Free Essay

Leadership Analysis of Ingvar Kamprad

In: Business and Management

Submitted By CamileChen
Words 3807
Pages 16
LEADERSHIP ANALYSIS OF INGVAR KAMPRAD
!

!1/!11

Leadership Analysis of Ingvar Kamprad
IKEA, founded in 1943 in Sweden. The IKEA Group has become the largest furniture household businesses in the world. It products including seat / sofa series, office supplies, bedroom series , kitchen series, about 10,000 products. IKEA has 31 stores in 38 countries, 16 stores in China. China has become one of the most important space of IKEA 's largest procurement market and business growth, playing a decisive role in IKEA 's global strategy. The CEO of IKEA, Ingvar Kamprad, one of the richest men in the world. He was born in Mar. 30, 1926 , a town in the south of Sweden. His father is a farmer. He had the rich life in his childhood. But he was interesting in riding a bicycle, selling the products to the neighbors.From this he can feel the happy of earning money. He was not only good at finding others needs but also good at promoting his products. In 1943, Kamprad established his own company, called IKEA. In my paper, I will comb how Ingvar Kamprad grew up in the business world and his leadership behaviors and traits. (Zuvela, 2013)
Life Experience
Childhood period
Ingvar Kamprad was the first child in his family, when he was a little boy he had a strong talent in doing business. Such as his aunt helped him to buy 100 boxes match cost €88, then he sold them out by €2-€3 even if €5. So his profit margin is €1-€2. He was very excited about that. He also sold the fishes and the flowers. From then, he was interested in selling and decided to do it. Actually, his business talent from his father and mother. His mother from a huge business family in his hometown. And his grandfather was a famous businessman operated a good shopping mall and a hardware store. And in his childhood, he only have a dream that helping his father with money.
(Wang, 2009)
Became a furnisher
After his graduate from middle school he wanted to set up his own company in 17 years old. He wanted to combined theory and practice together. With his uncle’s help, he set up own company

LEADERSHIP ANALYSIS OF INGVAR KAMPRAD
!

!2/!11

called IKEA. The name combined with two people’s name and two location’s name in it. Ingvar,
Kamprad, Elmtaryd and Agunnaryd. At first, IKEA sold all of the low price products that people need, such as watches, pens… After Kamprad came into the Goteborg Business College, in that place he learned about many things that Marketing had became a most important one in his heart.
He realized in order to sell the cheapest product to the customer, controlling cost is the most important thing in a company operation. So recycle method was encouraged in this company. In that time, all the products in Sweden were selling through the mailing method even if the furniture either. However, the competition in this industry was strong. Some companies using the low price to attract the customer, so the quality was hard to control. Kamprad found mailing method had a big problem that the customer can not touch the product, they only knowing the product by the advertisements so that the cheating behavior occurring in sometime. IKEA need to make a choice that Kamprad found the furniture industry having a big potential so he decided to give up other businesses only focus on selling low price furniture products and make a furniture physical store to showing his products for a long time. He let people to compare price and quality for the different products and decided to buy which one. After he bought a old furniture store he told the customer that IKEA only to sell the furniture and national product from now. And then he set up the furniture store for two floors and put the low price products together and high quality high price products beside them. Fortunately, the customers all choose the higher one. From then on, Kamprad had become a furnisher.(Torekull, 1999)
Hard time for developing
From 1953 after IKEA became a real furniture store, its hard time was coming that not only for the IKEA but also for the Kamprad. There was a big company monopolized the furniture industry called Carte. They refused another competitors became into the industry in Sweden. So they made many trouble for IKEA such as prevented their exhibition and their marketing fair. National
Federation of Furniture Dealers sent a declare to every furniture supplier, if they still provide

LEADERSHIP ANALYSIS OF INGVAR KAMPRAD
!

!3/!11

products to IKEA they would be punishment. Some of them scared about that, some of them still in touch with IKEA and trade in secretly. In this hard time, Kamprad opened a series companies to play many different roles in the market. That means IKEA not only a seller but also a buyer. They had a company for the export, a company for the import, a company famous for the foam rubber products and another company focus on mailing. Whatever others did, IKEA was always in operating and Kamprad never stop thinking. At that point, a big idea appeared his mind. He decided to opened a new market. He chosen Poland. In Poland he selected a low cost furniture manufacturer and produce his products. Because of the excellent wood craft and low price IKEA relived in
Poland. Many people had less consciousness in global marketing, Kamprad was the first person who lead his company go abroad. In 1974, he opened German furniture market. In 1985 and 1987, went into North American and England. Every time they went to a new place they would open a small shop to adapt local culture and then they would open a large one. For this method, in 2003,
IKEA Group revenue was €11.5 billion. (Torekull, 1999)
Leadership Traits
Administrative Ability
Kamprad thought that the key of the management was ‘LOVE’.

