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Charles Estuya

on 15 December 2015

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Transcript of IKEA CASE STUDY


Analyse IKEA's cultural web. Does the cultural web of IKEA support it's current strategy? Recommend cultural and corporate strategy changes for Ikea.
IKEA Values
-Leading by example
-Desire for innovation
-Cost consciousness
-Dare to be different

IKEA strategy
Bowman's Strategy clock
*Cost leadership
*Hybrid’ strategy
-Low price

Organisational Cuture
Ikea Case Study
(CWMIFG, 2012)

The Paradigm
Ingvar kamrad's Story:

"The IKEA Concept began when Ingvar Kamprad, an entrepreneur from the Småland
province in southern Sweden, had an innovative idea. In Småland, although the soil is
thin and poor, the people have a reputation for working hard, living frugally and making
the most of limited resources. So when Ingvar started his furniture business in the late
1940s, he applied the lessons he learned in Småland to the home furnishings market"
(Ikea website)

“Maintaining a strong IKEA culture
is one of the most crucial factors behind the
continued success of the IKEA concept”

-Ingvar Kamprad
(IKEA founder)

The sum of values, shared beliefs and
collective behaviour which serves as ‘glue’ to
integrate the members of the organization.
Routines & Rituals
Control systems
Power Structures
The Symbols
Particular activities and events through
which the organisation emphasises
what is particularly important
(CWMIFG, 2012)

- Annual Thank you events
- Employees dress casually

Inverted Pyramid -
customer is put at the forefront
of all of Ikea's decisions.
(costs, design and packaging)
- Informality
- Non Hierarchiral management
- Seemed to favour the swedes...
Non- swedes would have to learn
the language
-Emphasis on a reward system

- Influence on employee behaviour

Scandinavian Heritage
(Kasabov, 2015)

How does IKEA’s culture support
it's current strategy?
Minimising Cost
Flat Packaging
Innovation & Style
(LU, 2014)

- More than 50% of the products are made from sustainable or recycled products

-Buying directly from textile mills

-The firm’s engineers design low-cost, modular furniture ready for assembly by customers.

- "You do your part. We do our part. Together we save money." approach

- Economies of scale , high volume purchases.

Flat packages:
-Reducing transport cost by 80%
-Take up less room in trucks,
-Maximising the number of products that can beshipped.
-Easy to take home
-Trying good quality alternative materials
(leading the trend to replace teak with less expensive oak materials)

Sourcing materials from around the world.
1,002 suppliers in 51 countries

Working Culture
IKEA's prices typically 30-50%
lower than competition.
"we, as co-workers within Ikea, create, develop and move the culture everyday that we come to work"
"It is about moving; we don't need to run faster but to find better ways; smarter ways to do it" (Riley, 2015)
Top 5 Purchasing countries:
China 15%
Sweden 12%
Poland 10%
Germany 6%
Italy 6%
-Employees dressed casually
-Testament of a furniture dealer
-Combines individual qualities with IKEA's working values.
(IKEA website)
(Riley, 2015)
Recommended Cultral
and corporate strategy.
Customizable furniture.
-Allow the customers to choose the colours, fabric that they want to be used in their orders.
-Furniture for people with disabilities.
-Beds that measure the person's weight.

Mergers & Acquisition
(AUDRA, 2013)

Niche Markets

- Acquire other companies who have
managed to cut costs lower than Ikea.

'targets a narrow group of consumers with a product or service designed specifically to meet their needs' (Richards, 2015)

(Mihai, 2008)

*What is Culture?
*IKEA's Paradigm
*IKEA's Values
*IKEA's Strategy
*Does IKEA's Culture support it's strategies?
*Recommendations for cultural strategies


-The IKEA Culture exists in every part of the company, from design, sourcing, packing and distributing through to our business model.

-IKEA Values:
-Adapting to customer needs.

-Cost leadership strategy

-Customers get involved in many ways - assembling flat-pack products
(WOOD, 2014)

Aresu, C., 2013. IKEA: more than low prices. [Online]
Available at: http://thebusinesstrategy.blogspot.co.uk/2013/03/ikea-more-than-low-prices.html
[Accessed 19 November 2015].

AUDRA, 2013. [Online]
Available at: http://www.myfirstapartment.com/2013/11/dollar-for-dollar-furnishing-your-apartment-at-ikea-vs-target-vs-pottery-barn/
[Accessed 18 Nov 2015].

CWMIFG, 2012. What is the Cultural Web?. [Online]
Available at: http://www.innovationforgrowth.co.uk/Blog/what-is-the-cultural-web/
[Accessed 2015].

Kasabov, E., 2015. [Online]
Available at: http://www.palgrave-journals.com/dddmp/journal/v11/n1/images/dddmp200919f1.jpg
[Accessed 17 Nov 2015].

LU, C., 2014. IKEA’s inventory management strategy: how does IKEA do it?. [Online]
Available at: https://www.tradegecko.com/blog/ikeas-inventory-management-strategy-ikea
[Accessed 18 November 2015].

Mihai, 2008. IKEA Spring 2008 Catalog. [Online]
Available at: http://freshome.com/2008/02/10/ikea-spring-2008-catalog/
[Accessed 18 November 2015].

Richards, L., 2015. Examples of Corporate Business Strategies. [Online]
Available at: http://smallbusiness.chron.com/examples-corporate-business-strategies-4755.html
[Accessed 28 Nov 2015].

Riley, J., 2015. Ikea's Distinctive and Positive Organisational Culture. [Online]
Available at: http://www.tutor2u.net/business/blog/would-you-fit-into-the-organisational-culture-at-ikea
[Accessed 20 November 2015].

WOOD, J., 2014. [Online]
Available at: http://www.dailymail.co.uk/femail/article-2720315/Lookalikes-cheaper-IKEA-For-years-s-place-budget-homeware-not-more.html
[Accessed 23 November 2015].

by Charles Estuya
"Provided Ikea UK exceeds year-on-year sales growth of 10%, full-time workers who have been with the group for at least five years will receive an added lump sum of around £500 deposited into their pension pots in September." (Browne,2014)
Cost leadership
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