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Ingvar Kamprad And Ikea Essay

1994 words - 8 pages

Ingvar Kamprad has founded the most powerful and the biggest company in furniture branch. Today, IKEA is more than 220 stores in 33 countries and it is being visited by more than 410 milions of customers each year. IKEA has also their own product catalog which is publishing in more than 160 milions copies.Kamprad is one of the most vivid person in the world market, businessman, whose methods are being stand as a paragon by scientists and experts.What caused that small company established by a teenager, on the space of 60 years had transformed into international holding ? IKEA is an example of unlimited thinking, courageous business decisions and philosophy, at grassroots of which always lays ...view middle of the document...

IKEA started to sell furniture later in 50'.IKEA HISTORYIKEA focused on the furniture industry in the 50'. The key to the success was the innovative selling system . It was the catalog to making order from distance. All the products from IKEA it was possible to order using regular mail.Decisions made by Kamprad were all based on his philosophy to offer goods in the lowest possible prices and the highest possible quality. Nowadays, almost 80 years old entrepreneur used to say: "It is not difficult to sell cheap low quality product. The thing is to produce a high quality product in a cheap way".In 1953, customers were able to see on their own eyes and get sure about the IKEA products quality. Kamprad opened a very first show room in which there was a possibility to see and touch products before buying them, but still, they were unable to buy goods there.The extreme pursuit to keep the prices on the lowest possible level almost buried the firm in the most important development moment. When IKEA with a huge success was conquering the Swedish market and it was becoming bigger and bigger treat for traditional s furniture companies, it became the enemy number one for all competitors. They started a brutal attack on IKEA.Suppliers were refusing orders, sawmills were delaying supplies and the creditors had no possibilities to cooperate with young company. The consequences were almost devastating.Kamprad once again showed his entrepreneurial brilliance and business courage. Problem means new opportunities. Maybe it was the moment when he first said his favorite sentence. His eyes was directed to closed behind the Iron Curtain Poland. He found there a cheap labour force and high quality production.The main problem though, was the transportation cost. And then was the time when IKEA came out with furniture to self final assemble. Packing ready products in parts to the flat carton boxes cut the transportation cost in 80 percent. Kamprad won once again and the prices were about 30-50% lower than in the competitors.In the middle of 60' the first IKEA store was opened, and the floor space was about 7,000 square meters. Under the giant building in Stockholm there was white billboard with red letters. After few years the primary colors was changed to blue and yellow, according to the Swedish flag.IKEA IN ASIAA milestone in history of the firm was the expansion on the Chinese market. IKEA appeared on this market, in 1998 , as the luxurious western brand. Quickly however the strategy was changed and the Swedish firm began to be perceived as the cheap store of stylish furniture. New strategy demanded savings, because prices of products decline in about 30% in relation to average price-list in the most of shops, and over 50% productions is originating now from the Chinese market.The change quickly repaid. Although prices of products grew fairly 10% a year, the sale grew about 35% and grows. Only in the last year the shop in Shanghai revved up about 28%. Every weekend...

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