Taylor Drake
IKEA
IKEA was a company founded by a man named Ingvar Kamprad in 1943 at the
young age of 17. Starting out his business with just fish, Christmas magazines, and seeds
from his family farm, he then advanced to buying a lot of 100-box matches wholesale and
selling them individually at a higher markup. He then added ballpoint pins to his product
line then just 5 years later he Kamprad added his first line of furniture right before his
first magazine publication in 1949. As his company grew from just a few pieces of
furniture to the thousands they sell in the stores today, Kamprad was faced over and over
with the decision on how to keep the IKEA as a company that would value the consumers
budget and style. The biggest problem that IKEA faced was finding the right
manufacturers to produce the furniture at a low cost.
The major advantage to the problem that Kamprad faced was the solution he was
going to get. As much as it may sound as a disadvantage to the company, many retailers
in Sweden talked other manufactures into not selling to Kamprad and his company. This
led to two major advantages in including producing more in-house designs and finding
the manufacturer in Poland that would produce his products as much as 50% less than
other furniture made in Sweden. This then allowed for Kamprad to cut his prices again.
Another advantage IKEA had came from the Allt i Hemmet, a Swedish published
magazine. In the magazine was a published article about IKEA and the quality of its
furniture. Allt i Hemmet published a test of quality measuring the price to quality ratio of
IKEA furniture verses other furniture sold in other Swedish manufacturers. It ran in this
magazine that IKEA not only had low prices that were some heavy competition for the
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competitors, but that they had just as good quality furniture and were as much as 65
percent less in price than four other surrounding stores. This gave IKEA a huge boost in
sales and trust with their customers after seeing the media take such a liking to the
company especially after 800,000 IKEA catalogs had just been mailed out to Swedish
homes.
When approached in 1957 about the organizational structure of IKEA, Kamprad
replied they viewed the workers and the company as an extended family. “Love” is the
key ingredient to pulling a employees together for hard work. Working, vacationing,
drinking, and talking about IKEA their lives were engulfed in this business. That is what
made it work out from the beginning. This was a major advantage to the start of IKEA;
workers who actually cared about the goals and success of the company.
