IKEA. Success and Problems of a Swedish Concept

Manja Ledderhos

• Publisher: GRIN Verlag
• Year: 2003
• eBook ISBN: 9783638176507
• Edition: 0
• Topic: Business
• Subtopic: Business General
• Index: Business

Seminar paper from the year 2003 in the subject Business economics - General, grade: very good, Mälardalen University (Institution of Economics), course: Strategies and the New Economy, language: English, abstract: 1.1. Background InformationIKEA is a well known Swedish company where almost every European person under 30 haspurchased something from to decorate their flats. In only a few decades the company "wentfrom the woods of southern Sweden to 31 countries around the world"1 and has become alarge Multinational cooperation (MNC) with an interorganisational network.2 Higher tariffs, transport costs and the loss of economies of scale in domestic production further encourageproduction abroad.3 The Swedish market is comparably small and IKEA had to expand inorder to keep their steady growth rates. The success came as a surprise to many since thefurniture business is originally a local business.4 IKEA is the only company in their field, thathas been able to expand so widely. The company seems to offer something that is unique topeople and that appeals to them as something preferable. The background of the companyseems to play a role in managing this uniqueness where Swedish influence on leadership, corporate culture and product offer leads towards the successful "IKEA spirit".While the internationalisation of IKEA is one of the reasons for their great success, it seemsthat it is also the source of trouble. It seems that today's "game of global strategy [is]increasingly … a game of coordination"5. The difficulties that IKEA faces is to keep theirunique "IKEA spirit" and still be successful around the world.1.2. Aim of the PaperThe aim of the paper is to look at the sources for IKEAs success where special emphasis willbe given to the Swedish impact on leadership, corporate culture and product offer and thesuccess they have with it. Internationalisation puts challenges on the above success areas andthose need to be evaluated, as well.1.3. DelimitationsIKEA is a very complex company and I couldn't concentrate on all of the given information.For example, I did not write about the purchasing network and relationships to suppliers.Also, customer contacts are not dealt with in depth.1 http://www.IKEA.com/about_IKEA/timeline/splash.asp, (21.02.03).2 Forgens/Holm/Thilenius (1997). p.477.3 Buckley/ Casson (1998). p. 555.4 Grol/Schoch (1998), p.