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IKEA CASE STUDY
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.
-Leading by example
-Desire for innovation
-Dare to be different
Bowman's Strategy clock
Ikea Case Study
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"
“Maintaining a strong IKEA culture
is one of the most crucial factors behind the
continued success of the IKEA concept”
The sum of values, shared beliefs and
collective behaviour which serves as ‘glue’ to
integrate the members of the organization.
Routines & Rituals
Particular activities and events through
which the organisation emphasises
what is particularly important
- 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)
- Non Hierarchiral management
- Seemed to favour the swedes...
Non- swedes would have to learn
-Emphasis on a reward system
- Influence on employee behaviour
How does IKEA’s culture support
it's current strategy?
Innovation & Style
- 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.
-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
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:
-Employees dressed casually
-Testament of a furniture dealer
-Combines individual qualities with IKEA's working values.
and corporate strategy.
-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
- 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)
*What is Culture?
*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.
-Adapting to customer needs.
-Cost leadership strategy
-Customers get involved in many ways - assembling flat-pack products
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/
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)