About the company
IKEA is a Swedish company registered in the Netherlands that designs and sells ready-to-assemble furniture, appliances and home accessories. As of January 2008, the company is the world’s largest furniture retailer. Founded in Sweden in 1943 by 17-year-old Ingvar Kamprad, who was listed as one of the world’s richest people in 2013, the company’s name is an acronym that consists of the initials of, Ingvar Kamprad, Elmtaryd (the farm where he grew up), and Agunnaryd (his hometown in Småland, south Sweden).
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The company is known for its modern architectural designs for various types of appliances and furniture, and its interior design work is often associated with eco-friendly simplicity. In addition, the firm is known for its attention to cost control, operational details, and continuous product development, corporate attributes that allowed IKEA to lower its prices by an average of two to three percent over the decade to 2010 during a period of global expansion.
IKEA is about much more than just products. It is about offering inspiration, home furnishing knowledge, new products and solutions people can relate to. Always at low prices. IKEA home furnishing gives people access to affordable solutions that solve their needs and improve everyday life at home. Simply put, IKEA home furnishing makes it possible to turn dreams into reality and create homes to love living in.
A culture of hearts
The IKEA culture is hard to describe but easy to embrace. It’s a culture of enthusiasm, togetherness and willpower, born from our roots in southern Sweden and inspired by the IKEA founder, Ingvar Kamprad. The IKEA culture humbly unites us in our work to create a better everyday life for the many people. It’s not an easy task – and maybe that’s why we and all other IKEA co-workers are so dedicated and so stubborn. We all share the same conviction that many, not few, shall be able to create the home they want and dream of. And when you put your heart into your work, it’s then you really can make a difference. Over 150,000 people are involved in the creation of a better everyday life for the many people. Business plans ”Maintaining a strong IKEA
and expansion ideas are great motivators to work hard. But there is no culture is one of the most crucial
substitute for the feeling of actually contributing to something bigger. factors behind the continued
success of the IKEA Concept”
The IKEA values
Values cannot be invented – they can only emerge from one place: the heart. IKEA values are very much a product of our origin. Hard work, tough challenges, common sense, Swedish roots and limited resources have formed IKEA values. To keep the IKEA Concept successful, we work to keep our values close to our heart. The IKEA values convey the essence of the entire IKEA culture. Over the years we’ve learned that acting according to IKEA values not only brings us together – no matter what age, race or part of the world we live in – it helps us do business successfully.
The IKEA product range
Developing IKEA products can take place almost anywhere around the world – on a factory floor in Asia or on the drawing board in Älmhult, Sweden. And everybody involved works together to create a product range that is simple, easy to live with and affordable. Good design should be available for the many, not the few. That’s why all IKEA designers design every IKEA product starting with a functional need and a price. Then they use their creativity and knowledge and use low-cost raw materials and manufacturing processes to create functional products. Then large volumes are purchased to push prices down even further.
Most IKEA products are also designed to be transported in flat packs and assembled at the customer’s home. This also lowers the price by minimizing transportation and storage costs. By doing all this, the IKEA Concept uses design to make sure that IKEA products can be bought and enjoyed by as many people as possible. IKEA designers constantly seek new ways to improve people’s lives – without emptying their wallets. But how can good design and function be combined with good quality, all at a low price? It starts with focusing on what’s important. Will an expensive finish on the back of a shelf or under a table-top improve the function? Of course not. So IKEA designers do not do it, because a product is of no use to the many people if it is not affordable. Low prices with meaning
Low prices are only valuable if they offer good function, quality and design. IKEA product development teams constantly ask themselves – does this product contribute to a better everyday life? Does it have a good, sustainable design? Is the function and quality suited for everyday life? And most crucial – is the price low enough to make this product accessible to many, not just the few?
Touch. Try. Explore. Dream!
The IKEA store is our meeting place. It is where the IKEA product range comes to life. Visitors can compare styles and prices and get inspired by realistic room settings. They are welcome to sit, lie down, open and close drawers and cabinets, and pretend to cook, sleep or watch TV. The IKEA store is designed to meet many people looking for something for their homes. It’s also a place where you actually can go from inspiration to involvement by getting inspiration from solutions in the store, searching, finding and choosing the products needed, picking them up, buying them, bringing them home, putting them together and enjoying them the same day. All the IKEA products in the store are supported by price and product information that makes it easy for visitors to serve themselves. Customer involvement contributes to low prices.
An invitation for the whole year
With hundreds of pages of ideas, inspiration, solutions and products, the IKEA catalogue shows how the IKEA product range contributes to a better everyday life. It is filled with solutions that answer people’s dreams and needs, it is also complemented with digital content that gives users a richer experience and provides more in-depth home furnishing knowledge. Still, it shows only part of what is offered in IKEA stores.
Improve and develop the IKEA Concept
The IKEA Concept is a living concept. We develop and improve it together with IKEA retailers and other contributors. Together we work to stay in the forefront of global trends and changes in retailing. We listen to the needs based on real-life shop floor experience to get better insight into what the many people need in order to improve their life at home. All this helps us to ensure that the IKEA Concept remains successful in an ever-changing world.
