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To Create a Better Everyday Life for the Many People
ÒOnce upon a time, a long, long time ago we decided that, instead of making Starting out
furniture for people with fat wallets, we would side with the majority of people
instead and offer them a better everyday life. We decided to offer a wide range IKEA started in Sweden over 50 years
of home furnishing items of good design and function, at prices so low the ago with one manÕs vision. Ingvar
majority of people could afford to buy them.Ó Ingvar Kamprad. Kamprad, the founder of IKEA, asked
the questions:
Many successful businesses stem from one simple good idea. Someone with ● ÒWhy are nice homes only
a bit more vision than average spots a gap in the market. He or she notices that possible for people with a lot of
existing producers are failing to provide the benefits that consumers are really money?Ó
looking for.
● ÒWhy shouldnÕt everybody be
This case study focuses on a particularly successful business idea which able to afford a nice, functional
resulted in the foundation of IKEA, one of the largest home furnishing home?Ó
companies in the world. It examines IKEAÕs vision/mission statements
● ÒWhy does furniture have to be
and considers how consumer needs can be met.
so expensive?Ó
In many ways, IKEA was a forerunner in pioneering concepts which are ● ÒWhy is there no one offering a
becoming increasingly important in modern business. These include: wide range of home furnishing
● ethical business practice articles of good form and function
● providing a fair deal for and being led by consumer needs at prices so low that the many
people can afford them?Ó
● empowering employees, so that they feel a part of the company
● responsibility to the community in which the company operates and to Ingvar Kamprad wanted to help create
a better everyday life for the people in
the wider community.
the area of Sweden where he lived. He
was brought up in a farming
community where ordinary people
were struggling to make a living out of
stony fields and limited resources.
Nothing could be taken for granted and
survival meant hard work, ingenuity
and working together.
Ingvar KampradÕs desire to help
ordinary people founded the basis of a
strong company culture which has
helped to make IKEA so successful. It
is not surprising that IKEA comes from
Sweden - a country which has long
been famous for the way in which it
cares for its citizens. In a recent IKEA
publication, Democratic Design, the
concept of giving everyone the same
opportunity in life is set out in the
following way:
Ò..everyone who has grown up in
Sweden has learnt - either from their
Dad, or from society in general -
people who are not all that well off
should still be given the same
opportunities as people who are. ItÕs
hardly surprising that, as a Swedish
company, IKEA espouses Swedish
values.Ó
MAIN MENU PREVIOUS
Creating an
anti-brand
The IKEA concept was a revolutionary
one which was well ahead of its time.
Essentially, IKEA has built an anti-
brand which stands for the good of the
many people rather than a narrow
group of shareholders.
IKEA began with the question: ÒWhoÕs
on the side of the customer?Ó
From this stemmed a corporate
philosophy which asked two further
questions:
ÒIsnÕt there room for an anti-brand that
stands for low price, high quality and
innovation?Ó
ÒIsnÕt there room for an anti-brand that
stands for the benefit of everyone?Ó
High quality at
affordable prices
In order to realise the aims of his
business idea, Kamprad needed a way
of designing which would make it
possible to maintain high quality
standards, while at the same time
making reductions in price. The
solution he came up with was based on
common sense and a respect for the
customer. He carried out detailed
research in the different life stages and
the needs of customers at each stage
(e.g. setting up home for the first time,
raising a young family, retiring etc.).
From this, he was able to calculate what
customers would be able to afford,
while still having some money over.
Then he sourced the right materials and
the production units which had the
expertise and capacity to produce
goods economically. In many cases, he
approached producers who were not
part of mainstream furniture
manufacturing. For example, a shirt
manufacturer may well be suited to
producing loose covers for settees and
beds.
Large IKEA stores were built on the
outskirts of towns where rates were
cheaper and people could park easily.
The furniture was sold in flat packages
which saved space and allowed for ease
of handling and transport.
Finally, Ingvar Kamprad built his
business on the philosophy ÒWe do a
little, you do a little, together we save
moneyÓ which meant that the
customer became part of the
production process. The DIY idea was
refined and put into operation on a large
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scale. All this allowed for long
production runs, which provided
economies of scale and growth whilst
maintaining the quality of the finished
products. Instead of increasing the
numbers of service personnel when the
business grew, he kept the numbers the
same, reasoning that employing more
people would cost more money and this
would make the products more
expensive (so that buyers would not be
able to afford them).
