Strategic Business Analysis: Ingvar Kamprad And IKEA

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Ingvar Kamprad and IKEA IKEA’s story really began in 1943 when its founder Ingvar Kampard began his career by selling fish, Christmas magazines, and seeds at the age of 17. A few years after that, he established a mail order business that featured diverse products that included furniture (Bartlett & Nanda, 1990). The economy in Sweden was changing (thanks to the war) and the traditional practice of handing down custom made furniture was being replaced with purchasing new inexpensive furniture. Demand was growing but complex business associations between Swedish manufacturers and retailers kept prices high and prevented entry into the industry (Bartlett & Nanda, 1990). Kampard saw a great opportunity to correct what he felt was a social problem …show more content…

The company offered over 20,000 products through 44 million catalogs written in 12 languages. The company’s unique management philosophy contributed to its extraordinary growth and expansion. Kampard managed the company with a vision, “To create a better everyday life for the majority of people”. He focused on the human aspect of business seemingly motivated not only by profit but by people’s quality of life (Bartlett & Nanda, 1990). The following is a strategic business analysis of Ikea that will examine how its founder developed the company, the role of expansion in the company’s success, and the company’s future …show more content…

Careful planning for new market entry paved the way for IKEA’s rapid growth into other countries. To facilitate its expansion, IKEA was reorganized into four geographical regions; however, the purchasing, distribution, and design functions were centrally controlled. Senior management was Scandinavian and followed a simple people oriented philosophy. Armed with a strong management team, Kamprad purchased a failing IKEA franchise in Canada making it profitable in only three years. The venture into the largest furniture market in the world, the U.S., was part of IKEA’s Canadian operation. Before the stores even opened, the company was challenged by imitator stores like Stor that opened in California. The retailer copied IKEA’s concepts so exactly that IKEA had to bring legal action against them. By 1989, IKEA stores opened in Philadelphia, Washington, Baltimore, and Pittsburgh with several more scheduled to open in by 1992 (Bartlett & Nanda,

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