Building Piece by Piece: IKEA Becomes an Industry Leader
Building Piece by Piece: IKEA Becomes an Industry Leader
In 1947, Kamprad decided to purchase an abandoned factory and begin production of a line of furniture. In order to keep his costs down, Kamprad used local manufacturers in the forests close to his home to supply his goods. The furniture was such a hit that in 1951, Kamprad chose to discontinue all his other operations and product lines and to focus solely on furniture. He believed that his company could become a furniture provider on a larger scale.
Over the next few years, IKEA become embroiled in a pricing war with its main competitor. As both companies continued to lower their prices, Kamprad become concerned about preserving quality. In 1953, Kamprad came up with a solution to this problem in the form of a showroom. IKEA’s first furniture showroom opened in Älmhult to much positive response. For the first time, customers could actually come face to face with the products before ordering them, allowing them to make their purchasing decision based on first-hand experience. It was a gamble that paid off for IKEA as people flocked to the showroom in droves.
Two years later, IKEA would run into trouble. Under pressure from its competitors, IKEA’s suppliers began to boycott the company. In response, Kamprad would make a decision that would forever change the company; from now on, IKEA was going to design its own furniture. When one IKEA employee decided to remove a table’s legs so it would fit securely into a car, the company would again be revolutionized. After that point, IKEA began to orient itself towards design for flat packaging. The result of this was both lower prices and easier transportation home.
In the coming decade, IKEA would continue its expansion, opening its first stores outside of Sweden. As increasing numbers of people showed up to store openings, Kamprad decided to change the layout of his stores to a warehouse style, allowing people to serve themselves. Denmark, Switzerland, Germany, Australia, Hong Kong, Canada, France, Russia, and the U.S. – one by one, IKEA expanded into each of these countries, creating a cult-like following wherever it went.
Today, Kamprad is no longer in charge of the day-to-day operations of running the company, but IKEA remains in the hands of his family. He has refused to take the company public for fear that it will slow the decision-making process that has enabled its growth over the decades. The future of the company lies in the hands of one of Kamprad’s three sons, although he does not know which one as of yet. He has given his children a challenge – whichever son is most successful in running their respective arms of Habitat (IKEA’s upmarket furniture chain) will not only be placed in charge of the company, but will also inherit the Kamprad family fortune.
Until that time, it is likely that this company whose stores received over 500 million visitors worldwide in the last fiscal year will maintain its position as the global industry leader.
Building Piece by Piece IKEA Becomes an Industry Leader
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“It is our duty to expand,” said Kamprad. “Those who cannot or will not join us are to be pitied…A glorious future!”
In 1947, Kamprad decided to purchase an abandoned factory and begin production of a line of furniture. In order to keep his costs down, Kamprad used local manufacturers in the forests close to his home to supply his goods. The furniture was such a hit that in 1951, Kamprad chose to discontinue all his other operations and product lines and to focus solely on furniture. He believed that his company could become a furniture provider on a larger scale.
Over the next few years, IKEA become embroiled in a pricing war with its main competitor. As both companies continued to lower their prices, Kamprad become concerned about preserving quality. In 1953, Kamprad came up with a solution to this problem in the form of a showroom. IKEA’s first furniture showroom opened in Älmhult to much positive response. For the first time, customers could actually come face to face with the products before ordering them, allowing them to make their purchasing decision based on first-hand experience. It was a gamble that paid off for IKEA as people flocked to the showroom in droves.
Two years later, IKEA would run into trouble. Under pressure from its competitors, IKEA’s suppliers began to boycott the company. In response, Kamprad would make a decision that would forever change the company; from now on, IKEA was going to design its own furniture. When one IKEA employee decided to remove a table’s legs so it would fit securely into a car, the company would again be revolutionized. After that point, IKEA began to orient itself towards design for flat packaging. The result of this was both lower prices and easier transportation home.
In the coming decade, IKEA would continue its expansion, opening its first stores outside of Sweden. As increasing numbers of people showed up to store openings, Kamprad decided to change the layout of his stores to a warehouse style, allowing people to serve themselves. Denmark, Switzerland, Germany, Australia, Hong Kong, Canada, France, Russia, and the U.S. – one by one, IKEA expanded into each of these countries, creating a cult-like following wherever it went.
Today, Kamprad is no longer in charge of the day-to-day operations of running the company, but IKEA remains in the hands of his family. He has refused to take the company public for fear that it will slow the decision-making process that has enabled its growth over the decades. The future of the company lies in the hands of one of Kamprad’s three sons, although he does not know which one as of yet. He has given his children a challenge – whichever son is most successful in running their respective arms of Habitat (IKEA’s upmarket furniture chain) will not only be placed in charge of the company, but will also inherit the Kamprad family fortune.
Until that time, it is likely that this company whose stores received over 500 million visitors worldwide in the last fiscal year will maintain its position as the global industry leader.
Building Piece by Piece IKEA Becomes an Industry Leader
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Linda RichardsonLinda Richardson is the Founder and Executive Chairwoman of Richardson, a global sales training and performance improvement company. As a recognized leader in the industry, she has won the coveted Stevie Award for Lifetime Achievement in Sales Excellence and she was identified by Training Industry, Inc. as one of the “Top 20 Most Influential Training Professionals.” Ms. Richardson is credited with the movement to Consultative Selling and is the author of ten books on selling and sales management, including Sales Coaching — Making the Great Leap from Sales Manager to Sales Coach, and Stop Telling, Start Selling. She teaches sales and management at the Wharton Graduate School of the University of Pennsylvania and the Wharton Executive Development Center. Linda is a frequent speaker at industry and client conferences, has been published extensively in industry and training journals, and has been featured in numerous publications, including The Wall Street Journal, Forbes, Nation’s Business, Selling Power, Success, and The Conference Board Magazine. Learn more about Richardson's sales training and performance improvement solutions at http://www.richardson.com web - Visit Linda Richardson's Website |
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Dave KurlanDave Kurlan is the founder and CEO of Objective Management Group, Inc., the industry leader in sales assessments and sales force evaluations, and the CEO of David Kurlan & Associates, Inc., a consulting firm specializing in sales force development. Dave has been a top rated speaker at Inc. Magazine's Conference on Growing the Company, the Sales & Marketing Management Conference and the Gazelles Sales & Marketing Summit. He has been featured on radio and TV, including World Business Review with General Norman Schwarzkopf, in Inc. Magazine, Selling Power Magazine, Sales & Marketing Management Magazine and Incentive Magazine. He is the author of Mindless Selling and Baseline Selling – How to Become a Sales Superstar by Using What You Already Know about the Game of Baseball. He created and wrote STAR, a proprietary recruiting process for hiring great salespeople, and he writes Understanding the Sales Force, a popular business Blog and is a contributing author to The Death of 20th Century Selling and 101 Great Ways to Improve Your Life, Volume 2. - Visit Dave Kurlan's Website |
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David AchesonDavid Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns. David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website |
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