PROJECT REPORT

ENTREPRENEURIAL MAPPING
OF
INGVAR KAMPRAD, FOUNDER, IKEA
PRESENTED BY
COURSE
DATE OF SUBMISSION
GROUP
ENROLLMENT NO.

: KUMAR SUYASH RITURAJ

: B.TECH (MAE)
: 14/09/2016
: ASET-UG-1
: A2305414058

ACKNOWLEDGEMENT

This mapping would not have been possible without the

guidance of certain mentors and the blessings of god. Thus
with a sense of gratitude I would like to thank all these people
I express sincere thanks to my project guide Ms. Neelam
Saxena under whose guideline I completed my project. I am
wholeheartedly thankful to her for giving me her precious time,
attention & for providing me a systematic way for completing
my project on time.
My project has been accomplished, thanks to the support
system of many friends & colleagues with gratitude. I wish to
acknowledge all of them.

KUMAR SUYASH RITURAJ

MAE 5th SEM
A2305414058
ASET-UG-01

SYNOPSIS

In this report we are going to study

Ingvar Kamprad biography, a Swedish
entrepreneur, billionaire and who is
considered one of the richest men in
the world. He is the founder of IKEA,
a network of furniture stores with
affordable prices. Ingvar Kamprad
always wanted people around the
world to have been able to buy
beautiful
furniture
and
home
furnishings and this desire became
his mission.

Early life and education

Ingvar Feodor Kamprad was born on 30 March 1926, on a small

farm called Elmtaryd near the village of Agunnaryd, in the
Swedish province of Smland. To most present-day Swedes,
the date and the names, in a famously rural region, resound of
harsher times, when Sweden was agrarian and poor. They
speak of hard work, frugality and egalitarianism rooted in
shared poverty values which would eventually enter the IKEA
ethos.
Kamprad began his career at the age of six, selling matches.
When just ten, he criss-crossed the neighbourhood on his
bicycle, selling Christmas decorations, fish and pencils.
At 17, in 1943, Kamprads father rewarded him with a small
sum of money for doing well in school, despite being dyslexic.
With it, Ingvar founded a business named IKEA, an
abbreviation for Ingvar Kamprad from Elmtaryd, Agunnaryd,
his boyhood home.

INVOLVEMENT WITH IKEA

Ingvar Kamprad founded IKEA in 1943 as a mostly mail-order
sales business. It began to sell furniture five years later. The
first Mbel-IKA store was opened in lmhult, Smland, in
1958 (Mbel means "furniture" in Swedish). The first stores
outside Sweden were opened in Norway (1963) and Denmark
(1969). The stores spread to other parts of Europe in the
1970s, with the first store outside Scandinavia opening in
Switzerland (1973), followed by West Germany (1974).
Amid a high level of success, the company's West German
executives accidentally opened a store in Konstanz in 1973
instead of Koblenz. Later that decade, stores opened in other
parts of the world, such as Japan (1974), Australia, Canada,
Hong Kong (1975), and Singapore (1978). IKEA further
expanded in the 1980s, opening stores in countries such as
France and Spain (1981), Belgium (1984), the United States
(1985), the United Kingdom (1987), Italy (1989). The company
then expanded into more countries in the 1990s and 2000s.
Germany, with 50 stores, is IKEA's biggest market, followed by
the United States, with 44 stores. At the end of the 2009
financial year, the IKEA group operated 267 stores in 25
countries. The first IKEA store in Latin America opened on 17
February 2010 in Santo Domingo, Dominican Republic. As of
July
2013,
the
company's
presence
in developing
countries remains minimal.
The world's five largest IKEA stores are:
1. Gwangmyeong, Seoul
Capital
2
59,000 m (640,000 sq ft)
2. Stockholm Kungens
55,200 m2 (594,000 sq ft)

Area, South

Kurva,

Korea:
Sweden:

3. Shanghai Baoshan, China: 55,032 m2 (592,360 sq ft)

4. Shanghai Pudong Beicai,
49,400 m2 (532,000 sq ft)
5. Wuxi, China: 49,117 m2 (528,690 sq ft)

China:

