Page 1: Introduction
“Once upon a time, a long, long time ago we decided that, instead of making furniture for people with fat wallets, we would side with the majority of people instead and offer them a better everyday life. We decided to offer a wide range of home furnishing items of good design and function, at prices so low the majority of people could afford to buy them.” Ingvar Kamprad.
Many successful businesses stem from one simple good idea. Someone with a bit more vision than average spots a gap in the market. He or she notices that existing producers are failing to provide the benefits that consumers are really looking for.
This case study focuses on a particularly successful business idea which resulted in the foundation of IKEA, one of the largest home furnishing companies in the world. It examines IKEA’s vision/mission statements and considers how consumer needs can be met. In many ways, IKEA was a forerunner in pioneering concepts which are becoming increasingly important in modern business. These include:
- ethical business practice
- providing a fair deal for and being led by consumer needs
- empowering employees, so that they feel a part of the company
- responsibility to the community in which the company operates and to the wider community.
IKEA started in Sweden over 50 years ago with one man’s vision. Ingvar Kamprad, the founder of IKEA, asked the questions:
- Why are nice homes only possible for people with a lot of money?
- Why shouldn’t everybody be able to afford a nice, functional home?
- Why does furniture have to be so expensive?
- Why is there no one offering a wide range of home furnishing articles of good form and function at prices so low that the many people can afford them?
Ingvar Kamprad wanted to help create a better everyday life for the people in the area of Sweden where he lived. He was brought up in a farming community where ordinary people were struggling to make a living out of stony fields and limited resources. Nothing could be taken for granted and survival meant hard work, ingenuity and working together. Ingvar Kamprad’s desire to help ordinary people founded the basis of a strong company culture which has helped to make IKEA so successful. It is not surprising that IKEA comes from Sweden - a country which has long been famous for the way in which it cares for its citizens. In a recent IKEA publication, Democratic Design, the concept of giving everyone the same opportunity in life is set out in the following way:
“..everyone who has grown up in Sweden has learnt - either from their Dad, or from society in general - people who are not all that well off should still be given the same opportunities as people who are. It’s hardly surprising that, as a Swedish company, IKEA espouses Swedish values.”