IKEA Management Overview

Essay by dunbar_9University, Bachelor'sA, May 2004

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IKEA has been very successful because of the time they spend understanding their customers. Ingvar Kamprad founded IKEA in 1943 at the age of 17. Ingvar originally sold pens, wallets, picture frames, table runners, watches, jewelry and nylon stockings through IKEA at a reduced price. Ingvar understood that he could buy products in bulk at a lower cost and still sell them cheap while making a profit. IKEA's success has come from the way they offer a wide range of well designed furniture products at prices lower than the competitors. By keeping their products prices low, they have been able to create a large demand for their products. IKEA had a vision, expressed by founder Kamprad, that the company should sell a basic product that is "typically Swedish" wherever it goes in the world.


Understanding and adapting to the customers needs

Wide range of well designed furniture products at lower prices

Inexpensive production

"IKEA spirit" of enthusiasm, thrift, responsibility, humbleness, and simplicity#

Innovative packaging ideas to cut costs

Production oriented

Customer assembly of product

Problems entering North American markets

In 1985, IKEA had achieved success in Europe and decided to enter North America.

They kept the same ideas and enthusiasm when entering the North American market, but were not seeing the same results. The people at IKEA realized that in order to stay in the North American market they would need to make some changes to their products. IKEA did not sell the matching bedroom suites that Americans liked. Its kitchen cupboards were too narrow for the large dinner plates needed to pizza. Its glasses were too small for a national that adds ice to everything. And the drawers in IKEA's bedroom chests were too shallow for American consumers who tend to store sweaters in them.