Ikea 's Continuing Development And Success

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IKEA was found by Ingvar Kamprad from a small mail-order company to the world’s largest furniture retailer. He adhered the vision of “creating a better life for the many people” and the strategy of cost-leadership at all time. Kamprad kept the lowest price with great design for consumers by cutting cost in daily management, like their self-assembled furniture, which can save transport and storage costs. Also, IKEA used international outsourcing to focus more on customers’ service, such as playroom for children, a low-priced restaurant, and a “Sweden Shop” for groceries to attract market. The interesting one is their shopping strategy which maximized consumers’ exposure to the product range. Kamprad’s personal values and beliefs influenced IKEA’s norms and culture. He said “the true IKEA spirit is founded on our enthusiasm, our constant will to renew, on our cost-consciousness, on our willingness to assume responsibility and to help, on our humbleness before the task, and on the simplicity of our behavior.” As IKEA’s continuing development and success, what followed are some problems and crisis. In the late 1950s, IKEA met the first crisis was opposition from Sweden’s large furniture retailers. They even pressured manufacturers not to sell to IKEA. However, Kamprad transformed this crisis to a new opportunity; he looked abroad and sought for new sources. The company started international outsourcing. They provided technologies for for foreign suppliers and then gained sources with a lower price. But Kamprad wanted long-term business relationship so he also made loans to suppliers at reasonable rates, repayable through future shipments, and used off-season capacity for more productivity. In the early 1980s, an environment consciou... ... middle of paper ... ...forbidding the use of child labor, so they should regard more on appointing third-party agent to monitor suppliers, not only for child labor, and investigate all suppliers at regular intervals to ensure the implementation. Using Rugmark is essential like a symbol on the carpets. Stopping the relationship with Rangan Exports is necessary also due to their violation. But I don’t think IKEA should quit the India totally. There’re many low cost labor in India, not children, that would be a condition for lower price for consumers. So IKEA could find another supplier in India to replace Rangan Exports. Lastly, I think IKEA could provide charity activity to help children, such as building school or library, and donating books and other goods, these activities could show the love to children, help to retrieve the brand’s reputation, and build trust between consumers again.

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