The simplicity of the way of working is
what makes IKEA successful. The
initial vision Òto create a better
everyday life for the many peopleÓ is
even more relevant today than it was 50
years ago.
IKEAÕs vision
A vision is the ideal or aim to which an
organisation and its people work. The
vision statement should answer the
question - ÔWho is IKEA?Õ Having a
clear vision enables an organisation to
enthuse its employees, customers,
suppliers and other important
stakeholders. Ingvar KampradÕs vision,
for example, was different and exciting
because it said that ordinary people
mattered.
Nowadays, many modern organisations
set out to create a corporate and a
personal vision for the people that
work for the organisation.
Today IKEAÕs corporate vision is that
of:
ÒA community of professionals,
constantly developing the skills
necessary to create a better everyday
life at home for the many people.Ó
This is translated down to a personal
vision for IKEA employees:
ÒI, as an employee at IKEA, can make
a difference. I am able to help to create
something for the benefit of everybody,
a better everyday life at home.Ó
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IKEAÕs mission
Having created a clear vision, it is then
necessary to translate the ideas into a
mission - i.e. a purpose which can be
used as a clear guiding principal for
how the organisation and its employees
will be able to achieve the vision. The
mission statement lays out the direct
practical steps which the organisation
and its employees will be able to take
to achieve its vision. With a clear
mission, it is possible to set out what
the organisation and its people need to
do to secure improvements in
performance.
IKEAÕs mission is:
ÒTo develop the skills of every IKEA
employee, so that they may become
professionals in providing a complete
range of home decorating products of
good form and function at a low price.Ó
The mission for IKEAÕs employees is:
ÒI will gain the knowledge necessary to
develop myself and my skills so that my
work and my life are more
meaningful.Ó
Developments of IKEAÕs corporate
mission are reflected in the companyÕs
businesses practices which
conveniently can be set out under the
mnemonic IKEA:
I = INNOVATION
Discovering better solutions to reduce
costs without affecting quality, finding
innovative production methods and
materials.
K = KNOWLEDGE
Existing within the business,
incorporating 50 years of history and
home decorating practice throughout the
world.
E = EXPERIENCE
Existing within the stores, incorporating
ideas, inspirations relating to home
decorating solutions.
A = ACCESSIBILITY
Availability of complete home furnishings
at all times at low, appropriate prices.
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TodayÕs business idea
- democratic design
Today, IKEAÕs business idea has come
some way since the earliest days of
Ingvar Kamprad. IKEA sets out its
business idea in the following way:
ÒTo offer a wide range of home
decorating articles with good form and
function, at prices so low that as many
people as possible will be able to afford
them.Ó
The three key dimensions of IKEA are
therefore:
Good FORM and FUNCTION, at a
LOW PRICE.
Most designers will accept the principle
that the form of a product depends on
its function, e.g. the shape of a chair is
determined by the need for a person to
sit comfortably on it. The product
which the designers create often
incorporates two important dimensions
- good design and practical function.
Nevertheless, it is still possible to
encounter form without any obvious
function. Sometimes beauty alone
provides sufficient justification for the
existence of an object - it becomes art.
In the same way, it is sometimes
possible to encounter function without
form - a product is so eminently well
suited for its purpose that its appearance
is of no consequence.
In our homes, however, the best
solution is almost invariably a
combination of both form and function.
However, form and function in
harmony are only half the story.
Affordability also has an important
part to play. Price is the third and most
critical dimension for those who seek to
make good design and practical
function available to the many, not just
the few. It is the combination of form,
function and a low price at the same
time, which makes IKEA products
unique.
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Illustrating the key
dimensions - The
…ggla Chair
The best way to illustrate the concept of
democratic design at IKEA is to take a
specific example.
Form - the …ggla Chair is inspired by
Th™netÕs Vienna chairs and was first
produced for IKEA at its Th™net
factory. The chair was produced in
formed wood and was light, strong and
beautiful.
Function - this was a typical example
of a chair which could be easily
stacked, fitted many styles, was
comfortable and elegant without being
extreme. Thanks to its lightness, it was
easy to move and handle.
Low price - this, however, was not
enough for Ingvar Kamprad, who
commented ÒThe chair is too expensive
- we canÕt sell it in a flat packÓ.
Designer Gilles Lundgren found the
solution. A supplier in the USA,
together with the enthusiasts from
SmŒland in Sweden, found new
materials and production methods to
make it possible. Today the chair is
made in recyclable polypropylene for
use indoors and out. It comes with a
stool, an …gglett, in many different
colours and combines the three
dimensions of IKEA: form, function
and a low price.