Payed attention to the

employees and gave them warm care, as a team leader, it would let the whole company became emotional connect with employees’ families. Kamprad admitted that the emotional issues and business issues was difficult to spared it. So Kamprad established various rational and wholesome systems to protect IKEA can heathy grow up without any restrictions from anyone. Kamprad created a administration channel was ‘HUG’. That was an unique administrative ability for
Kamprad. He wanted to through the ‘hug’ way to keep this business can walk long long time and this spirit can influence the everyone work in IKEA. Kamprad thought new member in a company, especially for the one who would into an important position, they needed to have this quality —— like hugging. Once, he was talked with a man for a whole night who would be a manager in the

LEADERSHIP ANALYSIS OF INGVAR KAMPRAD
!

!4/!11

future. He pulled this man’s arm and kissed his cheek with thanks and encourage. But the man was petrified in that time and palsied. He thought hugged his man can let him feel warm and be trusted.
As the ‘HUG’ way, Kamprad also had full of populace's thoughts and feelings. At the beginning of the business, Kamprad slept with his employees as in his childhood slept with his friends in the farm. They were working together, eating together, talking about life and talking about dream. Even if he would be clean the tobacco pipe for his employees in order to they can smoke before the breakfast. Two managers in Poland said, they loved Kamprad. Because he was a warm leader.
(Collins, 2011)
Persistence
Kamprad said every thing in the world would be meet difficult, the key point is whether you had courage to fight with these difficult. Whatever how big was the difficult, if we tried to do it best, everything would be ok. As I mentioned before, from 1950-1952 it was a hard time for IKEA and
Kamprad. Even if for these, the monopoly organization can not beat IKEA, can not beat Kamprad.
He still believe they can win. So he tried many ways to fighting with them. He opened a series companies to play many different roles in the market. That means IKEA not only a seller but also a buyer. The monopoly organization did not allowed Kamprad appeared in the exhibition used his name, he would used other company’s name under his company or he used dependable supplier and interested people to helped him. Whatever others did, IKEA was always in operating and Kamprad never stop thinking. He showed to everyone, if anything he wanted and interested he would be do it persistently. (Collins, 2011)
Social Perceptiveness
In IKEA development, many decisions from Kamprad had been provided he had a strong social perceptiveness, he always knew what the customers needed, what the market needed and what should they did. As I mentioned before, he chose Poland and went abroad. Both of them were decided by Kamprad. In German, United States and England, he believed he would had a good

LEADERSHIP ANALYSIS OF INGVAR KAMPRAD
!

!5/!11

opportunity to earn money. Kamprad found everyone like him wanted to buy the high quality and low price products. So IKEA would focus on these, they would provide, everyone can buy, good furnitures. Now if you went into IKEA, you would attracted by the big yellow discount brand!
Everyday in IKEA would have product to be discount. And also he found people love to try the product first and then bought it. So he decided to open an experienced store and let people to have a real feeling about his furniture. The showing product was not alone they were mixing together. Such as they would set up a small decoration bedroom and sold their furniture.

The most amazing

department in IKEA was his restaurant. Kamprad said hungry would gave a bad business. He did not want their employee worked in hungry situation and his customer shopped in hungry. So he created IKEA restaurant. At first, it can only sale the coffee and hotdog. But now the IKEA’s food had became a symbol for Sweden’s food. Their delicious food attracted many customers to try it in
IKEA. And of course this department can bring a huge revenue for IKEA, 1.6 billion dollars a year.
Someone worked in IKEA said open a restaurant in IKEA this the best way to attract customers.
(Zhang, 2006)
Enthusiasm
For IKEA, it’s successful can not do without the Kamprad’s enthusiasm. Kamprad had put all the time and enthusiasm to IKEA. From his biography, we can know Kamprad’s first marriage end because of the developing company, he became busier and busier than before. His ex-wife said,
“Kamprad never working for 8 hours, he always working far exceeded 8 hours. ” Her did not like his enthusiasm to his work, and do nor care about family, so they decided to divorce. Kamprad said,
“I can not look forward to the next generation like me to tied himself on the business. That means, they should give up all the quiet life and other wonderful things. ” As he said that, he used his enthusiasm to pay all for the IKEA. Fortunately, IKEA’s success also feed back for him . His enthusiasm involved all the employees, we helped IKEA became more and more successful. (Burdi,
2004)

LEADERSHIP ANALYSIS OF INGVAR KAMPRAD
!

