IKEA: Scandinavian Style
IKEA is a Dutch company, which has branches in several countries around the world, selling flat-box storage of furnitures, accessories, bathroom and kitchen products and other goods. “As of January 2008, the company is the world’s largest furniture retailer. ”[i] IKEA is the pioneer in designing and selling ready-to-assemble furniture, and it is founded in 1943 by Ingvar Kamprad at the age of 17. “In addition, the firm is known for its attention to cost control, operational details, and continuous product development, corporate attributes that allowed IKEA to lower its prices by an average of two to three percent over the decade to 2010 during a period of global expansion.”[ii] In some customers’ mind, IKEA is not only suppose to be the fashion and creative designer, but also an attitude to lifestyle. The main issue for IKEA is that they fail to gather sufficient information before they decide to go into different cultural areas. In this case, IKEA have become the world known brand, due to its efforts in strengthening and tying consumer family.
However, IKEA have to face lots of challenges. One aspect is the loosening of the company’s core, due to IKEA’s global expansion. “They detected a loosening of the company’s strict core values, established more than half a century ago and reinforced in the training of co-workers in the IKEA Way.”[iii] At the beginning years, IKEA needs strict core values to create brand and corporate culture. With the process of global expansion, Kamprad’s idea “little bit of Sweden” may somehow limits strong growth in some particular location of non-Swedes, due to the cultural nuance. IKEA’s strategy is focusing on standardization rather than adapting to cultural differences in many cases. These cultural nuance had led to set blockers for IKEA’s global expansion in America and Asia. For instance, “In the U.S. market, IKEA was slow to make allowances,such as a shift from measuring in meters to feet and inches. While consumers embraced low pricing and the convenience of break-down furniture, the company’s delay in bed size designation to the familiar king, queen, and twin drove U. S. customers bonkers because ‘160 centimeters’ meant nothing to them.”[iv] In order to penetrate global markets, IKEA have to shift. IKEA should change the management structures in other countries whose culture is different from Scandinavian.
The management style which could suit Sweden and Europe does not mean it suits every country. The management style should change a little bit to adapt to the new environment. First of all, IKEA should focus on adaption when they are penetrating foreign markets. IKEA did excellent in Europe, they tied with customer family very well. However, when IKEA go for sharing overseas markets, there might be less capacity for them to obtain professional growth using traditional method. It is better for IKEA to establish an international cultural department which could gather cultural nuance and analysis. The purpose of this department is to help other departments to manage diversities and make better strategies relying on acknowledging cultural differences. Knowing what customers’ needs is the key for sharing markets. Second, IKEA should keep their competitive advantages in the field of designing and innovation. IKEA is somehow suffering from a lack of creations these years, due to less fresh blood in this organization. IKEA’s hiring policy limits the capacity of innovation. IKEA should emphasize diversity when they are hiring designers. For instance, a better method to deal with innovation could be gathering designs from customers, as well as hire professional designers. Some ideas provided by customers may be as excellent as designers’.
On the other hand, the products designed by customers could meet customers’ needs, however, this is requiring some surveys. Using customers’ ideas could also help IKEA to gain their customers’ loyalty and create a vision which could be added to IKEA’s core values. Third, IKEA could do some efforts in going green. IKEA is a corporation which providing furnitures with a low price. The raw materials should be recycling and green. IKEA could go far by Eco-Friendly technologies used in designing products. The core value of IKEA is “creating a better everyday life for the majority of people”, in order to meet current changes, advocating thrift should be updated to Green lifestyle. This may lead to higher costs of IKEA production. However, as a world brand, IKEA have to pay more attention to social responsibilities. The long-term benefits will balance the increasing in cost.
[i] Zuvela, Maja. “IKEA mulls joint venture with Bosnia furniture maker.” REUTERS. http://www.reuters.com/article/2008/01/08/idUSL0861625720080108. [ii] Global Players: Ingvar Kamprad, Founder and Chief Advisor, IKEA”. Thomaswhite.com. [iii] Daft, Richard L. Organization Theory & Design. 11th ed. Mason: South-Western,Cengage Learning, 2013. Page 580
[iv] Daft, Richard L. Organization Theory & Design. 11th ed. Mason: South-Western,Cengage Learning, 2013. Page 581