IKEA Case Study
Case Study 3 - IKEA
Introduction and Background
IKEA was established in 1943 by Ingvar Kamprad at the age of 17. His entrepreneurial nous has led to an integrated design, production and distribution network spanning 53 countries. Kamprad created a lifestyle model that mould consumer habits and attitudes. The purpose of the company was to provide fine-looking, quality furniture to the masses which Kamprad went about via the internal culture of the company. IKEA’s attention to detail can be described as a variety of strategies that link management and co-workers at all levels to their customers.
Major Issues and Problems
The company’s rapid global expansion and the rise of imitators in providing affordable, quality home furnishings has led some critics to believe IKEA had abandoned its maverick methods and relinquished its innovative edge. Detected is a loosening of the company’s strict core values and reinforcement through training. The focus on standardization rather than adaption into non EU markets poses a problem for industry giants such as IKEA. Addressing cultural differences, preferences and product specifications can be critical to the success of the company when entering markets such as China and the U.S. Co-worker issues have arisen with discrepancies between American employees and their Swedish counterparts in terms of pay, holidays and managerial demands.
Relevant Theories
IKEA should continue to form International strategic alliances with its suppliers in order to increase efficiency. Like other companies looking to be a global player, there comes challenges. These may include; complexity and differentiation, need for coordination and transfer of knowledge and innovation. With effective collaboration, IKEA will see; cost savings, better decision making, greater revenue and increased innovation.
Suggestions and Recommendations
The issues IKEA face are related globalization and adapting to differing cultures and values. The case alluded
Introduction and Background
IKEA was established in 1943 by Ingvar Kamprad at the age of 17. His entrepreneurial nous has led to an integrated design, production and distribution network spanning 53 countries. Kamprad created a lifestyle model that mould consumer habits and attitudes. The purpose of the company was to provide fine-looking, quality furniture to the masses which Kamprad went about via the internal culture of the company. IKEA’s attention to detail can be described as a variety of strategies that link management and co-workers at all levels to their customers.
Major Issues and Problems
The company’s rapid global expansion and the rise of imitators in providing affordable, quality home furnishings has led some critics to believe IKEA had abandoned its maverick methods and relinquished its innovative edge. Detected is a loosening of the company’s strict core values and reinforcement through training. The focus on standardization rather than adaption into non EU markets poses a problem for industry giants such as IKEA. Addressing cultural differences, preferences and product specifications can be critical to the success of the company when entering markets such as China and the U.S. Co-worker issues have arisen with discrepancies between American employees and their Swedish counterparts in terms of pay, holidays and managerial demands.
Relevant Theories
IKEA should continue to form International strategic alliances with its suppliers in order to increase efficiency. Like other companies looking to be a global player, there comes challenges. These may include; complexity and differentiation, need for coordination and transfer of knowledge and innovation. With effective collaboration, IKEA will see; cost savings, better decision making, greater revenue and increased innovation.
Suggestions and Recommendations
The issues IKEA face are related globalization and adapting to differing cultures and values. The case alluded
References: Daft, R. L. (2010). Organization theory and design. Cengage learning. Baraldi, E. (2008). Strategy in industrial networks: experiences from IKEA. California Management Review, 50(4), 99-126.