Meeting the needs of
the consumer
Because IKEA is fundamentally
concerned with serving the
requirements of Ôthe many people,Õ the
design process begins with finding out
what the consumer wants. IKEA
therefore engages in a continual cycle
of market research to find out about
consumer lifestyles, what benefits
consumers are seeking from a range of
household furnishings, what consumer
perceptions are of existing products and
many other things. IKEA has always
been conscious of the importance of a
detailed analysis of customer needs.
For example, because IKEAÕs primary
market is Ôthe many peopleÕ rather than
the privileged few, a prime concern of
furniture design will be to provide
solutions for people who may live in
small, compact homes. The form and
function of furniture designed by IKEA
is thus very much driven by the needs
and requirements of consumers.
Achieving and
maintaining low
prices
IKEA continually strives to provide
beautiful, practical furniture at a low
price. This means, for example, that
IKEA designers work with production
unit suppliers to design furniture in a
way which makes the most rational use
of available production capacity. It
means that products are designed to be
produced in environmentally suitable
materials that can be purchased at
reasonable prices and that products are
designed so that customers can
assemble them themselves at home in
order to save money.
PREVIOUS
THE IKEA
DIAMOND
FOCUS ON THE CUSTOMERS
(Ensures big volumes)
EXTERNAL
MARKET
COMMUNICATION
MEETING WITH
THE CUSTOMER
THE RANGE AND
GENUINELY LOW PRICES
PRODUCT DEVELOPMENT WITH
SUPPLIERS
PURCHASING AND DISTRIBUTION
CAPACITY DEVELOPMENT
CAPACITY COMMITMENT
UNIQUE
ADVANTAGES
FOCUS ON THE SUPPLIER
(Ensures low prices)
IKEA purchasers travel the world to
find the best possible manufacturers at
the lowest possible price, without
undermining the designerÕs original
idea or lowering the quality of the
product. The result is that design
engineers are not frightened by the
mathematics of making maximum use
of materials and technology. It also
means that customers do not need a
degree in engineering to put their
furniture together!
Meeting
environmental
standards
Nowadays, consumers demand that
furniture design meets the highest
environmental standards.
IKEA has responded to this consumer
demand and has set itself high standards
which mean that:
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● manufacturing is carried out so
that materials, technology and
transportation have the least
possible damaging effect on the
●
environment
raw materials are used rationally
and waste is minimised.
Unfortunately, no manufacturing
process is completely environmentally
friendly but at IKEA, a very strong
emphasis is placed on thinking and
acting ecologically. For example by
striving:
● not to consume resources at a rate
faster than nature can replace
them
● not to use unnatural materials and
substances
● to preserve nature and its
inhabitants
to refrain from dumping waste.
● of furniture and furnishings. Make
Conclusion
This case study shows the importance
and influence of vision within a
company. Ingvar KampradÕs original
vision has provided IKEA with a clear
set of goals and principles that have
contributed enormously to the success
of the company. His vision to provide
home furnishings of good design and
function at prices so low that the
majority of people could afford them
has led to a company culture which
necessitates the best practice in not only
the design of its products but the design
of the company structure and its
systems.
TASKS & ACTIVITIES
1 The IKEA case study provides us
with a radical example of a business
organisation which was founded on the
6 Organisational cultures often
develop as a result of their early
history. To what extent would you say
need to serve customers, employees that the IKEA culture is a result of its
and the community. What do you see history and development?
as the main points of difference
between IKEA and a more
conventional business organisation?
Set your findings out in a table.
7 What activities that IKEA engage
in would you point to as examples
of ethical practice?
2 What do you understand by the
concept of Ôdemocratic designÕ?
What do you see as being the most
8 Draw a flow chart which you think
best describes the key stages in the
design process at IKEA.
important ingredient of effective
democratic design?
9 What do you understand by each of
the following business terms as
3 If you live near to an IKEA store,
make a visit to the store. Select five
items which represent different types
they are used in the case study?
● ethical business practice
● corporate philosophy
notes about the form, function and
● economies of scale
price of these items. Which item do
you think best reflects the concept of ● corporate vision
democratic design and why?
● corporate mission
● gap in the market
4 IKEA claims to have created an
anti-brand. To what extent do you
think that this is true? Can you cite
● anti-brand
other examples of anti-brands? ● personal vision
● personal mission
5 What can other business
organisations learn from the IKEA
story?
●
●
market research
quality control.
http://www.ikea.com
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