Ikea Case Study

1. List the various ways in which IKEA has managed its global environment over time.

IKEA was founded by Ingvar Kamprad in 1943. Today IKEA is one of the largest furniture chains in the world with three hundred and fifteen stores operating in twenty seven countries. IKEA has managed its Global Environment in the three major ways which has contributed to its great success. These ways are as follows:

1. Ingvar Kamprad was able to identify the changing trend in consumer wants and adapted his products to these evolving needs. Consumers wanted well designed and well-made furniture at an affordable price. IKEA was able to reduce its cost through developing internal departments to complete task which are usually outsourced by its competitors.

2. Developing and maintaining an international reputation that is synonymous with hard works and great values among all of the organizational stakeholders.

3. IKEA has increased the organization’s size and geographical reach through global franchising.

2. How would you explain the rationale behind the success of IKEA’s approach to managing its environment?

As listed in Question 1 above, IKEA has attained its success in the global environment through three major strategies.

From the very beginning of the establishment of IKEA, owner Ingvar Kamprad was able to identify consumers’ needs for affordable, well made furniture. To be able to satisfy these requirements, the organization had to manage not only the quality of their products but also the cost. IKEA was able to manage these factors by developing several dependencies both internally and externally. IKEA purchases its raw materials from non-traditional suppliers. These suppliers charge less than their competitors and these savings are passed onto IKEAs’ consumers through lower prices. Since non-traditional supplier are used, there is less competition for resources which decreases issues like scarcity or rising cost triggered by supply and demand. Another way IKEA is...