IKEA

Strategic Management for IKEA

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Introduction

IKEA was founded as a general trading company in Sweden in 1943 by Ingvar Kamprad. Founded in Sweden, IKEA has grown to be the world's largest furniture retailer, specializing in flat-pack kits to be assembled at home. KEA has diversified into several businesses including restaurant. IKEA is also renowned for its prominent efforts to reduce its environmental impact and increase the social good generated throughout its supply chains. Although IKEA has certainly been reactive to wider trends and demands, many argue that responsibility has been at the core of IKEA's operation throughout its history.

Sources of IKEA's Successful Entry

To understand the philosophy with which IKEA was being established was its self-sufficiency and understanding towards delivering quality goods and products to its customers. Even with its current expansion and development, with which the company had been established, IKEA remains consistent with its goals, mission, values and targets that it pertains to achieve in the many years to come. In addition to the above, IKEA has also managed to deliver new and improved quality furniture items to both its current and potential clients, although the company had been also previously providing household goods, but in the year 1951, efforts were limited and concentrated to only furniture items and commodities (Boudreaux, 1984).

One another effort that made IKEA a rather booming sensation in the overall global market was the introduction of the concept 'flat pack approach'. The concept imbibed upon individual effort that the client would put into assembling the item or commodity at their place, which reduced the actual cost of transportation for IKEA, contributing towards their savings and simultaneously creating a natural, flourishing bonding between the client and the commodity purchased at IKEA. The flat pack tool took a life of its own and became the most important source of IKEA's experience in the year 1956, making room for more

IKEA's Internationalization: Importance, Challenges, and Successes

One must understand that if any company wishes to intend and expand its competencies and survive in the overall market, it must maintain strong connections with the external environment. In the case of IKEA, the basic objective for the company was to enter untouched, new markets, penetrate to more and more customers, achieve a cost advantage and simultaneously increase IKEA effectiveness and efficiency (such as staying rigidly loyal and steadfast upon the mission and objectives of IKEA) and finally, to diversify the Operation risk (business risk) by expanding to different geographical boundaries, catering to a broad spectrum of current and potential customers (Joshi, 2005).

Cost effectiveness is one of the basic ways to compete, and IKEA is doing it by introducing the concept of self-service restaurant. A self-service restaurant allows IKEA to reduce their operating cost and at the same time build a competitive advantage against their customer. One might argue that this competitive advantage might not be the sustainable one but according to different management GURU's “No Advantage is sustainable”. By reducing their cost, IKEA is ...