To many people IKEA is one of the most noteworthy Swedish success stories, to some it the largest furniture retailer of the world and to few, it is a company that sells a Scandinavian lifestyle that customers around the world truly embrace.
From a small town company, IKEA slowly became regional and a global giant. It started by selling pen, watches, wallets and ended up selling each and everything a household requires - furniture, appliance, small motor vehicles, and home accessories. In the process, it created a success story that cannot be replicated.
Ingvar Kamprad, the founder of IKEA, learnt how to bridge over the difficulties with strong willpower and perseverance from his grandmother. His grandfather committed suicide after failing to pay the mortgage as their family business went on the verge of bankruptcy. That’s when his grandmother had to step in.
The IKEA founder showed good trading skills from the age of seven when he started selling Christmas decorations, fish and pencils in his neighborhood. He continued selling one thing or the other throughout his school years. After passing high school, his father gave him money to go to college but he decided to use it to start his business. Ingvar Kamprad faced difficulties in the route to become successful but he faced it with techniques taught by his grandmother. He died in 2018 as one of the richest men of the world.
IKEA became Swedish and Scandinavian pride not for any single reason. A set of right business strategies and effective decisions taken in the right moment made it what it is today. The company at the moment has 208,000 workers worldwide at 422 stores in more than 50 countries across the globe.
IKEA targeted the middle class as its segment with the assumption that this is the largest segment of the society. This simple yet ever right segmentation worked in home country Sweden, regionally and globally. IKEA feels committed in offering good quality products within the range of middle classes’ purchasing power. Founder Ingvar Kamprad once said, his philosophy is: It is better to sell 600 chairs at a lower price than sell 60 chairs at a high price. The company is a master in understanding a customer’s lifestyle and in widening customer base by keeping the old customers intact and attracting new ones. To ensure that, it puts efforts continuously on lowering costs. For cost effectiveness purpose, it implemented self service- no sales people cost, manufactures all products in own factories - no third party involvement and offers products in a flat package – lesser cost on shipment, storage and assembling. This is termed as customer centric marketing in modern marketing but IKEA is doing it since the 1960s.
Newspaper ad was the most effective advertisement method of that time, IKEA was no exemption in using it. But in 1951, Ingvar Kamprad realised he had more contents than what traditional newspapers could make space for. He concentrated on making mail order booklets which later became catalogs. He used to distribute booklets via the country milk van. By 2006, IKEA catalog was published in 24 languages for 32 countries. In terms of publishing quantity, IKEA catalogs at a point exceed Bible as the world’s most published work. Bible however remains leader as the most purchased work; where else IKEA catalogs are free of charge.
After targeting the right segment, producing attractive designs in affordable price, reaching the consumers with attractive catalogs, Ingvar Kamprad, being an excellent marketer, played another master stroke. In the mid 1950s, he noticed a car boom in Sweden and people’s willingness to go shopping to distant areas along with the fact that people like to self-assemble cabinets and sofas if the assembling process is simple. He wanted to capitalize it and started selling roof racks for cars at a reduced price. This out of the box policy saw the company’s turnover doubled in one year.
Once IKEA achieved success in Sweden and reached all of its target market, it had to explore overseas markets. European companies become regional from local quickly because their neighbors are seated close by. In 1963, IKEA started expansion with Norway. By 1973, IKEA reached Netherlands and Switzerland. Then reached Australia and USA and became a global company. IKEA however likes to brand itself as a Swedish company with Blue and yellow in its logo, representing Swedish national colors.
-Wasim Subhan Choudhury
September 2019
Information sources:
IKEA Factsand Figures 2018
Ingvar Kamprad Biography: Success Story of IKEA Founder
IKEA, A success story.
INGVAR KAMPRAD, FOUNDER OF IKEA
IKEA - YouTube
From a small town company, IKEA slowly became regional and a global giant. It started by selling pen, watches, wallets and ended up selling each and everything a household requires - furniture, appliance, small motor vehicles, and home accessories. In the process, it created a success story that cannot be replicated.
Ingvar Kamprad, the founder of IKEA, learnt how to bridge over the difficulties with strong willpower and perseverance from his grandmother. His grandfather committed suicide after failing to pay the mortgage as their family business went on the verge of bankruptcy. That’s when his grandmother had to step in.
The IKEA founder showed good trading skills from the age of seven when he started selling Christmas decorations, fish and pencils in his neighborhood. He continued selling one thing or the other throughout his school years. After passing high school, his father gave him money to go to college but he decided to use it to start his business. Ingvar Kamprad faced difficulties in the route to become successful but he faced it with techniques taught by his grandmother. He died in 2018 as one of the richest men of the world.
IKEA became Swedish and Scandinavian pride not for any single reason. A set of right business strategies and effective decisions taken in the right moment made it what it is today. The company at the moment has 208,000 workers worldwide at 422 stores in more than 50 countries across the globe.
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| An IKEA outlet |
IKEA targeted the middle class as its segment with the assumption that this is the largest segment of the society. This simple yet ever right segmentation worked in home country Sweden, regionally and globally. IKEA feels committed in offering good quality products within the range of middle classes’ purchasing power. Founder Ingvar Kamprad once said, his philosophy is: It is better to sell 600 chairs at a lower price than sell 60 chairs at a high price. The company is a master in understanding a customer’s lifestyle and in widening customer base by keeping the old customers intact and attracting new ones. To ensure that, it puts efforts continuously on lowering costs. For cost effectiveness purpose, it implemented self service- no sales people cost, manufactures all products in own factories - no third party involvement and offers products in a flat package – lesser cost on shipment, storage and assembling. This is termed as customer centric marketing in modern marketing but IKEA is doing it since the 1960s.
Newspaper ad was the most effective advertisement method of that time, IKEA was no exemption in using it. But in 1951, Ingvar Kamprad realised he had more contents than what traditional newspapers could make space for. He concentrated on making mail order booklets which later became catalogs. He used to distribute booklets via the country milk van. By 2006, IKEA catalog was published in 24 languages for 32 countries. In terms of publishing quantity, IKEA catalogs at a point exceed Bible as the world’s most published work. Bible however remains leader as the most purchased work; where else IKEA catalogs are free of charge.
After targeting the right segment, producing attractive designs in affordable price, reaching the consumers with attractive catalogs, Ingvar Kamprad, being an excellent marketer, played another master stroke. In the mid 1950s, he noticed a car boom in Sweden and people’s willingness to go shopping to distant areas along with the fact that people like to self-assemble cabinets and sofas if the assembling process is simple. He wanted to capitalize it and started selling roof racks for cars at a reduced price. This out of the box policy saw the company’s turnover doubled in one year.
Once IKEA achieved success in Sweden and reached all of its target market, it had to explore overseas markets. European companies become regional from local quickly because their neighbors are seated close by. In 1963, IKEA started expansion with Norway. By 1973, IKEA reached Netherlands and Switzerland. Then reached Australia and USA and became a global company. IKEA however likes to brand itself as a Swedish company with Blue and yellow in its logo, representing Swedish national colors.
-Wasim Subhan Choudhury
September 2019
Information sources:
IKEA Factsand Figures 2018
Ingvar Kamprad Biography: Success Story of IKEA Founder
IKEA, A success story.
INGVAR KAMPRAD, FOUNDER OF IKEA
IKEA - YouTube
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