Posted: May 25th, 2022

Ingvar Kamprad and IKEA Case Study

Ingvar Kamprad and IKEA Case Study

On the basis of information provided concerning Ingvar Kamprad and IKEA, the organizational theory underlying IKEA will be identified. Associated behavioral problems with IKEA’s development will also be discussed. Questions were formulated and are addressed in order to more fully delineate IKEA’s organizational strategy and development. Assumptions made will be identified throughout discussions. The questions guiding the discussion are as follows:

What organizational theory served as the basis for IKEA’s successful emergence within the furniture retailing industry in Sweden and internationally?

What strategic management principles are evident within Kamprad’s efforts?

What barriers/behavioral problems existed and how did IKEA overcome them from a strategic perspective?

Organizational Theory

Ingvar Kamprad largely developed and created sustained growth in IKEA through an organizational philosophy based on strategic management. From the earliest days of IKEA, Kamprad displayed a commitment to seeking out and utilizing strategies for responding to the larger environment which he recognized could either inhibit or further facilitate the company’s growth.

Strategic Management Principles

When reviewing some of the principles that have long been associated with strategic management, the assumption that Kamprad largely developed IKEA on the basis of strategic management can be further established. In reviewing Michael Porter’s principles concerning long-term strategies leading to the development of core-competencies, it can be determined that Kamprad clearly followed these premises as he built IKEA. These strategies include:

Achieve overall low-cost leadership in the industry

Market products that are differentiated

Focus on market segments for growth in cost and/or differentiation (Bartol & Martin, 1993).

Following these principles, Kamprad adhered to a cost leadership strategy which placed extensive emphasis on efficiency within the company in order to reduce the overall costs of products delivered to customers. As well, he mixed this strategy with a number of efforts to market products that were differentiated. Overall, his goal was to attract those within the furniture market who had not previously had access or resources to purchase furniture. Kamprad’s emphasis in terms of a cost leadership strategy was to design functional furniture that was easy and inexpensive to build while marketing products that were differentiated by relying on simplicity in catalogue displays as well as retail outlets, utilizing a self-service approach rather than an intensive salesperson approach, and engage in cash and carry practices. Ultimately, cost savings earned by IKEA were passed through to customers in lower prices.

As evidenced within the case information on IKEA, Kamprad also adhered to Porter’s strategy of focusing on market segments for growth in cost and/or differentiation in developing the company’s core competencies. Young and low-to-middle income families represented the market segment which Kamprad was committed to attracting.

As Kamprad had indicated in the early days of the company, he was and remained interested in ensuring that the majority of people had the opportunity to afford quality and functional furniture and home furnishings at affordable prices.

Furthermore, Kamprad’s utilization of strategic management in establishing and sustaining IKEA is evident in the manner in which he incorporated and served as a visionary of cost leadership. This is best demonstrated in consideration of the steps identified by Michael Porter as necessary for applying cost leadership. These steps included:

Create a good product

Draw advantage from many sources

Study the competition

Make cost a part of corporate culture (Bartol & Martin, 1993).

Kamprad established Ikea on and generated his philosophy throughout the company of these principles in number of ways. He maintained his commitment as the company expanded internationally in creating a quality product that was based on efforts to utilize a variety of sources that represented further low cost advantage for the company. He studied the competition and responded by applying low-cost logistics and large simple retail outlets in suburban areas in order to attract IKEA’s targeted market. Through Kamprad’s ongoing efforts to maintain close contact with and control over company operations, he was able to effectively incorporate low cost leadership into the organization’s culture. Simplistic storefronts/buildings, employees in casual dress, and Kamprad’s and other administrator’s ongoing presence in stores fulfilling retail functions came to represent symbols of IKEA’s persistent philosophy and commitment to lost cost leadership. Through an adherence to these strategies, Ikea was successful in demonstrating that cost leadership can represent quality in products, services and growth.

Behavior Problems/Barriers

One of the problems that IKEA has consistently faced is the challenges presented by efforts to expand. From its’ earliest period when efforts were initiated to block the company’s growth in Sweden up until IKEA’s current and ongoing efforts to expand internationally, the company has had to develop new strategies to respond to the problems at hand. Ultimately, IKEA’s organizational structure created on the basis of a philosophy and practice of cost leadership has provided for creative management and enthusiasm amongst all levels of employees. The combination of employee freedom and anti-bureaucratic management fostered by Kamprad has fashioned an environment that is valued by employees and has led to ongoing employee contribution in producing positive results for the company when obstacles emerged. Kamprad consistently encouraged employees to look towards the use of “creative common sense” in alleviating the seeming threats and dangers posed by new environments as the company expanded.

Another challenge faced by IKEA was developing a strategy to continue to deliver low-cost yet high-quality products consistently on an international basis. In response to this problem, IKEA again developed a creative strategy by establishing purchasing offices around the world who focused their attention on identifying potential suppliers. When suppliers were identified, the emphasis remained on controlling and designing for low cost and ease of manufacture. Thus, when necessary, IKEA would actually purchase the manufacturing companies machines, redesign their buildings and implement other processes to increase the production of products that were low cost.

