IKEA Case Study
The founder of IKEA, Ingvar Kamprad, established the IKEA brand in Sweden when he was only 17 years old. It was 1943, and the IKEA brand started its enterprise journey by selling items such as seeds from Kamprad’s family’s farm and Christmas magazines. By 1948, the IKEA furniture line came to life. Kamprad’s concept was “good furniture could be priced so that the man with that flat wallet would make a place for it in his spending and could afford it” (Hill, 2013). Today, IKEA is one of the world’s largest furniture retailers. This essay will discuss the legal, cultural, and ethical challenges that confront IKEA; determine the various roles that the host …show more content…
In 1982, Kamprad transferred his interest in IKEA, “to a Dutchbased charitable foundation, Stichting Ingka Foundation. This is a tax-exempt, nonprofit entity that in turn owns Ingka Holding, a private Dutch firm that is the legal owner of IKEA” (Hill, 2013). To escape the Swedish high taxes, Kamprad moved to Switzerland in the 1980’s, which is where he remains.
Strategic and Operational Challenges Young, middle-class consumers are the target market for the IKEA product line. Global managers faced several strategic and operational challenges. IKEA set up locations so that consumers could come to visit and see what their furniture looked like assembled. This method became and important sales tactic to them. They added car roof racks to their product line so that customers could purchase products while there and transport it home loaded on top, packaged flat. As IKEA branched out internationally, they realized that their product line would need to be offered to fit the need of consumers in different countries. For American consumers, IKEA’s European-style products were not the standard sizes that Americans were used to. “American sheets did not fit on IKEA beds. Sofas were not big enough, wardrobe drawers were not deep enough, glasses were too small, curtains too short, and kitchens did not fit U.S. size appliances” (Hill, 2013). IKEA redesigned products to fit American’s needs. To help with the cost with both