamprad
himself - charismatic, self-deprecating, reclusive. It is his ideas and values that have penetrated
IKEA to its core. [13]
Ingvar Kamprad is no ordinary multi-billionaire. The founder of the IKEA furniture empire
travels economy class, drives a 10-year old Volvo and buys his fruit and vegetables in the
afternoons, when prices are often cheaper. [13] Ask him about the luxuries in his life and he
says: "From time to time, I like to buy a nice shirt and cravat - and eat Swedish fish roe." [13]
Best known for his thrift and his spartan lifestyle, he washes plastic cups to recycle them. He has
just dumped his long-standing Swedish barber because he found one in Switzerland, where he
lives, who charges only SFr14 (£6) for a cut. "That's a reasonable amount," he chuckles.
His behavior could appear mean but somehow Mr Kamprad manages to carry it off. He has made
it part of the IKEA mythology and part of IKEA's covenant with its customers. Our low costs are
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your low prices, the group implies. And the image of Mr Kamprad carrying his own bags is at
one with the IKEA customer who lugs his new shelf units home. [13]. One of Mr Kamprad's
characteristics is his obsessive attention to detail. He is a remarkable, self-confessed flawed
character whose life and business philosophy is rooted in thrift, hard work and leading by
example -- with a heavy dose of humility and simplicity built in.[13]
Some of his amazing quotes are [18]
"It was our duty to expand. Those who cannot or will not join us are to be pitied. What
we want to do, we can do and will do, together. A glorious future! “
“Waste of resources is a mortal sin at IKEA.
Simplicity and common sense should characterize planning and strategic direction.
Pernille Sipers – Lopez – Ex President, IKEA North America
Pernille Spiers-Lopez, a former journalism student, traveling saleswoman and human resources
executive, embodies both the rewards and dangers of this idiosyncratic mixture. She is in her
mid-40s, married, with two children. After an "epiphany" at a women's conference in 1997 and
her appointment as IKEA's head of North American human resources in 1998, Spiers-Lopez
began radically changing the company's approach to benefits, corporate culture, chain of
command and work/life balance. [14]
On top of offering full benefits for domestic partners, in 2002 she initiated full medical and
dental benefits for part-time employees working a minimum of 20 hours a week. IKEA only
recently began deducting $5 to $ 10 a month from paychecks for individual coverage of full-time
workers ancl $140 a month for their families. Part-time workers who work less than 20 hours a
week pay $64 to $185. [14]
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Spiers-Lopez has substantially increased the number of women and minorities in management.
Forty-seven percent of the company's 75 top earners are female. The number of women on
IKEA North America's 14-member management board has increased from one-Spiers-Eopez-to
five, including Brody, IKEA's North America's marketing manager, its head of new business
development and the deputy CFO. [14]
How the organization is structured to accomplish its mission
IKEA is a large formal organization and it is best suited to a hierarchical organizational structure.
This is because; there are more employees as it goes downwards from each level. This type of
organizational structure has many levels of management. The organizational structure has been
structured according to its own function i.e. marketing, finance, human resources and sales. This
is known as a functional organization. [16]
The hierarchical organizational structure of IKEA is very similar to a tall organization structure.
Looking at IKEA’s organizational structure, the chain of command shows a clear line for
messages within functional departments, so therefore; it leads to good communication. For
example, looking at the organizational structure of IKEA, there is a clear communication
within a human resources department. The hierarchy that is followed and the value chain as
shown below helps to achieve mission of IKEA. [16]
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Figure 7: IKEA's value chain [16]
Employment Outlook for Graduates:
IKEA give down-to-earth, straight forward people the opportunity to grow as individuals and
professionals. Together they work to create a better life every day for themselves and to the
customers. The coworkers response for working at IKEA is to because for the people. So it is a
people based organization. More than 90% of IKEA co-workers know what they are here for?
Because company provides the vision and clear values that you can believe in.
IKEA is a global known home and interior retailer from Swedish origin that is still expanding
rapidly. This is the reason they're always looking for bright and talented people to come work in
their stores or start a career in a corporate function. This company wants to offer career paths that
are interesting, unique and rewarding. There are even possibilities to work abroad. IKEA offers
various opportunities to interns, recent graduates and ambitious professionals. On their career
page you will find out more about IKEA’s culture browse jobs on-line and decide if you want to
work here. This company offers great opportunities in Communication and interior design,
Customer relations, Finance, IT, etc. IKEA has a company has job opportunities in the areas of
administrative and secretarial, human resources management and recruitment, sales
representatives and purchases. For the most recent jobs, career possibilities, trainee jobs,
graduate jobs or internships, IKEA advise people to register for free or login and visit the career
page of IKEA. That page will provides you extensive information about their vacancies and will
help you decide if you would like to work for IKEA.
