Ikea Global Renovation

IKEA’s Global Renovation (Case Study)

Introduction

IKEA is well-known as a multinational company for its designs and sells knock-down furniture and home accessories such as inside and outside furniture, kitchen cabinets and appliances, bedding and others. From January 2008, IKEA become the largest furniture retailer in the world. Established in Sweden in 1943 by Ingvar Kamprad who is 17-years old back then. The company name is an abbreviation formed made up of the initials of Ingvar Kamprad, Elmtaryd and Agunnaryd (his name, the farm he grew up and his hometown in Smaland, southern Sweden respectively). The firm is acknowledged for their assorted types of contemporary architectural patterns for home appliances and furniture. Besides, any interior design work of IKEA usually used and correlated with unity and ecology. In addition, over the decade till 2010, in global expansion period, the firm focused on controlling the cost, details of operational and continuous development of products which enable IKEA to lower in average of two to three per cent of their prices. In the Netherlands, Luxembourg and Liechtenstein, there are several foundations based on those countries that controlled the IKEA Group complex corporate structure.

It reported that IKEA had owned and operated 351 stores in 46 different countries on December 2014 and sold US $ 23.1 billion worth of goods in the 2010 fiscal year. That mean, it represented a total increase of 7.7 percent from 2009. The IKEA’s website is the closest full range of IKEA representation which contains about 12,000 of products and there were more than 470 million visitors from September 2007 to September 2008. Because of the firm is one of the major users of timber in the retail sector, so it is responsible for about 1% of wood consumption worldwide commercial product.

Background

Founded by Ingvar Kamprad in 1943, IKEA started as a company that sells mostly by correspondence, and then five years later, he started selling furniture. In 1958, the first outlet Möbel-IKEA operated in Älmhult, Småland. Meanwhile, the first outlet were operated out of Sweden are in Norway and Denmark in 1963 and 1969 respectively. In 1973 IKEA opened the first outlet outside Scandinavian. The store opened in Switzerland, followed by West Germany in 1974 which mean IKEA’s stores are spread to other parts of Europe in 1970’s.

Amidst a high level of success, in 1973, instead of opening a store in Koblenz, Western German Company’s administrations unwittingly opened an outlet in Constanta. Later that decade, IKEA started to spread their market to other parts of the world. IKEA opened their store in Japan, Australia and Hong Kong, Canada and Singapore in 1974, 1975, 1976 and 1978 respectively. Farther expansion of IKEA in 1980's, the firm opened more stores in others different countries such as Spain, France, Belgium, USA, United Kingdom, Italy, Poland and more countries in 1990 and 2000. The United States is one of the largest market of IKEA with 40 stores after Germany. With 44 operated stores in the countries, Germany become the largest market of IKEA. The IKEA organization managed 267 outlets in 25 states at the end of the 2009 fiscal year. On 17th February 2010, the first Latin America’s IKEA store opened in Santo Domingo, Dominican Republic. The firm remain minimal in developing countries presence as of July 2013.