!6/!11

Emotional Stability
That is a basic trait for every successful leader. For Kamprad, his successful can provide this point. At the beginning, it was very hard for him. In the middle period, he in order to broke the monopoly role through countless sleepless nights.Even his mother died and his wife left with him, he still worked in his position. He had been persevered by himself. He asked himself do not bring these to work and also encourage his followers to give them the positive working environment.
Kamprad said, “that can really encourage employees to help with me through the difficult period, I do not want to lose them.”
Leadership Behavior of Ingvar Kamprad
Transformational Leadership
At the beginning, he slept with his employees in a small hotel in bed. In that small room, he encouraged his employees to do better and said he would always be here with them. Kamprad was good at discovering talented person and encouraged him to do better and better. Such as IKEA designer, the first designer, Gilles · Lund glen. He was famous for he took down the leg of the desk then packaged them, that was called Graphic Package Design in IKEA. Kamprad found he was a special man for him so he decided to trust him and putted him in an important position. When the company in the hard time, Kamprad hold his hand and said, “If these products can well, I promised you also can live well.” Gilles was also a trustworthy person, he did not sign other contract with others. Kamprad did not good at drawing but Gilles always stay with him, so he can draw the thinking of Kamprad. As a result, Gilles did not let Kamprad down about him. He created tens of thousands revenue for IKEA. Every products went into the market would win the good reputation.
Kamprad said “I like working with him. Because we can try on our own terms, fail, try again, then success.” (Tan, 2005)
Autocratic Leadership

LEADERSHIP ANALYSIS OF INGVAR KAMPRAD
!

!7/!11

As we also know, IKEA is a family business, everything in this company was decided by
Kamprad. Once he was not attended in a meeting, they decided to choose which material for a chair.
The plaintiff wanted a black one but the defendant wanted a yellow one. They discussed for long time. At the end, the plaintiff said, Kamprad would love the black one! Then they stop fighting, everyone agreed to choose the black one. Actually, Kamprad had no idea about anything for these material. In the company, always appeared things like this. Their solution way was, Kamprad would like this! “Kamprad” this name was useful in this company.
Supportive Leadership
The famous management way is “HUG”. Kamprad though this way to encourage his employees to do better and better. In his hug, he always with a deep kiss on someone’s cheek. He wanted his employees felt that he was really trusted them and needed them. He always fixed followers eye and gave them a good manly squeeze. It was done in an intimate transfer as though they were actually close friends. After the discussion, he would give followers a hug to show gratitude. Besides, his employee recalled that Kamprad would hold a party in his suburban room to celebrate with followers and his wife when a new mall opened. They stayed together all night singing, dancing and talking together. (Torekull, 1999)
Reference of Ingvar Kamprad leadership in Hospitality Industry
A sense of awe and charisma
Kamprad has a sense of awe. He knows the important for his employees and customers. In consequence he show his great respect to other especially his followers. He tried to keep the excellent people stay. Many people said, Kamprad’s success not only for his talent in business but also because of his charisma. To build stable and efficient team had become a goal of IKEA.
Kamprad thought that after running team would have better performance because of they have the same goals and belief. (Zhang, 2006)

LEADERSHIP ANALYSIS OF INGVAR KAMPRAD
!

!8/!11

That point is the key point, the leader of hospitality industry should be learned. He should use their charisma and an understand heart to facing their followers. High turnover rate, making the department of a hotel always stay in running team period, they can not have a same goal and belief.
Low salary, high pressures, working time over 8 hours a day, abnormal live time makes the front line employees suffering everyday. In that situation, they need a leader to do care about them.
Actually some leaders in the hotel had realized this problem. David Travers, the GM of Crowne
Plaza Chaoyang Utown. He usually go around in hotel in the morning, and talk to employees face to face. Every month, he will attend to employees’ birthday party. And will have a working review dinner for the employees who had work in this hotel for one month. In that dinner, GM will talk with them about their experiences in this month and what they need in live. The new staff feel warm about the dinner. Mr. Travers said he hope because of him everyone can work happy in his hotel.
But for a whole hotel only GM to do this, is not enough. It should ask every leader in each team have this sense to help the hotel to keep good staff to stay.
Be generous and career development to the talent person
For Kamprad himself, he was a talent person and he was also a lucky person because of his uncle’s generous help. He said if not have uncle’s initial believe help, IKEA would not be like this.
Therefore, in the future, when Kamprad met a talent person he would be performed his generous.
Such as his chief designer, he told him IKEA in here he will be in here. He admitted to give him the best treatment to wish he can stay in IKEA. He did care about each employee and encouraged them to do better.
But in hospitality industry, one sentence was popular, “ Work in hotel is compete with the working years. If you stay in a hotel for a long time you would get a good position. ” That means even you are talent in this position, it is also hard to give you more reward because of the working years. This unwritten rule had discourage participation for the talent person. In the negative process, they became less and less interest in it. So many talent people will not live in this industry for a long

LEADERSHIP ANALYSIS OF INGVAR KAMPRAD
!

