History of Ikea
Strategic Management Project
History of IKEA
Ingvar Kamprad founded IKEA in 1943. The name IKEA is formed from Kamprad’s initials (I.K.) plus the first letters of Elmtaryd (E) and Agunnaryd (A), the farm and village where he grew up (1). IKEA originally sold pens, wallets, picture frames, table runners, watches, and jewelry and nylon stockings. Known today for its furniture, IKEA did not start furniture sales until 1948. Kamprad saw opportunities for selling furniture on a large scale, distributing the first catalogue in 1951. In 1955, in the midst of a fierce price war with a competitor, Kamprad took his company a step further by opening the first store showroom. The concept behind this was that customers could now touch and look at IKEA home furnishings before they purchased, showing that quality did not have to be sacrificed for lower prices. With this being a success, Kamprad opened the first store in Almhult, Sweden in 1958. At its opening, the 6,700-meter store was the largest home furnishings store in Scandinavia (1).
Kamprad retired as IKEA Group’s president in 1986, with Anders Moberg becoming his successor. This brought about many other changes for IKEA. Starting in 1990, IKEA took interest in corporate social responsibility (1). The IKEA Group developed an environmental policy that would ensure the company and its co-workers take environmental responsibility for all activities conducted within its business. Since then, they have become more energy efficient by generating their own renewable energy. They also work with their suppliers to inspire them to do the same. One example of this is each of their facilities is fully equipped with solar panels on the roof. They also take into consideration where and how they get their raw materials. Raw materials most important to the business and those that have the highest potential environmental or social impact are wood, cotton, palm oil, leather and food (3). Taking wood, they are continually looking for
History of IKEA
Ingvar Kamprad founded IKEA in 1943. The name IKEA is formed from Kamprad’s initials (I.K.) plus the first letters of Elmtaryd (E) and Agunnaryd (A), the farm and village where he grew up (1). IKEA originally sold pens, wallets, picture frames, table runners, watches, and jewelry and nylon stockings. Known today for its furniture, IKEA did not start furniture sales until 1948. Kamprad saw opportunities for selling furniture on a large scale, distributing the first catalogue in 1951. In 1955, in the midst of a fierce price war with a competitor, Kamprad took his company a step further by opening the first store showroom. The concept behind this was that customers could now touch and look at IKEA home furnishings before they purchased, showing that quality did not have to be sacrificed for lower prices. With this being a success, Kamprad opened the first store in Almhult, Sweden in 1958. At its opening, the 6,700-meter store was the largest home furnishings store in Scandinavia (1).
Kamprad retired as IKEA Group’s president in 1986, with Anders Moberg becoming his successor. This brought about many other changes for IKEA. Starting in 1990, IKEA took interest in corporate social responsibility (1). The IKEA Group developed an environmental policy that would ensure the company and its co-workers take environmental responsibility for all activities conducted within its business. Since then, they have become more energy efficient by generating their own renewable energy. They also work with their suppliers to inspire them to do the same. One example of this is each of their facilities is fully equipped with solar panels on the roof. They also take into consideration where and how they get their raw materials. Raw materials most important to the business and those that have the highest potential environmental or social impact are wood, cotton, palm oil, leather and food (3). Taking wood, they are continually looking for
Cited: 1. "About IKEA." History. N.p., n.d. Web. 10 Feb. 2013. 2. "Facts &Figures." Inter IKEA Systems B.V. N.p., Oct. 2012. Web. 16 Feb. 2013. 3. Canada, Newswire. "IKEA Group releases 2011 Sustainability Report." Canada Newswire 15 Feb. 2012: Regional Business News. Web. 16 Feb. 2013. 4. Grol, Paul, Christopher Schoch, and Michel Roger. "Culture as a Competitive Advantage." Efbl.org. N.p., 16 Dec. 2010. Web. 13 Feb. 2013. 5. "IKEA Group SWOT Analysis." IKEA Group SWOT Analysis (2012): 1-8. Business Source Complete. Web. 16 Feb. 2013. 6. Lewis, Elen. "Chapter 2: Ingvar Kamprad: The Grand Designer." GBS: Great IKEA!. 28-45. n.p.: Marshall Cavendish Limited, 2004.Business Source Complete. Web. 16 Feb. 2013. 7. "The IKEAConcept." Inter IKEA Systems B.V. N.p., Oct. 2012. Web. 16 Feb. 2013. 8. Kelly, Annie. "IKEA to Go 'forest Positive ' – but Serious Challenges Lie Ahead." The Guardian. Guardian News and Media, 14 Dec. 2012. Web. 16 Feb. 2013. 9. "WantChinaTimes.com." WantChinaTimes.com. N.p., n.d. Web. 16 Feb. 2013.