Important of Mis
IKEA: Stylish Furnishings at affordable prices
Swedish company IKEA is a mass market producer of cheap and stylish home furnishings that appear to transcend national boundaries. The company was founded in 1943 by Ingvar Kamprada small town handyman from southern Sweden, who devised the company name by combining his initials with the first initials of his farm (Elmtaryd) and the parish (Agunnaryd) where he was raised. Today IKEA’s business mission is clear. In the words of the company founder, “We shall offer a wide range of furnishing items of good design and function, at prices so low that the majority of people can afford to buy them.”
Since expanding internationally in 1973, IKEA’s incremental growth approach to spreading into overseas markets has continued. Today the company is the world’s largest retailer. Now located in more than 25 countries, with over 120 outlets, the company almost tripled its turnover worldwide between 1984 and 1990. Offering affordable and varied furniture is central to IKEA’s strategy. The company maintains its cost advantages by doing what it does best and concentrates on its core business and on the adoption of a long term strategy.
IKEA’s ability to maintain its success across so many markets is impressive. Some studies suggest that one possible reason for this success is that when prices are very competitive, cultural barriers became smaller and it becomes easier to reach a larger percentage of the total furniture buying population. To maintain its low cost base, the company needs to shift volume, which it does by selling broadly the same range of stylish, flat packed Swedish products in all of its stores worldwide.
Price is not the only reason for IKEA’s success. In the design of its stores and products IKEA has done much to appeal to consumers’ underlying reasons for buying. The company understands that shopping is a purposeful activity: people buy in order to make their lives richer. In IKEA’s case,
Swedish company IKEA is a mass market producer of cheap and stylish home furnishings that appear to transcend national boundaries. The company was founded in 1943 by Ingvar Kamprada small town handyman from southern Sweden, who devised the company name by combining his initials with the first initials of his farm (Elmtaryd) and the parish (Agunnaryd) where he was raised. Today IKEA’s business mission is clear. In the words of the company founder, “We shall offer a wide range of furnishing items of good design and function, at prices so low that the majority of people can afford to buy them.”
Since expanding internationally in 1973, IKEA’s incremental growth approach to spreading into overseas markets has continued. Today the company is the world’s largest retailer. Now located in more than 25 countries, with over 120 outlets, the company almost tripled its turnover worldwide between 1984 and 1990. Offering affordable and varied furniture is central to IKEA’s strategy. The company maintains its cost advantages by doing what it does best and concentrates on its core business and on the adoption of a long term strategy.
IKEA’s ability to maintain its success across so many markets is impressive. Some studies suggest that one possible reason for this success is that when prices are very competitive, cultural barriers became smaller and it becomes easier to reach a larger percentage of the total furniture buying population. To maintain its low cost base, the company needs to shift volume, which it does by selling broadly the same range of stylish, flat packed Swedish products in all of its stores worldwide.
Price is not the only reason for IKEA’s success. In the design of its stores and products IKEA has done much to appeal to consumers’ underlying reasons for buying. The company understands that shopping is a purposeful activity: people buy in order to make their lives richer. In IKEA’s case,