!9/!11

time. But more and more hotel group have realized this problem, so they decided to create their own management trainee program in order to keep the young and talent person stay in hotel industry.
That a good way to reduce this problem.
Be family with followers
Kamprad thought be family with followers that was a way to let them felt about the leader’s care and their values. Just like the “HUG” administrate model can bring the followers nice feeling. For that can improve the team’s performance.
For the service industry this is very important, especially for the hospitality industry. The employees satisfied related to the customers’ satisfied. So if the leaders want the customers live in this hotel have a wonderful experience, the first point is do care about your employees. Especially for the first-line employees. Like a family, even they worked in a hard and boring position they also can feel comfortable for it, at the same time they will feel working for their own family.
Conclusion
IKEA has become the largest furniture company in the world, it attract the more and more customers by its unique and simple design products. IKEA’s successful not only attribute to the smart team but also because of the important person, Kamprad. He used his unique leadership behavior to lead the generations employees in IKEA to work hard. Because of his administrative ability, IKEA likes a family hug every employees working in his company. He solved the high turnover rate problem, everyone working in IKEA feeling happy and warm. He did care about employees’ feeling and gave him encourage, in the same way, employees were all working hard and enthusiasm to help IKEA had a greet profit. Because of his persistence, IKEA pulled through many difficult. Kamprad said “Anything will get in trouble, the key method to deal with the thing is whether you have courage to fighting with them. No matter how big the trouble is, if we do it, the things will be better. ” Depend on this belief, he leaded IKEA continuously to create the business miracle. Because of his social perceptiveness, he always knew when and where, what should they

LEADERSHIP ANALYSIS OF INGVAR KAMPRAD
!

!10/!11

did. For himself, he always niggards with his money, never pay attention on the luxury enjoyment, only focusing on the quality. Relied on this reason, he tried his best to make the low cost and high quality products to the customers. The same, lots of decision, also because he found he should did then he decided to did it. His sharp observations made IKEA leading edge of this industry and became a attitude toward life. Kamprad said, in his whole he did not do something right. At the beginning he was not a good husband then he was not a good father in his first family. But he still tried his best to do better. IKEA as a child for him. His autocratic leadership behavior only because that he did not want his child get heard from anyone. There was a time when many magazines discussed whether he was the richest man in the world, he did not care about it. He always thought how can make his company better and better. (Wang, 2011)
Finally, Kamprad completed his initial dream about his company. Nowadays IKEA is not only a beautiful furniture company but also a attitude for life. It can make young people find their life’s hope. For Kamprad, he is a successful leader in the furniture industry even in the business world.

LEADERSHIP ANALYSIS OF INGVAR KAMPRAD
!

!11/!11

Reference
Wang, X. (2009, 4). Ingvar Kamprad, the warrior of business kingdom. Franchise Market Magazine
, 32-33.
Torekull, B. (1999). THE IKEA STORY. Collins; First Edition edition.
Anonymous. (2005). Busniess with love (Dizhou, T., Trans.). Nanjing, China: Shanghai Far East
Publishers.
Zuvela, M. (2013, July 24). IKEA mulls joint venture with Bosnia furniture maker. Retrieved from
Reuters.Retrieved: http://www.reuters.com/article/2008/01/08/idUSL0861625720080108 testervn (2011 Mar. 1). Ingvar Kamprad’s leadership style. Retrieved from http:// testervn.hubpages.com/hub/Ingvar-Kamprads-leadership-style anonymity (n.d.). ANALYSIS OF LEADERS IN GLOBAL BUSINESS. Retrieved from https:// culctayarf.wordpress.com/2012/04/02/analysis-of-leaders-in-global-business/ Al-hammadi, S. (2013). 0 IKEA: Leadership Leads to Product Innovation and Globalization.
Retrieved from http://www.academia.edu/5276306/
IKEA_Leadership_Leads_to_Product_Innovation_and_Globalization_Human_Resource_Managem
ent
Hu, X. (2006, 12). Ingvar Kamprad, the thriftiest rich merchant. Wise People , pp. 58-60.
Kamprad, I. (2003). The Best Leadership IS BY Example. Retrieved from The New York Times and
Forbes: http://www.evancarmichael.com/Famous-Entrepreneurs/825/Lesson-2-The-BestLeadership-is-by-Example.html
Clear, J. (2014, 8 28). How to Build Skills That are Valuable: Lessons Learned From Selling
Matches. Retrieved from Entrepreneur: http://www.entrepreneur.com/article/236835

