The founder of IKEA is Ingvar Kampard in Sweden since 1943. IKEA originally is selling fish, Christmas magazines, matches and seeds. Acronym for IKEA stands for I and K is founder’s initial name, E is Elmtaryd, his family farm name, A is Agunnaryd, a name from a village in Sweden where the farm located. In 1948, IKEA starts adding furniture in product line. IKEA goals are to provide stylish, functional design and cost efficiency which most of the people can afford it. Hereby, he starts to adapt machine production, Gillis Lundgren implement this concept and he come out the idea of self assembly, which pack the furniture into flat pack.
In 1957, IKEA started his self assembly concept. In 1958, Almhult become 1st IKEA store and restaurant is added in the store. In 1965, Kamprad open his store at Stockholm and Norway and Stockholm is the largest in Europe. Due to their store is too big, IKEA implement self service. By 1973, IKEA becomes largest furniture store in Scandinavia with 15% market share in Sweden. During 1976 and 1982 IKEA enter North America market and United States is at 1985. However they face challenge in enter US market.
Competitive in low end market, the size of the furniture not suits American size, different measure in US, location and currency exchange problem. However, they manage to solve the problem. As they have learn lesson from expanding outside Western Europe, they continue expand internationally. In 1987 they enter UK and acquire Habitat and run business under Habitat name. As for IKEA business concept and model, their target is the young and middle class. Their interior design of retail store is one way design with plenty of product. Besides that, IKEA trademark design product reflects the clean line Swedish.
The Business plan on Market Segmentation, and Product Positioning
For the purpose of this assignment, I am assuming myself as the owner of a plastic molded toy company in United States that manufacturers, and distributes plastic molded toys through retailers across the country and around the world. The company is capitalizing on the strong growth in the children’s toys segment and planning to expand in an aggressive manner throughout the nation. The company ...
By 1991 due to conflict with supplier, IKEA decide to purchase Swedwood, in Poland, with new technology and drove down their cost. As for their founder, Kamprad is a self discipline person, his management style is informal, nonhierarchical and team based. As IKEA grow, Kamprad decided his company not to go public because he wants to hold bold decision. As he grow old he decided not his son inherit his business. His solution is creating a unique corporate structure. Kamprad transfer his interest to charitable foundation, called Ingka Foundation.
In addition, IKEA trademark and concept transferred to IKEA system, whose parent company in Inter-IKEA. This corporate structure effectively moves ownership of IKEA out of Sweden to escape high taxes. In 1986, Kamprad give out his control to Andres Moberg but he exerts his control as an advisor to senior management. By 2008, IKEA has expanded their market to China, Russia, and Japan in 36 countries with 285 stores and 1380 suppliers in 54 countries. In its half century, IKEA has become a successful retailer in the world which growing by expand their market into foreign market and learns from failure in building its success.
