Ikea Case

1. What were the sources of IKEA’s successful entry into the furniture retailing business in Sweden?

Between 1935 and 1946 furniture prices rose 41% faster than household goods. Kamprad was intuitive enough to see this as a great business opportunity. IKEA took a new approach to selling furniture in Sweden. Instead of an expensive product that would take weeks for delivery, IKEA offered a product with a good design and functionality at a price that almost everyone could afford. Kamprad focused on selling furniture to young buyers who were often looking to furnish their first apartment. Also instead of the stores being small and located in downtown, Kamprad placed his stores on the outskirts of town but offered ample parking for his customers. Most importantly, IKEA took use of selling through a catalog that helped boost the business exponentially.

2. What were the management processes by which IKEA coordinated and controlled its European operations?

IKEA chose to do things much differently that almost all of its competitors. Simplicity and attention to detail were stressed at IKEA. With the company being so cost-conscious it was able to provide prices lower than other furniture retailers. The company operated very informally, and set its offices up in an open landscape. A senior executive commented on the office plan saying, “This environment actually puts more pressure on management to perform. There is no security available behind status or closed doors.” Creative Solutions were highly sought after at IKEA. This was shown when a new store opening was too crowded, and IKEA started letting customers into the warehouse to pick out what they wanted in order to keep the flow of people moving. Through simplicity and common sense IKEA chooses to do things that work and are highly successful.

3. What was Ingvar Kamprad’s role in IKEA development?

Kamprad was instrumental to a point in the development of IKEA. He instilled the major principles of cost-consciousness, simplicity, and common sense. All of these enabled IKEA to offer such a quality