Similar Documents

Premium Essay

Case Analysis

...Case Analysis: Kamprad, Leader of IKEA MBA-530 - Organizational Behavior Introduction – Ingvar Kamprad Sustaining a healthy lifestyle consists of having a rewarding job surrounded by great leadership. A defining career is what Ingvar Kamprad has made for himself and has helped others to achieve. His sole purpose was not to be extremely wealthy, although he is. Mr. Kamprad chose to follow his values, including a responsible work ethic that began from a young age. Born within a class of people that thrived on hard work, Mr. Kamprad understood the meaning of dedication. He started as a teenage entrepreneur selling small office accessories and greeting cards “ . . . using the local milk van to deliver orders” (Chan, 2013). Regardless of the size of his business then, Mr. Kamprad had a clear vision for better things to come. The following examines Mr. Kamprad and how he built IKEA into a corporate empire. He is a prime example of an excellent leader to his people and a well-informed manager of his business. Managing business and leading people have important distinctions however. Colleagues respect Mr. Kamprad as a person who genuinely cares about his employees with a talent for influencing them to succeed. There were mistakes along the way, but a proven leader like Mr. Kamprad faced them head on. IKEA, with its expansively designed stores and loyal customer base, was ranked in Forbes (2013), as “#41 World’s Most Valuable Brands”. Leading vs. Managing Managing and leading...

Words: 1139 - Pages: 5

Premium Essay

Overview of Ikea

...OVERVIEW OF IKEA HISTORY Ingvar Kamprad: The founder of IKEA, Ingvar Kamprad, began his business career as a young boy selling matches purchased in bulk individually for a profit to his neighbors near Agunnaryd.  As his business grew, he expanded to selling fish, seeds, Christmas decorations and eventually, pencils and ball-point pens which were a new phenomenon in 1935.  He was very clever in utilizing his resources - he delivered his goods by bicycle, and later used the local milk delivery vehicle to make deliveries. IKEA: In 1943, with a gift from his father, Ingvar established his business, using his initials, Ingvar Kamprad, the name of the farm on which he was born, Elmtaryd and the village nearby, Agunnaryd for the acronym. At this time, he was selling everything from pens and wallets to watches and nylon stockings by going door to door and selling directly to his customers. By 1945, the first advertisements for IKEA began showing up in local newspapers and he had developed a rudimentary catalog. IKEA Store: The first full IKEA store opened in Älmhult in 1958.  With 6700 m2 (72,118 ft2), it was the largest furniture display in all of Scandinavia. In 1963, the first IKEA store outside Sweden opened near Oslo in Norway, followed by the flagship store in Stockholm - a whopping 45,800 m2 (492,987 ft2) circular store inspired by the Guggenheim Museum in New York City.  The success of this store, and difficulties in serving customers due to an overfilled capacity led to...

Words: 2545 - Pages: 11

Premium Essay

Geography

...business culture and values with a strong Swedish image to other countries through the establishment of business there. History: IKEA was founded in 1943 in Sweden by Ingvar Kamprad. Kamprad was born in 1926 as the son of a farmer in Småland, a region in southern Sweden. At the age of five Ingvar Kamprad starts selling matches to his nearby neighbors and by the time he is seven, he expands to selling flower seeds, greeting cards, Christmas tree decorations, pencils and ball-point pens. In 1943, at the age of 17, Kamprad became an entrepreneur and created a commercial company called "IKEA." The word IKEA was an acronym of his name and “Ingvar Kamprad” and the address, the name of his farm and village: “Elmtaryd, Agunnaryd”. Company initially sold fish, vegetable seeds, and magazines to customers in his region. Then in 1950 IKEA added furniture and home furnishings to the product line. IKEA entered new markets around the globe in the 1980s. IKEA expands dramatically into new markets such as USA, Italy, France and the UK. Operating Environment: Ikea is the world's largest furniture retailer which specializes in stylish but inexpensive Scandinavian designed furniture. Ikea's success in the retail industry can be attributed to its vast experience in the retail market, product differentiation, and cost leadership. IKEA is successful in its mission to provide inexpensive, well-designed furniture to the masses. Now Ikea is present in 36 countries...

