BACKGROUND

Our history

IKEA is a home furnishings company founded in Sweden, in 1943, by Ingvar Kamprad, who began by
peddling useful items to neighbours on his bicycle. IKEA believes that home is the most important place
in the world and children its most important people.

Since its inception, the IKEA company vision has been to create a better everyday life for the many
people by offering a wide range of well-designed, functional home furnishings at prices so low that as
many people as possible can afford them.

IKEA believes that home is the most important place in the world and children its most important
people.

The IKEA Foundation is the philanthropic arm of Stichting INGKA Foundation. INGKA Foundation is the
owner of the Ingka Group, the IKEA retailer owning and operating more than 350 IKEA stores in 30
countries.

https://ikeafoundation.org/about/

KEA is a global company known for its ready-to-assemble DIY furniture. IKEA was the product of
diligence, perseverance, and innovation of its Swedish founder Ingvar Kamprad. He was born on March
30, 1926, in Pjätteryd (now part of Älmhult Municipality, Sweden), and was raised at a farm named
Elmtaryd, which is located in a small village called Agunnaryd. Even when he was still young, Kamprad
knew that the world of business was meant for him. At the age of five, he started selling matches to
neighbors. He found out that he could buy matches in bulk at a very low price, and would sell them at
low retail price but he still made a decent profit.

From selling matches, Kamprad eventually began to sell other items that ranged from fish to Christmas
decors to seeds. Later on, he also started selling school items like pens and pencils.

In 1943, when Kamprad was 17, his father gave him cash as a reward for doing well in school. He used
the money to found IKEA — the name rose from the initials of his name I(ngvar) K(amprad), and the
initials of the places where he grew up: E(lmtaryd) and A(gunnaryd).

During the first few years of IKEA, Kamprad started to sell and deliver his merchandise by using milk
trucks. By 1947, he began to diversify his business by adding furniture made by local manufacturers.
Soon, IKEA furniture spread its popularity. However, IKEA eventually faced boycotting by other
manufacturers because of the furniture’s very low price, forcing Kamprad to design the furniture at his
own warehouses.

Kamprad began to introduce the revolutionary ready-to-assemble furniture, also known as the “flat
pack” furniture. Thus, this gave birth to the unique IKEA concept of simple, practical and affordable “do-
it-yourself” furniture which could be purchased in “flat packs.” Despite being affordable and
uncomplicated to build, these flat-pack furniture items didn’t sacrifice quality and style — and many
people thought that IKEA’s items signaled the advent of the “modernist” furniture.
From then on, IKEA began to expand outside Sweden. In the 1960s the company began opening stores in
other Scandinavian countries such as Norway and Denmark. In the 1970s, IKEA started to expand
outside Scandinavia, opening its first stores in Germany and Switzerland, and eventually in other
European countries.

In 1974, IKEA broadened its market beyond continental Europe. In 1974, it opened its first Asian store in
Japan, and the following year it unveiled its first Australian shop near Sydney and its first North
American branch in Dartmouth, Nova Scotia, Canada.

It seemed there was no stopping IKEA’s growth. In the 1980s, it expanded further to other countries
such as the UK, Italy, France, Spain, Belgium, and the United States. When IKEA opened its first Shanghai
branch, more than 80,000 shoppers were present. In 2010, the company opened its first Latin American
branch in Santo Domingo, Dominican Republic.

Germany remains IKEA’s biggest market with 50 stores to date, while the United States comes at a close
second with 44 stores so far. The biggest IKEA store is currently found in Gwangmyeong, Gyeonggi in
South Korea, with its floor space measuring 59,000 square miles (or 640,000 square feet).

Today, there are over 300 IKEA locations in 38 countries. Its headquarters are now located in Delft, the
Netherlands. Amid the company’s stratospheric success, Kamprad had never borrowed money or issued
any stocks.

Kamprad had already stepped down from the board in 2013, and his youngest son had taken over the
chairmanship of the company. Despite his resignation and his advanced age, Kamprad still traveled a lot
around the world to visit IKEA branches. Kamprad was one of the wealthiest people on the planet — a
March 2010 issue of Forbes ranked him at 11th place on its list of the world’s richest people. In spite of
his envy-worthy wealth, Kamprad still lived simply and frugally — he still stayed at cheap hotels that he
could find, and still drove his old Volvo.

Kamprad passed away peacefully at his home in Småland, Sweden on January 27, 2018. He was 91.

Like many other global companies, IKEA has had its shares of allegations, namely poor customer service,
miserable working conditions and poor environmental practices (especially a highly-publicized scandal
regarding the company’s use of formaldehyde in its products during the 1980s). But IKEA seems adept in
dodging these issues very well.

IKEA may now be universally known for its smart, economical and highly customizable furniture, but the
company has also diversified its products and services from flat-pack houses to retail to food stores.

https://didyouknowhomes.com/history-of-ikea/

Ikea was founded by Ingvar Kamprad in 1943. The name of the brand is actually short for Ingvar
Kamprad's initials and the first letters of Elmtaryd and Agunnaryd, which is the farm and village where
he grew up in Sweden. He first started to sell pens, wallets, watches, picture frames, table runners, and
jewelry at low prices, until, five years later, he introduced furniture into his business. After seeing
positive feedback, he expanded the line and produced the first Ikea catalog in 1951. Ikea had it's first
showroom in 1953, so that their customers can see and feel the quality of the furniture before they plan
on buying it. The showroom was also an example of what was the right choice when other companies
were lowering prices as well. In the end, Ikea was successful at this, and moved on to designing
furniture for flat-pacts. Flat-packing began when a worker of the company disassembled a table to fit
inside of a car to avoid damage to the product. Self-assembled furniture also stemmed from this action.
Finally, in 1958, the first Ikea store opened in Älmhult, Sweden, which was the largest furniture display
in Scandinavia with 6,700 square feet of home furnishings.

