Ikea: a Swedish company history, development, and growth of ikea over time Angelo Gonzalez Brittany Murray Jasmine Scott Jennifer Katzman Pebbles Gilbert “At IKEA our vision is to create a better everyday life for the many people. Our business idea supports this vision by offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.”

History: in the beginning… At the age of five Ingvar Kamprad starts selling matches to his nearby . neighbors and by the time he is seven, he starts selling further afield, A using his bicycle. He finds that he can buy matches in bulk cheaply in Stockholm and re-sell them individually at a very low price but still make a good profit. From matches he expands to selling flower seeds, greeting cards, Christmas tree decorations, and later pencils and ball-point pens. Ikea is officially started in 1943 when Kamprad is seventeen years old with a graduation gift from his father. Originally a discount retailer of basic household goods. 1947 is when Ikea begins to sell home furnishings.

Development and Growth 1940s-1950s The roots of a furniture dealer. 1960s-1970s The IKEA concept starts to take shape. 1980s IKEA expands dramatically into new markets such as USA, Italy, France and the UK. 1990s IKEA grows even more. 2000s IKEA expands into even more markets such as Japan and Russia. 1940s-1950s The roots of a furniture dealer. Ingvar Kamprad is entrepreneurial in developing IKEA into a furniture retailer. This period sees the exploration of furniture design, self assembly, advertising, the use of a catalog and a showroom to reach the many people. 1960s-1970s The IKEA concept starts to take shape. New IKEA stores open and hero products are developed such as POÄNG and BILLY bookcase. It is a time where concept takes shape and is documented in Ingvar Kamprad's The Testament of a Furniture Dealer. 1980s IKEA expands dramatically into new markets such as USA, Italy, France and the UK. More IKEA classics arrive such as KLIPPAN, LACK and MOMENT. IKEA begins to take the form of today's modern IKEA. 1990s IKEA grows even more. Children's IKEA is introduced and the focus is on home furnishing solutions to meet the needs of families with children. The IKEA Group is formed and responsibility for people and the environment is seen as a prerequisite for doing good business. 2000s IKEA expands into even more markets such as Japan and Russia. Everything for the bedroom and kitchen is explored and presented in coordinated furnishing solutions. This period also sees the successes of several partnerships regarding social and environmental projects. To get more HISTORY about IKEA visit http://www.ikea.com/ms/en_US/about_ikea/the_ikea_way/history/index.html

Trouble adapting to the American style & lack of innovation! Ikea’s Big Problem Being a Top Retailer and Invading America is no piece of cake! Trouble adapting to the American style & lack of innovation!

Issue: Adapting to American Lifestyle Challenges Durability “Low price with meaning”/Poor quality Scandinavian style design/longevity America is very different culturally from most European markets: Different sizes of appliances Different sizes of beds Different ideas of comfort Measured in Metric system instead of the standard system of inches and feet used in the USA

Perspectives American’s and owners

American perspectives -The products are not reliable -Unique Style -Job opportunities America is a culture built on the idea that everyone has a dream, and they want it that way, they should be able to have it that way. Many Americans feel entitled and are not open to change. But that is part of what makes our culture the way it is.

OWNERS perspectives -Privately owned -1982 IKEA Group is owned by a foundation -ownership structure -organization independence -long-term approach -Franchising -Opportunity for higher profits

SWOT Analysis Swot matrix knowledge

Facts and Figures > Yearly Summary > Welcome Inside 2011 http://www.ikea.com/ms/en_US/pdf/yearly_summary/Welcome_inside_2011.pdf 2011 Version of Exhibits 2,3,5, & 6

The Companies overlook Total of 37 IKEA stores located in America

SWOT Analysis Strengths Opportunities Threats Weaknesses -Internal strength is employees cost efficient -Price of Product -Material -Manufactures capabilities -Good design and function Weaknesses -Americans did not like European Style -the cabinets didn’t fit in the kitchen -the sheets wouldn’t fit the beds -the sofas were too hard -kitchen supplies were too small for American preference. -Transportation of products Opportunities -Expand the online market -allowing more of the products that are visible -Communicate with customers Threats -Economic recession -People not buying -Hand downs from previous owners

SWOT Matrix Strengths -Internal strength is employees cost effient -Price of Product -Material -Manufactures capabilities -Good design and function Weaknesses -Americans did not like European Style -the cabinets didn’t fit in the kitchen -the sheets wouldn’t fit the beds -the sofas were too hard -kitchen supplies were too small for American preference. -Transportation of products -IKEA can continue to rely on market research and product lineup to help meet Americans needs -Make products in flat boxes and not already pre-set up -Also can add a small fee for set-up, which can create a job for the economy Opportunities -Expand the online market -Communicate with customers -They can save more money by making the online market. Can order straight from logistics and do away with creating the store and having employees and rental fees. -Robotic manufacturing to expand the online market -IKEA needs to be able to concentrate on the American peoples styles -To be global you need to act local -Give the Americans what they want Threats -Economic recession -People not buying -Hand downs from previous owners -IKEA has affordable products for customers that will help customers come to their business in a recession -Advertise the affordability of the products

Possible Actions Change some of the product offerings and influence some of the American tastes and choice of style: Adapt cabinets to accommodate American appliances Change bed sizes to the ones commonly used in the United States Advertise that furniture is like fashion, you can change on a trend and lifetime commitment is not necessary Hire mix of backgrounds & personalities Promote diversity & infuse new ideas

Positive Negative Consequences Hiring a diverse work staff Adapting to the American style led to Further expansion within the U.S Possible joint ventures Beat out competition Ex. Wal-Mart, Ashley’s & Rooms to Go Hiring a diverse work staff Fresh innovative ideas Met changes in new markets Hiring a diverse work staff Lack of goal congruence Distraction from the common goals Waste of resources getting a diverse group to agree to a common viewpoint

References http://www.youtube.com/watch?v=KKA98_vKs8A Germany Warehouse http://www.ikea.com/ms/en_US/pdf/yearly_summary/Welcome_inside_2011.pdf Welcome Inside 2011 Catalog http://www.ikea.com/ms/en_US/about_ikea/the_ikea_way/history/index.html History of IKEA