Words: 2452 - Pages: 10

Premium Essay

Ikea Invades America

...IKEA INVADES AMERICA INDUSTRY IKEA (an acronym for the initials of the founder, Ingvar Kamprad, his farm Elmtaryd, and his country, Agunnaryd, in Smaland, South Sweden.) was the brain child of Ingvar Kamprad who began his entrepreneurial career in 1943 by selling basic household goods at discount prices. In 1947,Kamprad began selling home furnishings. Six years later, he opened his first furniture showroom and two years later, IKEA began designing its own low-priced furniture. In 1958, IKEA opened its largest furniture display in Scandinavia with 6,700 square meters. In 2002, the IKEA Group was the world’s top and prominent furniture retailer. Ingvar Kamprad's leadership had played an important role in IKEAS’s success. Kamprad's vision was to improve the quality of daily life for the masses. Kamprad demonstrated from the very beginning a combination of salesmanship, practical business acumen, thrift, an identity with ordinary people, and an unconventional perseverance in the face of adversity. IKEA was known for its contemporary yet affordable furniture. Kamprad had long ceded day to day involvement in the company's activities, his vision and thoughts were deeply rooted in IKEA's culture. Kamprad's humble beginnings (he was the son of a farmer) had created a unique IKEA culture that was founded on respect for money and an innovative mindset. Kamprad was known for his frugal habits. This attitude trickled down to the co-workers, who would ensure minimal......

Words: 1309 - Pages: 6

Premium Essay

Retailing

...itself towards creating a better future for the people by producing reliable furniture at a low cost. The basic concept of the company is based on southern Sweden which has thin soil and poor people and they use their hard work to survive. The genius behind the company made sure that all these values were transferred to the company and its core values were designed around the basic inherited values. IKEA is a privately-held, international home products retailer that sells flat pack furniture, accessories, and bathroom and kitchen items in their retail stores around the world. The company, which pioneered flat-pack design furniture at affordable prices, is now the world's largest furniture retailer. IKEA was founded in 1943 by 17-year-old Ingvar...

Words: 2281 - Pages: 10

Premium Essay

Ikea's Success

...------------------------------------------------- Leeds Metropolitan University ------------------------------------------------- Leeds Business School ------------------------------------------------- Corporate Strategy Critically examine how the success of Ikea has been supported by its organisational culture Mona Thorvaldsen, Kate Mulvana, Joan Kawalewale, Tom A. Trosterud, Jodie Evans MA Public Relation Management & MA Business Studies Semester Two Module Leader: Lawrence Bellamy Contents Page No Chapter 1 – Introduction | 3 | | | | | Chapter 2 – Background | 3 | | | | | Chapter 3 - Appraisal | 4 | | | | | Chapter 4 – Analysis | 9 | | | | | Chapter 5 – Conclusion | 14 | | | | | Bibliography | 15 | Executive summary This report examines the corporate culture of the global furniture leader IKEA and discusses the link between Ikea’s culture and its performance. The cultural web is used as a device for breaking up the complexity of organisational culture and for demonstrating that Ikea enjoys a strong and consistent culture. The report identifies synergy between Ikea’s culture and strategy, arguing that culture has given the organisation competitive advantage. Furthermore it points to the complex set of factors influencing performance, and how Ikea’s culture is one of several components in its success-formula. 1.0 Introduction Organisational......

Words: 3872 - Pages: 16

Premium Essay

Commerce

... 3 Introduction 4 Part 1: Microeconomic analysis 5 I/ THE 5-FORCES APPLIED ON IKEA 5 1. Internal rivalry/competitors 5 2. Bargaining Power of Supplier 8 3. Bargaining power of Buyers 9 4. Threat of Potential Entrants 10 5. Threat of Substitutes 10 II/ APPLICATION OF SEVERAL MICRO ECONOMIC CONCEPTS 11 Part 2: The macroeconomic environment of IKEA: 15 I/ KEY POINTS OF SWEDEN ECONOMY 15 II/ ANALYSIS OF THE MONETARY AND FISCAL POLICIES 16 III/ SWEDEN ECONOMY NOWADAYS AFTER CRISIS 19 Part 3: Macroeconomics of competitiveness 19 I/ THE DIAMOND MODEL 19 II/THE CLUSTER ANALYSIS: 24 ABSTRACT Sweden is a country in northern......

Words: 6988 - Pages: 28

Free Essay

Ikea

...------------------------------------------------- Ekonomska fakulteta Univerze v Ljubljani ------------------------------------------------- Predmet: Poslovodenje v mednarodnem okolju ------------------------------------------------- Nosilec predmeta: red. prof. dr. Maja Makovec Brenčič ------------------------------------------------- Izvajalec vaj: doc. dr. Matevž Rašković ------------------------------------------------- Študijski progam: VPŠ ------------------------------------------------- Študijsko leto: 2012/2013 Seminarska naloga pri predmetu Poslovodenje v mednarodnem okolju IKEA ------------------------------------------------- Študenti: Vpisne številke: ------------------------------------------------- ------------------------------------------------- 1. Žiga Slapnik 19502547 ------------------------------------------------- 2. Miha Majetič 19501188 ------------------------------------------------- ------------------------------------------------- Ljubljana, 24.5.2013 Kazalo vsebine 1. UVOD 3 1.1. OPREDELITEV PROBLEMA 3 1.2. NAMEN 3 1.3. CILJ 3 1.4. METODOLOGIJA DELA 4 3. PREDSTAVITEV PODJETJA 6 3.1. Poslanstvo 7 3.2. Vizija 7 3.3. Poslovni rezultati 8 4. ANALIZA TIPA MEDNARODNEGA PODJETJA 9 5. KLJUČNI VIRI KONKURENČNIH PREDNOSTI...

