Ingvar Kamprad, a young Swede, finished his studies in 1943 and went on to establish a small company, which he called IKEA. The acronym IKEA (Ingvar Kamprad Elmtaryd Agunnaryd) is composed of the initials of his name, the name of his parents' farm and the name of his village. Initially, he focused only on the sale of commercial articles like pens, picture frames, tablecloth, jewelry, leather and nylon stockings.
In 1947, the IKEA range of products included furniture for the first time. It was not until 1951 that the company decided to sell only IKEA furniture. During IKEA's first exhibition of furniture in 1953, the customers could see and touch the furniture before ordering. This made them realize a few great things about IKEA furniture. They realized that IKEA offered functional, aesthetic and cheap furniture.
IKEA began manufacturing its own furniture from 1955, and it was during this period that the "flat pack" was invented. This allowed the customer to transport goods to his destination, after exiting the store. In 1958, IKEA opened its first store spanning 6700m2 in Sweden Almhult .
Then , IKEA opened two other stores in Norway and Stockholm in 1963 and 1965 respectively. The expansion of the brand was happening at a feverish pace, with many stores being established in many countries in a short span of time. Ingvar Kamprad was keen to create a group whose structure and organization ensures independence and long-term security.
The IKEA Group is owned by a foundation, Stichting INGKA, based in the Netherlands. The foundation owns INGKA Holding BV, which is none other than the parent company's industrial group Swedwood.
Inter IKEA Systems BV is the owner of the concept and brand IKEA. It holds franchise agreements with all IKEA stores worldwide.
IKEA is a family company that has always excluded the use of the stock exchange system. The holding company prefers to raise most money from countries where it makes a profit to reinvest in those countries where it wants to grow.
Market Analysis:
The furniture industry has changed significantly in recent years because of globalization that has resulted in the influx of low cost products, changes in consumer behavior, changing distribution strategies and development of online trading. To meet new consumer expectations, the furniture industry has had to adapt to its new environment. The products and styles such as furniture complements, building kits and fitted kitchens have multiplied.
Globally, the furniture trade has almost doubled since 1994 to rise to $ 62 million in 2001. It is now worth more than the bulk of revenues realized by apparel, footwear, publishing, cosmetics or perfume trade. Today the furniture industry has nearly 137,000 businesses worldwide with a turnover of nearly EUR 110 million. In 2003, the sector hired 1.3 million people.
In the European market, Ikea is the undisputed leader in furniture sales except in France where Conforama is still fighting to keep its first place. But Ikea is likely to dislodge this heavyweight in a few years with more emphasis on the U.S. market and the Asian market.
Tags: IKEA (Ingvar Kamprad Elmtaryd Agunnaryd), market analysis of the furniture sector, Strategy of the Ikea group
[...] The policy of the firm is to seek aesthetics and functionality. For this reason, it works with suppliers that produce functional and aesthetic products at the lowest possible prices. And they must meet the requirements of Ikea code of conduct (IWAY). Ikea focuses its product policy on proximity with suppliers and the fact that the products manufactured are the same everywhere. The objective here is to bring together quality, environmental protection, working conditions, aesthetics and functionality. Regarding the range of political, Ikea offers a range of functional products, unique design and low price. [...]
[...] The human resources function The Ikea group employs 90000 employees in 44 countries. The goal of the group is to improve the lives of the greatest number, this obviously applies to employees of the firm. The firm therefore offers them a number of particularly favorable benefits. The working time is estimated to average 40 hours per week. The working time is annualized to allow employees to organize their working time and holidays. You can work part time and this is true for executive positions. [...]
[...] The SWOT analysis therefore is whether the combination of the strengths and weaknesses of the company is able to cope with environmental changes, or if it is possible to identify or create potential opportunities would better leverage the unique resources or core competencies of the company. This analysis is useful to the company so they can focus on key issues. Key questions such as "what are my main strengths and weaknesses in relation to the existing competition? what are the main dangers of the market? Through this analysis, the company must make good decisions to anticipate adverse impacts. With this diagnosis, we can see that the IKEA Group is particularly interested in the stages of life of people and bases its strategy on that. [...]
[...] We can add decorative furnishing stores such as Pier Import Casa and who know a great success right now by the enthusiasm of the French for the interior design, but also by their differentiated positioning in relation to furniture stores. The good surprise comes also craftsmen who contrary to what you might think are not too affected by the supermarkets. On the contrary, they become subcontractors of the latter, which explains the increase of of their turnover in 2006. Their custom activity is also a determining factor in their performance. Boosted by the healthy segment padded seat, lounges specialists are well again. Finally, hypermarkets were up by the multiplication of promotional operations. [...]
[...] Still remains a drawback, the group is still not a market leader. We have 13 real forces and 7 opportunities. But we also see 2 weaknesses and constraints 5 / threats that need to be faced. Strengths/Forces : Weaknesses/Faiblesses : Difficulty getting people back who Products: have already been clients. Wealth of ranges Different Styles - It does not affect all populations. Price / Good design - Second on the market Adaptation to life stages Cost control (ie major) - Standardized mark Policy ( Landscaping: Restaurants with kids meals - Culture too developed business Playgrounds at the entrance with activities - Restricted Communication Tools Labyrinth Stores Implementation Strategy ( Marketing: Numerous measures put in place to attract customers Designers Teams of specialists that detect needs Path in stores that lead to the purchase Opportunities/Opportunités : Threats / Threats: Developing furniture market - Competitors are developing the same Strong international demand strategy Supplier Diversity - Diversification of activities Low direct competition - Competitive Pressure Attracts also the elderly - Provides different competing stores Furniture multifunctionality - Market down Branding Group The division into two distinct environments allows better visibility and above all a confrontation between both strengths and weaknesses and between opportunities and threats. [...]
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