Ikea Case Study Analyst

IKEA Case Study Analyst

Heydi Wiley

MGT 448

October 6, 2014

Kenneth Cromer

Ikea Case Study Analyst

        IKEA is a company that started in Sweden in 1943, the owner Ingvar Kamprad started the furniture to his product line in 1948. Ingvar always wanted to provide furniture that was affordable to everyone. In Europe most of the people did not buy furniture they usually inhered from family because furniture was expensive. IKEA has been able to grow in the past 70 years, in a big way. “In total, by 2008 there were 285 IKEA stores in 36 countries and territories, and the company had plans to continue opening between 20 to 25 stores a year for the foreseeable future.” (University of Phoenix, 2014, pg 5, para 3)

        IKEA was able to grow in Europe faster than they were able to expand in the United States. When IKEA brought their product to the US they did not do the necessary research to change the product that would appeal to the US market. The main cultural difference was that they ran into companies that already offer cheap furniture, which was one of the main selling points for IKEA in Europe. The design was not standardize to the expectations of the US, so the company had its growing pains when it came to the people of the US to understand the product since cheaper product in the US is usually related to poor quality.

        IKEA did not face too many legal challenges. Because the company was set up 1943 where several countries in Europe that were still communist so once the communist government collapse in Eastern Europe, IKEA was able to integrate manufacturing. IKEA was able to grow in manufacturing by purchasing new technology to continue manufacturing, because the company ran into issues with the new bosses that wanted to get out of the contracts. Also expanding their manufacturing to other countries like China and Vietnam were great decision because they were able to build their contracts with those countries to expand their supply.