Words: 4574 - Pages: 19

Premium Essay

Ikea’s Global Strategy: Furnishing the World

...Summary This author has provided an analysis of the IKEA case study found in the Marketing Management textbook. It analyzes the strategies used by IKEA to gain competitive advantage in markets outside of its original market. The report provides a background of the organization, recognizes IKEA’s main markets and examines corporate level strategies by identifying its target market and evaluating its pricing strategies. This case study will further analyze how culture, design, and price play significant roles in determining IKEA’s success. In addition, IKEA’s “global sourcing network of more than 2300 suppliers in 67 countries” (Peter & Donnelly, 2013, p. 411) allows its suppliers to provide furniture of all kinds to its customers. IKEA produced standardized products, however, this international strategy did not work for the United States. Therefore, the company has to take corrective actions. Table of Contents Executive Summary i Situational Analysis 1 Environment 1 Economic conditions and trends 1 Cultural and social values and trends 1 Political and legal issues 1 Technological factors 1 Summary of environmental opportunities and threats 2 Industry 2 Classification and definition of industry 2 Analysis of existing competitors 2 Analysis of potential new entrants 3 Analysis of substitute products 3 Analysis of suppliers 3 Analysis of......

Words: 3656 - Pages: 15

Premium Essay

Ikea

...dfghjklzxcvbnmqwertyuiopasdfghjklzx Case Analysis MGT 489 cvbnmqwertyuiopasdfghjklzxcvbnmq wertyuiopasdfghjklzxcvbnmqwertyuio pasdfghjklzxcvbnmqwertyuiopasdfghj klzxcvbnmqwertyuiopasdfghjklzxcvbn mqwertyuiopasdfghjklzxcvbnmqwerty uiopasdfghjklzxcvbnmqwertyuiopasdf ghjklzxcvbnmqwertyuiopasdfghjklzxc vbnmqwertyuiopasdfghjklzxcvbnmrty uiopasdfghjklzxcvbnmqwertyuiopasdf ghjklzxcvbnmqwertyuiopasdfghjklzxc Submitted To: Mohammed Hannan Miah Prepared By Group 7 073 003 030 073 004 030 072 105 530 073 016 030 072 779 030 Md. Tareq Rahman Shubro Barua Sanjana Mehnaz M Mazharul Arefeen Bhuiyan Sumayia Hassan Background of IKEA IKEA is a privately held, international home products company that designs and sells ready-to-assemble furniture such as beds and desks, appliances and home accessories. The company is the world's largest furniture retailer. Founded in 1943 by 17-year-old Ingvar Kamprad in Sweden, the company is named as an acronym comprising the initials of the founder's name (Ingvar Kamprad), the farm where he grew up (Elmtaryd), and his home parish. IKEA has 300 home furnishing superstores in 35 Countries and was visited by some 583 million shoppers. IKEA’s low priced elegantly designed merchandise displayed in large warehouse stores, generated sales of $21.2 billion in 2008, up from 4.4 billion in 1994. The fledgling company sold fish, charismas magazine, and seeds from his family farm. His first business had been selling matches, the enterprise Kamprad purchased them......

Words: 9302 - Pages: 38

Premium Essay

Economic

... 1. Background of the IKEA IKEA was establish in 1943 is the world’s largest furniture retailer which specializes in stylish. IKEA organization takes advantages in strictly management function (internal control) and expertise in superior telecommunication networks (external approaches) which create the competitive advantage for IKEA. Therefore IKEA had expanded its business in 26 countries over 128 fully-owned stores. First and foremost, IKEA use a catalog to tempt people to visit an exhibition then develop it by storing the store among whole world. IKEA spread the business globally by advanced telecommunications networks. IKEA’s attributed to its vast experience in the retail industry, in product differentiation and cost leadership. In addition, IKEA fostering close supplier relations through technology – transfer, large supply contracts and even low interest loans. IKEA soon gained a SCA over its competitors through cost-cutting and close supplier relations while placing an emphasis on the design process. In conclusion, IKEA added value though display store which offered a wide range of home furnishing...

