The History Of IKEA

IKEA was found by Ingvar Kamprad from a small mail-order company to the world’s largest furniture retailer. He adhered the vision of “creating a better life for the many people” and the strategy of cost-leadership at all time. Kamprad kept the lowest price with great design for consumers by cutting cost in daily management, like their self-assembled furniture, which can save transport and storage costs. Also, IKEA used international outsourcing to focus more on customers’ service, such as playroom for children, a low-priced restaurant, and a “Sweden Shop” for groceries to attract market. The interesting one is their shopping strategy which maximized consumers’ exposure to the product range. Kamprad’s personal values and beliefs influenced IKEA’s norms and culture. He said “the true IKEA spirit is founded on our enthusiasm, our constant will to renew, on our cost-consciousness, on our willingness to assume responsibility and to help, on our humbleness before the task, and on the simplicity of our behavior.” As IKEA’s continuing development and success, what followed are some problems and crisis.
In the late 1950s, IKEA met the first crisis was opposition from Sweden’s large furniture retailers. They even pressured

In 1995, IKEA’s brand reputation was attacked because of child labor again. A German TV station broadcast an investigative report, Rangan Exports, one of IKEA’s major supplier of India rugs who already signed contract about forbidding the use of child labor, used child labor in the production of rugs made in India for IKEA. And the TV documentary invited IKEA’s representative to take part in a live discussion about child labor. This event happened after IKEA dealing with the child labor in Pakistan, so it strongly influenced brand’s image. Barner needed to decide whether accept the invitation from TV show and how to solve the child labor problem