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DEVELOPING NEW BUSINESS IDEAS54

Non-traditional production sources included ski manufacturers, from
whom spare capacity was bought on extremely economical terms to
make tables, and a shirt manufacturer whose spare capacity was bought
to make cushion covers. IKEA made use of a supermarket trolley
manufacturer’s knowledge of strength and stability when designing its
‘Moment’ sofa in 1985.

IKEA challenged convention in its choice of raw materials: in the 1960s,
the company led the trend to replace teak with less costly oak materials,
and in the 1970s it championed acceptance of inexpensive pinewood
furniture.

Cost control was paramount – company mythology relates the stories
of Kamprad driving around a city at night in order to find an
appropriately economical hotel and preventing a senior executive from
flying first-class to an important meeting. IKEA’s value statement,
Testament of a Furniture Dealer, which Kamprad wrote in 1976 to
communicate the IKEA vision within an increasingly dispersed
organisation, stressed that ‘expensive solutions . . . are often signs of
mediocrity. We have no interest in a solution until we know what it costs’.
The company website promotes the IKEA value of ‘finding simple
solutions, scrimping and saving in every direction. Except on ideas’.

The IKEA retail experience was standardised with a strict conformance
to a tight specification, whether it applied to in-store displays, the traffic
flow, which maximised customers’ exposure to products by taking them
through a four-leafed clover pattern, or in-store facilities.

Unlike traditional furniture retailers who relied heavily on in-store sales
as a key promotion tool, Kamprad followed an aggressive and
unconventional marketing strategy to pull customers into the stores,
where displays, catalogues and good layout combined into highly cost-
effective ‘silent salesmen’. Advertisements consistently positioned IKEA
as a non-conformist within the industry.

New store openings were rolled out with military-style precision, with
three distinct waves of activity: a ‘construction’ phase to establish the
new store, a ‘build-up’ team to ready the staff and operations for
opening, and an ‘operations’ phase which would kick in around one year
after store opening. Where innovations in individual stores such as in-
store cafés and supervised play areas for children were successful, they
were progressively implemented across the retail network.