As well, IKEA recognized the potential for the company’s management and operation philosophy to be lost as it continued its’ immense expansion efforts throughout the world. Thus, it developed a strategy for insuring that this did not happen by maintaining a homogenous core management group that was familiar with and knowledgeable of IKEA’s philosophy and practices. Regardless of what country expansion efforts were initiated in, the management remained Scandinavian or those who had brought up and trained throughout the ranks of the company. Management staff served as role models and engaged in efforts to training new employees and regional managers in the IKEA model. Furthermore, Kamprad organized his expansion efforts by developing two separate expansion groups – an expansion group who was sent in to ensure that initial planning and establishment of operations followed the IKEA model, followed by the operations group who served the role of further ensuring that the international stores continued to operate on the premises and values that had made the company successful.

A further challenge is evidenced by questions that have begun to emerge as to whether IKEA will survive the eventual loss of Kamprad and whether IKEA can continue to adhere to models of Scandinavian designed furniture that may not be appealing in some areas of the world.

However, on the basis of the company’s history, it would appear that an ongoing commitment to strategic management will allow the company to continue to adapt to problems and challenges that may emerge as the company continues to grow, even without the presence of Kamprad. IKEA has demonstrated even under a new CEO that it can continue in its’ commitment to provide the world with a much-needed supply of affordable, high-quality furniture. It has continued to seek out new ways of maintaining its emphasis on cost leadership while adhering to those aspects of its retail philosophy that draw customers into stores and facilitates their ease in viewing and purchasing. In spite of the changing environments in which the company has found itself, it would appear and can be assumed that IKEA has been able to maintain those characteristics that aided it in becoming so successful initially and will continue to do so while adapting to the environment in which it finds itself. There is no evidence to suggest that the company has faltered thus far; therefore, it would appear that this is a fairly solid and valid assumption. As well, on the basis of information provided on IKEA, it would appear and can be further assumed that they have been able to respond effectively to changes in demand and trends without losing their commitment to quality and affordability that has long been associated with the IKEA brand name. Again, evidence seems to support this assumption as the company has continued to successfully market its brand throughout the world without changing its commitment to quality and low-cost.

Summary

Strategic management has allowed IKEA to remain successful for well over 50 years. The company has been extensively successful in relying on creative strategies in responding to changes and risks as they have expanded throughout the world. A basic and solid commitment to low-cost leadership has filtered and been thoroughly integrated throughout the company appealing to customers and lending itself to the creation of a working environment which has been long valued by employees and management. As evidence would suggest, it can be validly assumed on the basis of IKEA’s history that the company will continue its ongoing success and effectiveness so long as it remains true and committed to the management philosophy and organizational strategy that have served it well for many years.

References

Bartol K.M. & Martin D. (1993) Management. NY: McGraw- Hill, Inc.

---

Get Professional Assignment Help Cheaply

Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?

Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.

Why Choose Our Academic Writing Service?

• Plagiarism free papers
• Timely delivery
• Any deadline
• Skilled, Experienced Native English Writers
• Subject-relevant academic writer
• Adherence to paper instructions
• Ability to tackle bulk assignments
• Reasonable prices
• 24/7 Customer Support
• Get superb grades consistently

 

Online Academic Help With Different Subjects

Literature

Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.

Finance

Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.

Computer science

Computer science is a tough subject. Fortunately, our computer science experts are up to the match. No need to stress and have sleepless nights. Our academic writers will tackle all your computer science assignments and deliver them on time. Let us handle all your python, java, ruby, JavaScript, php , C+ assignments!

Psychology

While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.

Engineering

Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.

Nursing

In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.

Sociology

Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.

Business

We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!

Statistics

We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.

Law

Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.

What discipline/subjects do you deal in?

We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.

Are your writers competent enough to handle my paper?

Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.

What if I don’t like the paper?

There is a very low likelihood that you won’t like the paper.

Reasons being:

• When assigning your order, we match the paper’s discipline with the writer’s field/specialization. Since all our writers are graduates, we match the paper’s subject with the field the writer studied. For instance, if it’s a nursing paper, only a nursing graduate and writer will handle it. Furthermore, all our writers have academic writing experience and top-notch research skills.
• We have a quality assurance that reviews the paper before it gets to you. As such, we ensure that you get a paper that meets the required standard and will most definitely make the grade.

In the event that you don’t like your paper:

• The writer will revise the paper up to your pleasing. You have unlimited revisions. You simply need to highlight what specifically you don’t like about the paper, and the writer will make the amendments. The paper will be revised until you are satisfied. Revisions are free of charge
• We will have a different writer write the paper from scratch.
• Last resort, if the above does not work, we will refund your money.

Will the professor find out I didn’t write the paper myself?

Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.

What if the paper is plagiarized?

We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.

When will I get my paper?

You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.

Will anyone find out that I used your services?

We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.

How our Assignment  Help Service Works

1.      Place an order

You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.

2.      Pay for the order

Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.

3.      Track the progress

You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.

4.      Download the paper

The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.

PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A PERFECT SCORE!!!

---