Ikea Story
IKEA’s root lie in Sweden, where founder Ingvar Kamgrad grew up. Since he was a kid, he knew that he wanted to develop a business on his own. By age 17, Kamprad formed IKEA by using the money that his father gave him as a gift for succeeding in his studies. IKEA was just a company which sold the basic household goods at the discounted prices, but by 1951, Kamprad made a decision to focus only on low-priced furniture.
He was operating a mail order furniture catalog under the name IKEA. The business grew, but it had a limitation because customers rarely bought furniture sight unseen. Therefore, in 1953 Kamprad opened the first showroom in Almhult. The business went well but because of pressure from the competition, IKEA was boycotted by the supplier. So, in 1955 IKEA began to design its own furniture.
The new cash-and-carry model freed IKEA and its customer from having to arrange delivery. Furthermore, flat packaging reduced transportation costs. In 1965, IKEA opened its first suburban location in Stockholm. Despite the changing concept, the core mission “selling stylish furniture at low prices” still remained the same. IKEA maintained by using its size to exert bargaining power over suppliers.
After the great success in home country, IKEA expanded further into Europe and then the US. The chain opened its first US store in Philadelphia in 1985. Even though Americans were delighted by low prices, IKEA still faced a big obstacle with regard to consumer preferences. In order to please the American market, IKEA had to make some adjustments (eg. size of products), but the company’s hallmark “the distinctly Scandinavian design” still remained constant. Apart from providing the customers the low price with meaningful products, the company also facilitates its customer’s experiences by providing plenty of parking space, restaurants, and childcare facilities.