But, of course, Ikea wasn't done there. After it's first in-store restaurant opens, and three decades
worth of store openings around Europe, the United States, and Australia, the official Ikea website is
launched in 1997. Now, as of May 2010, Ikea has 313 stores in 37 different countries. Ikea's mission
statement is "to create a better everyday life for the many," which means they "offer a wide range of
home furnishings with good design and function at prices so low that as many people as possible will be
able to afford them. Most of the time, beautifully designed home furnishings are usually created for the
few who can afford them. From the beginning, IKEA has taken a different path. We have decided to side
with the many. That means responding to the home furnishing needs of people around the world:
people with many different needs, tastes, dreams, aspirations and wallet sizes; people who want to
improve their homes and their everyday lives. It's not difficult to manufacture expensive fine furniture:
just spend the money and let the customers pay. To manufacture beautiful, durable furniture at low
prices is not so easy - it requires a different approach. It is all about finding simple solutions and saving
on every method, process or approach adopted - but not on ideas."

http://ikea1943.blogspot.com/2010/09/ikeas-brief-history-and-mission.html

PRODUCT DEVELOPMENT

Design and product development

The challenge:
Make good products at the lowest price

The design of home furnishing products at IKEA starts with an understanding of people’s everyday needs
at home, especially the needs of the majority of people, who have limited incomes and limited living
spaces. This is how IKEA succeeds in offering well-designed, functional products at prices so low that
most people can afford them.

In order to make products saleable and right for the IKEA identity, IKEA co-workers in product design
and product development focus on price and quality, design and function, environment and health. They
4entimeter every product idea with regard to the best use of raw materials and manufacturing
opportunities. This is why elements of the design are often decided on the factory floor, where
designers and manufacturers work together.

The IKEA range is developed by IKEA of Sweden in Älmhult, Sweden, and all positions in this work area
are based there.

https://www.ikea.com/ms/en_JP/the_ikea_story/working_at_ikea/work_areas_design_product_develo
pment.html

KEA’s design manager Marcus Engman explains how a team of just 20 designers oversees the creation of
2,000 affordable products each year at the world’s largest furniture company, in the second part of this
exclusive interview.

IKEA’s product development process is managed by Engman’s small team of in-house designers at the
company’s 4,000-square-metre headquarters in Älmhult, Sweden – the town where the brand’s first
store opened in 1958.

“We go and work together with designers from all over the world, but also when we do design we do it
on the factory floor,” said Engman. “We work in a very different way to how everyone else is working.”

Engman spoke to Dezeen in Stockholm earlier this week, ahead of the launch of London designer Ilse
Crawford’s collection for IKEA.

In the first part of the interview Engman, who rejoined the brand three years ago as design manager,
revealed how the Swedish flat-pack giant is using design to overhaul its reputation for “doing cheap
stuff”.

In the second part of the conversation, published below, he explained how his designers travel to
customers’ homes around the world and assess their different requirements when developing new
products.

“We always – and this is not a cliché – start the product development in people’s homes,” said Engman.
“I always try to go on home visits to real people, to find out what are the real needs.”

However the design team is also tasked with keeping prices affordable, spending a lot of time
considering how each product will pack and ship efficiently.

“One of the biggest costs when it comes to producing or doing product development is logistics,” said
Engman. “And if we could see to that on one pallet we could get a third more, just by changing the size
or something by two centimetres, then of course we try to do that to be smarter.”

“One 4entimeter there could maybe mean 10 euros in the end on each and every product,” he added.
All of the production and packaging is also done in-house, so any section of the process can be altered at
any time to make it more cost effective. “That is the trick to the great prices of IKEA,” said Engman.

IKEA operates 351 stores in 46 countries and last year generated annual sales of €28.7 billion (£21.5
billion). Its stores stock around 10,000 different products, with 2,000 new ones added each year.

https://www.dezeen.com/2015/02/09/ikea-design-manager-marcus-engman-interview-product-
development-process-cost/

IKEA has three steps in the process of designing and developing its product

The first step is to set a price the product is going to sell for. The product development begins with
designers, product developers, and purchasers getting together and brainstorming the materials, design,
and suppliers. When the price is given many factors come into play, design, material, color and other
factors. The product is then designed around those factors and numbers.

The second step is to choose a manufacturer. IKEA’s goals are to produce its products with the least
amount of packaging, air in between products during transportation, which has a very important part in
being cost effective. It is very important for the company that working conditions and environmental
awareness are being conducted. Therefore, it developed a code of conduct for those factors. The IKE
Trading Service of Conduct controls and oversees manufacturer working conditions for employees and
makes sure no child labor and other thing occur. Manufacturers are screened on a regular basis

The third step is to design the product. IKEA uses internal competition to design its products; designers
get the chance to show their talent when a new product is being developed. The goal is to design a
product that is very functional at a minimum cost.

https://www.otherpapers.com/essay/Ikea-Case-Study/26714.html