We constantly monitor how the IKEA Concept is implemented in every market to ensure it is creating the maximum impact. Monitoring helps us to understand the different challenges facing IKEA. This could range from market conditions to cultural factors affecting shopping behavior. Through monitoring we can find ways to improve the IKEA Concept and how it meets the many people. IKEA retailers share their experiences, knowledge, innovation and ideas. This helps the IKEA Concept to be a living and dynamic concept that continuously develops and expands. The key is working together.
Online know-how, Publications, Training programmes
We offer an online resource for IKEA know-how that includes solutions, news, training programmes, publications and much more. We provide manuals and guidelines for all parts of the business and specific know-how areas. We also publish a magazine for IKEA retailers filled with tips, tools and proven solutions from all over the IKEA world. We offer a range of training programmes for many aspects of the business.
We conduct regular market research and provide IKEA retailers with reports and tools that help them improve their business. For example, we measure how well IKEA retailers have positioned the IKEA Brand in each market and how satisfied customers are with their latest store visit. We also conduct research that helps find ways to improve the IKEA product range, the IKEA catalogue and the IKEA website. And we gather and analyze insight into macro-economic factors and the competitive situation.
The IKEA Concept Center
We believe in learning by doing. We operate the IKEA Concept Center in Delft, the Netherlands, where shopping, learning, testing and supporting all come together. The idea is to give IKEA retailers the chance to learn about the IKEA Concept and its recent updates and benefit from all the competence of specialists in a hands-on environment. For most visitors, the main attraction of the IKEA Concept Center is the IKEA store. Like all IKEA stores in the world it offers inspiring solutions, low prices, tasty food and shopping that is fun and enjoyable.
The IKEA Concept Center is also home to specialists who, in co-operation with the IKEA retailers, find and identify good ideas and solutions. New solutions are developed, documented and analyzed from a conceptual viewpoint. We provide systematic transfer of IKEA know-how. And communicate proven solutions to all IKEA retailers, so that each and every one can benefit from these in their business. Together, we work to keep the IKEA Concept successful. We offer more than 50 different training programmes and workshops to IKEA managers and specialists at the IKEA College. In addition, many training programmes are offered locally or as elearning programs. Every year thousands of students are educated on how to use proven systems, methods and solutions to maximize the possibilities of the IKEA Concept.
Just as all IKEA products are tested to ensure quality and to find ways to improve, we are always interested in improving the living IKEA Concept. We test lots of new and innovative ideas at the IKEA Concept Center. These could be ideas suggested by IKEA retailers or ones that we come up with ourselves. When we find solutions that work well we make the part of the IKEA Concept and document and describe them so that all IKEA retailers benefit.
2013 was exciting for IKEA retailing
In a tough climate IKEA retailing continued to grow and expand. Retail sales ended at EUR 29.2 billion for the full year. The business climate in Europe continued to be challenging for IKEA retailers, while we see improvements in North America, Asia Pacific and the Middle East. As many developed economies strive to balance economics and social well being, we see that uncertainties will continue to dictate the business climate for some time. This affects people’s lives and living conditions and therefore we believe that the IKEA Concept is more needed than ever. The IKEA Concept gives everyone the possibility to improve their life at home IKEA products are becoming more accessible. This is about offering a wide range of good home furnishing products at low prices. It is about providing more and better services. And it is about creating a positive shopping experience in IKEA stores and online. Nine new IKEA stores opened, two of which are in new markets: Lithuania and Qatar. There are also continued
You do your part.
We do our part.
improvements in sustainability efforts in various aspects of the IKEA Concept. One example is that by 2016, all the lighting sold at IKEA stores will be LED. The IKEA product range aims to help the many people live a more sustainable life at home, with solutions to help save energy, water and reduce waste.
Most things remain to be done
The first IKEA business was founded in 1943 and the IKEA Brand celebrated 70 years during 2013. Today more than 150,000 co-workers are working through-out the IKEA world. We saw more than 770 million visits to the IKEA stores and 1.2 billion visits to IKEA websites in the past year. Still we are just at the beginning. IKEA retailing is small in most markets and does not exist in others. People’s needs for good home furnishing products at low prices are bigger than ever and the IKEA Concept will continue to contribute to a better life at home for the many people. A July 2013 media report speculated that IKEA is the world’s largest consumer of wood after a finding that the company uses 1% of the Earth’s wood supply. As of January 2014, IKEA owns and operates 349 stores in 43 countries.
The Balanced Scorecard
IKEA’s value proposition is operational excellence because all IKEA designers design every IKEA product starting with a functional need and a price. Then they use their creativity and knowledge and use low-cost raw materials and manufacturing processes to create functional products. Then large volumes are purchased to push prices down even further.
IKEA’s mission is to create a better everyday life for the many people, 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. It’s about creating homes to love.
Critical success factors
-grow and expand
-enhance customer value
-improve cost structure
-low cost product solutions
-real life experience stores
-rich content catalogs
Internal Business Processes
-minimizing storage and transportation costs
-market research reports
Learning and Growth
-culture of hearts
– e-learning programmes, training programmes and workshops
-sharing experience, ideas, innovations, knowledge and know-how -market research reports