Copy of History

INTRODUCTION

HISTORY

• Multinational Company (Global)

• Designs and sells furniture, appliances, accessories

• Operating in 1940's, Sweden

• Largest furniture retailer in 2008

A history lies behind every single firm, corporation, company, factories etc.

• Founder - Ingvar Kampred (Born in the 1920's)

• Ingvar Kampred Elmtaryd Agunnaryd - I.K.E.A (1940's)

• IKEA advertisements went local (1950's)

• First IKEA store in Norway and Denmark (1960's)

• Continuous expansion in the 1970's - 1980's

• Stores opened in the US (Early 1980's)

• Stores opened in Hungary, Poland, China, Spain, Czech (1990's)

• Stores opened in Russia and Japan (2000's)

Relationship with suppliers

What is Global Management?

Group 2

Global management refers to the way an organization manages its business internationally,

including its sales, marketing, hiring and finance practices

- IKEA has quickly evolved from a local Swedish home furnishing manufacturer

- Partly by convincing their customer

- Executed their strategy by building worldwide sourcing network

- Mobilize suppliers and customer

- Customers are clearly informed

- Furnish the customer with good quality products at a low cost

- Find suppliers that can deliver high quality items at low cost per unit

- The headquarters provides carefully selected

Global Management - China

The China expansion came at a cost.

Since 1999, IKEA has been working on becoming more eco-friendly

IKEA did well to adapt in China, although it took numerous changes to its strategies and more than years for the company to become profitable in the Asian nation.

One of the main problems for IKEA was that its prices

considered low in Europe and North America, were higher than the average in China.

IKEA built a number of factories in China and increased local sourcing of materials

In 1998, IKEA started its retail operations in China a joint venture

Chinese apartments were small and customers required functional, modular solutions

The company made slight modifications to its furniture to meet local needs

IKEA had faced similar problems

- the United States

- tried to replicate its existing business model and products

- American customers, for instance, demanded bigger beds and bigger closets.

- make a number of changes to its marketing strategy in the US. The

challenges it faced in China, however, were far bigger than the ones in the US.

Consumers/Customers

Strategic Management

Introduction to Business and Management

Higher organizational performance

Requires managers examine and adapt to business environmental changes

Coordinates divers organizational units

- Helping them to focus on organizational goals

Workforce

Group Members:

Strategic Management - SWOT

AIM:

GOAL:

Strength:

• Customer knowledge
• Constantly using innovations to drive cost down
• Supply chain integration
• Brand reputation and market presence
• Diversified product portfolio

Strategic Management - SWOT

The business philosophy of IKEA can be best described by four goals.

To create a highly efficient sales department.

Providing ideas for home furnishing.

To serve the costumers as well as they are served by a home furnishing shop.

Giving people the idea that shopping at IKEA is a day out for the whole family.

Weakness:

Opportunities:

Workforce

IKEA (IKEA, 2011)

Selling a wide range of furniture and accessories

Reasonable price so that most people can buy them

Offering a wide range of assortment the key word is functionality

Consumers can find everything under one roof

• Further expansion in developing economies
• Growing online sales
• Expansion to growing grocery market

Threats:

Ali Farman, (Arman) - 20000030

Kui Hoi Lam - 18130163

Li Chi Lap - 18120294

Ng Ming Yan - 18130163

• Negative publicity
• Decreasing quality
• Standard products

• Intensifying competition
• Growth of average consumer income

Porter's Six Forces Model Analysis for IKEA

Threat of new

entrant

Power of Relative

stakeholders

Threat of substitutes

product & services

Rivalry among

existing foms

Bargaining power

of suppliers

Bargaining Power

of Buyers

At IKEA we are an equal opportunity employer and we embrace everyone’s contribution

Our differences are what make IKEA great

Diversity at IKEA

Of the 808 employees, 57% are females including 52% in leadership roles.

Why does cultural diversity matter?

- Diversity means valuing and including people from every culture and religion, and appreciating their differences.

- At IKEA's in Hong Kong has co-workers originating from 10 different countries speaking over 15 languages.

- Diversity is one of the greatest strengths, enabling the company to bring the best talent and ideas together to GROW IKEA together.

The IKEA vision is to create a better everyday life for the many people.

Working with disabilities

• For People

To tell the truth. IKEA has an impulse to tell everyone what they want to hear. The wise tell everyone the same unvarnished story. Once you develop a reputation for straight talk, people will return the favor.

Admit your mistakes. This gives everyone around you permission to do the same.

- As a business, IKEA recognize the need to capitalize on the skills and talents of all segments of the diverse community.

- Where needed, we have provided accommodations – a modified workplace, specialist equipment or tools – to ensure disabilities are able to realize their potential

- Disabilities have an average tenure of 3.3 years, 40% have transferred to different areas or been promoted.

• For Environment

Why the Focus on Diversity?

It is all about respect in the workplace, being proud of our differences.

And living our values; togetherness and passion, constantly on the way.

Knowing that the differences are what make IKEA great

People:

The IKEA Foundation

• Children benefiting from IKEA Foundation
• UNICEF and Save The Children
• Promotes education - Women/Girl
• Strengthen children's rights
• Prevention of child labor
• Ensure education is provided

People:

Soft toys fund projects

• Africa
• Asia
• Central and Eastern Europe

General Constraints

- The workforce.

- IKEA does not have its own factories.

- Low cost countries.

- Very bad publicity for the company.

- For example as the Swedish television showed a documentary about children working for IKEA carpets, the company finished the contract directly, but the damage lasted.

Environment:

- IKEA concept is easy to adopt.

- Many competitors have taken over the cheap furniture.

- As IKEA sells nearly the same products all over the world, they are more dependent on the image of their new Scandinavian design

To be sustainable

WOOD:

WOOD:

Sustainable sources - recycled wood and wood from forests certified by the FSC - increased to 32.4% from 22.6% in 2013.

• Climate and Energy
• Wood
• Cotton
• Waste

COTTON:

• Partner with organisations like the Better Cotton Initiative (BCI) and WWF

WASTE:

Recycling

Lightbulbs, Batteries

CONCLUSION

• Development, experience and advancement

• Positive working environment

• Simplistic | Trendy - Key strategy

• "Without failure, there won't be success"

Bibliography

• Corportation, IKEA. "People & Planet - IKEA." IKEA /US/EN. IKEA Corportation, 23 Apr. 2014. Web. 5 Nov. 2014. <http://www.ikea.com/ms/en_US/this-is-ikea/people-and-planet/index.html>.

• Allen, Scott. "Entrepreneurs You Should Know: Ingvar Kamprad of IKEA." Ingvar Kamprad - IKEA Founder and One of the World's Richest Men. Department Of Management, 9 Feb. 2014. Web. 6 Nov. 2014. <http://entrepreneurs.about.com/cs/famousentrepreneur

• Corporation, IKEA. "Democratic Design - IKEA." IKEA /HK/EN. IKEA Corporation, 8 Mar. 2013. Web. 6 Nov. 2014. <http://www.ikea.com/ms/en_HK/about-the-ikea-group/democratic-design/>.

• Corporation, IKEA. "The IKEA Story." Sustainability and TQE. IKEA Corporation, 8 Mar. 2013. Web. 6 Nov. 2014. <http://www.ikea.com/ms/en_US/the_ikea_story

• Al Hammadi, Sarah. "IKEA: Leadership Leads to Product Innovation and Globalization Human Resource Management." Academia.edu. International Business School, 1 Jan. 2014. Web. 6 Nov. 2014. <http://www.academia.edu/5276306/IKEA_Leadership