Page 4 - The Way the IKEA manages the Global Environment

furnishing products at prices so low that as many people as possible will be able to afford them. Like the other

organizations it has several strengths and weaknesses. (Mishra, 2017) Those are

-Flat-pack technology
-Numerous global suppliers

-Focus on “low price with meaning”
-Extra in-store perks: restaurants, shopping carts, pencils, etc.

-Unique store environment

-Modern design pieces as well as traditional pieces
And with these strengths the limitations were:

-Not doing appropriate market research when branching into a new culture’s market-such as when IKEA came to

America.
-Ratio of sales representatives to consumers

IKEA’s self-service ethos, American’s are not used to this type of service.

IKEA’s vision has from the start been “To create a better everyday life for the majority of people”. Kea’s business
concept originates in the decision to meet a need that no other company appeared concerned with and led it to

develop a niche market: manufacturing beautiful, inexpensive and durable furniture for the majority of people. I.

Kamprad states that IKEA should “stand on the side of the majority of people, which involves taking on more
responsibility than might at first seem to be the case”. A recent example is the company’s exceptionally costly

move into the Russian market but considered necessary as affordable furniture is a pressing need for the Russian
population. The democratic design also involves representing the interests of ordinary people and getting rid of

designs, which are difficult and expensive to produce, even if it is easy to sell. The concept was formalized in
1976 in Ingvar Kamprad’s thesis “Testament of a Furniture Dealer”, which became an important way to spread

the IKEA philosophy. The fundamental goal was and is to provide affordable furniture for the people and cost

cutting is key to achieving this. Cost-consciousness is a strong part of the business idea and the waste of resources
is considered a “mortal sin at IKEA”. By ensuring that ordinary people are able to afford to furnish their homes

beautifully, many associate IKEA with a company that stands on the side of the “little person” and this is a positive
image for a company to have. In addition to this, I. Kamprad had another dream: the “dream of good capitalism”

which is the idea that the good in a profit-making business can be combined with a lasting social vision. This

implies the goal of developing and achieving a better future for IKEA’s customers as well as people working for
IKEA believing that by working for IKEA, they are working for a better society and thereby contributing to a

better world. (Wang, 2018)

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