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Evaluate What You Have Learned
The story of IKEA and its founder Ingvar Kamprad is truly inspiring. Ingvar started out as a
young farm boy and turned around not only his fortunes but also created a company which made
annual revenue of 27.6 billion euros in 2012 alone. The success story of IKEA can be a great
role model for any enterprising individual. [15]
The success of IKEA can be attributed to their guiding vision of delivering high value at low
cost. Every step of the way in their growth story, IKEA designed its products, marketing strategy
and expansion to keep the design simple, costs lower and increase utility. The fact that IKEA
was able to build assets worth 44.7 billion euros, become the largest furniture retailer and still
manage to remain a private company speaks to be strength of the company. Not many private
companies here in the US can claim such financial health. [15]
There are many reasons that make IKEA so popular, for example, cooperating with the suppliers
from all over the world, high efficiency of logics, using “life system” to find what customer
need, and so on. Follow the concept, IKEA try their best to give the customers what they
promised: low price, well-design, creating a better everyday life for many people. [15]
As a world famous international company, IKEA is like fresh air in to new target markets such
as: Middle East Australia and China market. It not only brings new strategy and model to their
competitors, but also brings the new life style and service to the customers.
IKEA already understand Middle East, Australia and China markets more than before. By
accelerating the speeds of expansion, IKEA will get more customers; the success of IKEA in
these markets is only a matter of time. [15]
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References:
1. The IKEA growth and history. Retrieved from http://www.IKEA.com/ms/en_US/about_IKEA/the_IKEA_way
2. The IKEA home furnishing products catalog. Retrieved from http://www.IKEA.com/us/catalog/allproducts/alphabetical
3. The business case study on UK. Retrieved from http://businesscasestudies.co.uk/IKEA/swot-analysis-and-sustainable-business-planning/introduction.html#ixzz2MnK084zQ
4. Source: Retailing: Specialty, September 6, 2012 Michael Souers, Specialty Retail Equity Analyst, S&P Industry Survey
5. Source: Household Durables, FEBRUARY 2013, Jim C. Yin, S&P Industry Surveys
6. http://www.forbes.com/sites/walterloeb/2012/12/05/IKEA-is-a-world-wide-wonder/
7. https://dspace.stir.ac.uk/bitstream/1893/2579/1/Article%20for%28SB3%29%20NRWA %206-7%2011%20IKEA%20m-strategies%20%28SB%29.pdf
8. Standardized marketing strategies in retailing? IKEA’s marketing strategies in Sweden, the UK and China - Steve Burt, Ulf Johansson, Åsa Thelander
9. What kind of career will you build? Retrieved from, http://www.IKEA.com/ms/en_AU/the_IKEA_story/jobs_at_IKEA/index.html
10. Information about Bed Bath and Beyond http://www.bedbathandbeyond.com
11. Information about Williams-Sonoma http://www.williams-sonama.com
12. IKEA Mission statements, retrieved from http://www.samples-help.org.uk/mission-statements/IKEA-mission-statement.htm
13. Information about IKEA founder, retrieved from http://retailindustry.about.com/od/retailleaderquotes/a/IKEA-Founder-Ingvar-Kamprad-Quotations-About-IKEA-Retailing-And-Management.htm
14. Information about IKEA top profile leader, retrieved from http://search.proquest.com.proxylib.csueastbay.edu/docview/219787071/abstract/13C5388D966EB0FADD/24?accountid=28458
15. Value based narratives from http://search.proquest.com.proxylib.csueastbay.edu/docview/198052745/13C538DED7F77F73AA5/5?accountid=28458
16. IKEA's organization structure to achieve mission, retrieved from http://www.reocities.com/timessquare/1848/IKEA.html
17. IKEA Group yearly Summary FY12 http://www.IKEA.com/ms/sv_SE/pdf/yearly_summary/ys_welcome_inside_2012.pdf
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IKEA
Appendix 1
Figure1: *IKEA is a privately held company, so financial results are not disclosed to public.
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