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LAGUNA COLLEGE OF BUSINESS AND ARTSSCHOOL OF COLLEGE STUDIESDEPARTMENT OF BUSINESSRETAIL MANAGEMENT (MM 307)ACTIVITY 3.1Name:Section:Date:Case:IKEAProfile, History and Status QuoFounded by Ingvar Kamprad in 1943, IKEA has gone on to become the world’s largestfurniture retailer, specialising in stylish but inexpensive Scandinavian-designed homefurnishings and furniture. Even today, after more than 70 years of business activity,IKEA is still strongly associated with Kamprad. The name IKEA is an acronym. I and Kare the founder’s initials, E stands forElmtaryd, the name of his parents’ farm, and Astands forAgunnaryd, his hometown in the Southern Swedish province of Småland.Initially selling items such as pens, wallets, jewellery and picture frames, a mail ordercatalogue was established in 1947 to introduce furniture into the product range,which has been the focus since 1951. Due to customer scepticism towards buyingfurniture unseen, Kamprad opened a showroom in the village of Älmhult in 1953,where customers could examine his products before ordering. In 1955, as a result of asupply boycott caused by pressure from competitors, IKEA started designing its ownfurniture. The first flat-pack furniture, now one of IKEA’s trademarks, was invented in1956. In 1958, the first IKEA store was opened in Älmhult, and since then the companyhas expanded steadily. Its first international venture was in 1963, when the first storeoutside Sweden was opened in Oslo, Norway. Today, the company has 361 storesaround the world and a sales volume of almost 30 billion EUR.Even though the company has grown enormously and is today’s only truly globalfurniture retailer, growth rates remain high. The company is active globally, but mostof its stores are still located in Europe. About 70 % of IKEA’s sales are in Europe. The
LAGUNA COLLEGE OF BUSINESS AND ARTSmost important country markets are Germany (about 14 % of IKEA’s sales), the USA(about 12 %), France (about 8 %), Russia and the UK (each about 6 %). Thecompany’s main sourcing markets are China (with about 25 % of procurementvolume) and Poland (about 18 %).IKEA stores around the world.The company has very loyal customers who will travel considerable distances to IKEAstores. Thus, the company benefits not just from behavioral loyalty but from truecommitment from its customers. For example, IKEA is by far the most frequentedfurniture store chain in Germany.IKEA achieves this sales success with a total range of about 12,000 products. Eachstore carries a selection of these 12,000 products depending on store size. The corerange is the same worldwide.Positioning of IKEA as Modern Category SpecialistIKEA’s retail brand is clearly positioned. The company’s official vision is “to create abetter everyday life for the many people”, which is achieved by combining aesthetic

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Term
Fall
Professor
IDK
Tags
ikea family

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