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Ikea Case Analysis

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Introduction

Ingvar Kamprad's rags to riches story starting from humble beginnings is an inspiration for all. Driven by core values of simplicity, an indomitable will to translate challenges consistently into opportunities, and an incredible 5:30 AM to midnight work ethic, Ingvar Kamprad built an enduring furniture company and served worldwide customers. IKEA's entry into US gives us an opportunity to understand the differences between Scandinavian and American customers, and examine the growth strategy.

At age 17, Ingvar Kamprad founded IKEA with money (a gift) from his dad for successfully completing his studies. In 1951, he published his first catalog. Two years later, he opened a showroom in Almhuit and soon thereafter began designing his own furniture. In 1956, IKEA started testing flat packages. They designed products that could be packaged flat, which greatly reduced company and customer costs.

IKEA opened their first store in Almuit in 1958, followed by another in Stockholm in 1965. Between 1965 and 1973, they opened seven new stores in Scandanavia, capturing 15% of the Swedish market. Business was going great, and it was time to expand. In fact, Kamprad said, "It is our duty to expand," dismissing those who insisted that furniture retailing was a strictly local business (Ingvar Kamprad and IKEA, 1996). Moving full steam ahead, Kamprad purchased a faltering IKEA franchise in Canada in 1979. Within 3 years, the canadian store was a lucrative business, and the management team set their sights on the Unites States.

By 2002, the IKEA Group was the world's leading furniture retailer (Ingvar Kamprad and IKEA, 1996). Their 154 stores, across 22 countries, and 286 million customers made up gross sales of $12 billion.

IKEA's Culture, Philosophy, and Strategy

IKEA's founder once said, "The true IKEA spirit is founded on our enthusiasm, on our constant will to…...

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