In December 2014, it was announced that the world's largest

IKEA store at 59,000 square meters (640,000 square feet),
opened near the KTX Gwangmyeong Station, located at the
heart of South Korea's Seoul Capital Area. The next store
opening in Goyang in 2017 will be even larger at 164,000
square meters in gross floor area, breaking the previous world
record holder's 131,550 square meters. IKEA plans to have 6
stores in the country by 2020, four in the Seoul Capital Area,
one in Daejeon and one in Busan.
The largest store in the Southern Hemisphere is located
in Tempe, Sydney,
Australia
with
a
total
area
of
2
39,000 m (420,000 sq ft). The biggest store in North America
is located in Montreal, in the province of Quebec, Canada. The
store was opened in 1986 in the Ville-St-Laurent area, and was
completely renovated and expanded in 2012-2013. Built in
1986, the store's initial area was 22,062 m2(237,470 sq ft),
while
the
renovated
store
now
measures
2
43,636 m (469,690 sq ft).
In 2014, IKEA opened its first warehouse in Croatia,
near Zagreb. Due to problems with building permissions, the
construction was postponed to 28 August 2013. Eventually, the
warehouse opened its doors on 21 August 2014. The shopping
centre in Zagreb with a total area of 38,000 m2 is one of the 5
biggest in Europe and among the 10 biggest IKEA stores in the
world. In 2013, IKEA opened its first shopping centre
in Vilnius, Lithuania that is the biggest furniture-selling mall in
the Baltic states.
In March 2013, IKEA opened its first outlet in Qatar, after a
delay of several months. Like others in the Gulf Cooperation
Council, the Doha outlet is operated by the Al-Futtaim
Group. In August 2013, the first store in the Baltic States was
opened in the Vilnius region of Lithuania. Construction of the
26,500 sq ft (2,500 m2) store commenced in 2011 and the
store employs over 200 people.
IKEA began constructing its first store in India on 11 August
2016. The 400,000 sq ft store in Hyderabad is being built at a
cost of700 crore (US$100 million), and is scheduled to open in
autumn 2017.

CORPORATE STRUCTURE OF IKEA

IKEA is owned and operated by a complicated array of not-forprofit and for-profit corporations. The corporate structure is
divided into two main parts: operations and franchising. Most
of IKEA's operations, including the management of the majority
of its stores, the design and manufacture of its furniture, and
purchasing and supply functions are overseen by INGKA
Holding, a private, for-profit Dutch company. Of the IKEA
stores in 43 countries, 303 are run by the INGKA Holding. The
remaining 47 stores are run by franchisees outside of the
INGKA Holding, with the exception of IKEA Delft which is not
franchised.
INGKA Holding is not an independent company, but is wholly
owned by the Stichting INGKA Foundation, which Kamprad
established in 1982 in the Netherlands as a tax-exempt, notfor-profit foundation. The INGKA Foundation is controlled by a
five-member executive committee that is chaired by Kamprad
and includes his wife and attorney.
While most IKEA stores operate under the direct purview of
INGKA Holding and the INGKA Foundation, the IKEA trademark
and concept is owned by an entirely separate Dutch
company Inter IKEA Systems, headquartered in Delft. Every
IKEA store, including those run by INGKA Holding, pays
a franchise fee of 3% of revenue to Inter IKEA Systems. The
ownership of Inter IKEA Systems is exceedingly complicated
and not publicly known. Inter IKEA Systems is owned by Inter
IKEA Holding, a company registered in Luxembourg.

PROFITS:
The net profit of IKEA Group (which does not include Inter IKEA
systems) in fiscal year 2009 (after paying franchise fees to
Inter IKEA systems) was 2.538 billion on sales of 21.846

billion. Because INGKA Holding is owned by the nonprofit

INGKA Foundation, none of this profit is taxed. The
foundation's nonprofit status also means that the Kamprad
family cannot reap these profits directly, but the Kamprads do
collect a portion of IKEA sales profits through the franchising
relationship between INGKA Holding and Inter IKEA Systems
KAMPRADS ROLE IN IKEA:
Along with helping IKEA make non-taxable profit, IKEA's
complicated corporate structure allows Kamprad to maintain
tight control over the operations of INGKA Holding, and thus
the operation of most IKEA stores. The INGKA Foundation's
five-person executive committee is chaired by Kamprad. It
appoints the board of INGKA Holding, approves any changes to
INGKA Holding's bylaws, and has the right to preempt new
share issues. If a member of the executive committee quits or
dies, the other four members appoint his or her replacement.
In Kamprad's absence the foundation's bylaws include specific
provisions requiring it to continue operating the INGKA Holding
group and specifying that shares can be sold only to another
foundation with the same objectives as the INGKA Foundation

NET WORTH OF KAMPRAD

According
to
Swedish
business
weekly Veckans
Affrer, Kamprad is one of the world's wealthiest people. This
report is based on the assumption that Kamprad owns the
entire company, an approach both IKEA and the Kamprad
family reject. Kamprad retains little direct ownership in the
company, having transferred his interest to Stichting INGKA
Foundation and INGKA Holding as part of a complex tax
sheltering scheme that leaves his actual degree of control
vague.
In March 2010, Forbes magazine estimated Kamprad's fortune
at US$23 billion, making him the eleventh richest person in the
world. A year later, he fell to 162nd after his lawyers produced
documents proving that the foundation he established and
heads in Liechtenstein owns IKEA, and that its bylaws bar him
and his family from benefiting from its funds. In June 2015,
Kamprad was listed as the eighth wealthiest person in the
world in the Bloomberg Billionaires Index, with an estimated
net worth of $43.2 billion. Forbes reported Kamprad's net
worth as of February 2016 to be $3.4 billion.