Words: 2964 - Pages: 12

Premium Essay

Ikea Analysis Report

...IKEA Analysis Report Many companies and corporations struggle daily to sustain a competitive advantage and build a strong values-based service. The core difficulty that these companies face is how to create value for their customers and stakeholders such as suppliers and coworkers. A values-based service company can be built and be effective, however, the framework has to be set to ensure success. IKEA group has implemented a framework for the international company and has succeeded in sustainability as a values-based service company. Values-based service consists of attracting and retaining customers to make profits while creating value for customers (Edvardsson, 2006). Customers in today’s society need value added to the customer shopping experience through brand and service (Edvardsson, 2006). The key factor in brands is to show the consumer or customer how one brand differentiates from another and how it can meet that customer’s needs (Edvardsson, 2006). For example, IKEA offers top quality furniture at affordable prices, which also does not lack style and design. The market that IKEA targets wants style, and quality without having to break the bank in which IKEA unquestionably provides to its consumers and stakeholders. Furthermore, service is rooted in a customer’s experience and can also add or decrease value to a brand. A firm can create a sound brand by implementing an efficient and sound branding image that caters to the needs of its targeted market. So how does...

Words: 1979 - Pages: 8

Premium Essay

Ikea

...IKEA- Case Study Analysis Short Summary : IKEA was founded by Ingvar Kamprad who was a resident of Sweden. He had started doing his business in 1943 at the age of 17. He opened a start up of his own of selling furniture. He had to face heavy resistance initially when he had tried to sell his furniture due to a price war with their main competitors. Finally IKEA made the decision to produce its own furniture due to competitors trying to force suppliers to boycott IKEA products. They also contacted independent makers and sources in Poland to help them out. And their products gained tremendous response. By 1961 , its turnover went over 40 million US $.Slowly yet steadily it expanded . Its features and concepts such as Self Service, Low charges, Cash and Carry added new dimensions to IKEA. By virtue of its impeccable marketing ,planning and other strategic steps, IKEA became world leader in production and export of Swedish furniture. Employees had been given due freedom and bureaucracy was discouraged. In due course of time, it became an international brand with its off shore operations in USA, China, Canada etc. In a nutshell, IKEA followed its basic idea of “Retail in Detail” to provide customer satisfaction and hence it became one of the best companies in the world. Strategy of IKEA • Self Assembly features cuts operational and transportation costs • It concentrated on individual marketing rather than mass marketing • It focussed on diversified business and gave......

Words: 818 - Pages: 4

Premium Essay

Culture and Organization

...furniture organization which one of the world’s top furniture organization. IKEA also designs its products and sell those items in more than 300 IKEA stores that are from different countries around the world. IKEA offer the high-quality items at low prices. The largest market of IKEA is in Germany with 44 stores. United States has the second most IKEA store amount in the world with 37 (Loeb Walter, 2012). The company is care for the customers and in order to make more profit for the organization and IKEA also care for the customers, IKEA buy items in unpackaged, ships and stores matters unassembled using smooth packaging and customers assembled those a lot of items in their houses. IKEA was founded in 1943 in Sweden by Ingyar Kamprad (refernceforbusiness, 2015). In 1958, the first store of IKEA was founded in Sweden. After that IKEA extended to Scandinavian countries. Firstly, IKEA stores in Norway and Demark were opened which are the neighborhood countries and then IKEA started open their stores in Switzerland in 1973 and Germany in 1974 (Loeb, 2012). The first store in the United States was opened in Philadelphia (1985). The first store that IKEA faced problems is in Japan because of their culture differences, lifestyles and practices (Chaletanone and Cheancharadpong, 2008). Since IKEA entered into the country that has culture difference in social organizations, there will be numerous influences on organizational efficiency. Nowadays, many international......

Words: 2826 - Pages: 12

Premium Essay

Ikea

...refuses to publish detailed financial data, its net profit margins were rumored to be around 10 percent, high for a retailer. The founder, Ingvar Kamprad, now in his 80s but still an active "adviser" to the company, is rumored to be one of the world's richest men. COMPANY BACKGROUND IKEA was established by Ingvar Kamprad in Sweden in 1943 when he was 17 years old. The fledgling company sold fish, Christmas magazines, and seeds from his family farm. It wasn't his first business- that had been selling matches, which the enterprising Kamprad had purchased wholesale in 100-box lots (with help from his grandmother who financed the enterprise) and then resold them individually at a higher markup. The name IKEA is an acronym, I and K being his initials, while E stood for Elmtaryd, the name of the family farm, and A stood for Agunnaryd, the name of the village in southern Sweden where the farm was located. Before long Kamprad had added ballpoint pens to his list and was selling his products via mail order. His warehouse was a shed on the family farm. The customer fulfillment system utilized the local milk truck, which picked up goods daily and took them to the train station. In 1948 Kamprad added furniture to his product line, and in 1949 he published his first catalog, distributed then, as now, for free. In 1953 Kamprad found himself struggling with another...

Words: 6306 - Pages: 26