IKEA
... Orientation ranking indicates the country prescribes to the values of long-term commitments and respect for tradition. This is thought to support a strong work ethic where long-term rewards are expected as a result of today's hard work. However, business may take longer to develop in this society, particularly for an "outsider". A Low Long-Term Orientation ranking indicates the country does not reinforce the concept of long-term, traditional orientation. In this culture, change can occur more rapidly as long-term traditions and commitments do not become impediments to change. IKEA Svenska AB, founded in 1943 is the world's largest furniture retailer which specializes in stylish but inexpensive Scandinavian designed furniture. It has 128 fully-owned stores in 26 countries, visited by over 108 million people yearly, and worldwide sales of about $5.4 billion in 1994 (IKEA 1994). IKEA's success in the retail industry can be attributed to its vast experience in the retail market, product differentiation, and cost leadership. The company is, perhaps, one of the World's most successful multinational retailing firms operating as a global organization based on its unique concept that the furniture is sold in kits that are assembled by the customer at home. IKEA’S MISSION IKEA's mission is to offer a wide range of home furnishing items of good design and function, excellent quality and durability, at prices so low that the majority of people can afford to buy them (IKEA 1994). The company targets the customer who is looking for value and is willing to do a little bit of work serving them, transporting the items home and assembling the furniture for a better price. The typical IKEA customer is young low to middle income family. IKEA’S GLOBAL STRATEGY In order to maintain cost leadership in the market, internal production efficiencies must be greater than that of competitors. Under IKEA's global strategy, suppliers are usually located in low-cost nations, with close proximity to raw-materials and reliable access to distribution channels. These suppliers produce highly standardized products intended for the global market, which size provides the firm with the opportunity take the advantage of economies of scale factors. IKEA's role is not only to globally integrate operations and centrally design products, but also to find an effective combination of low cost, standardization, technology, and quality. In the case of IKEA, a standardized product strategy does not mean complete cultural insensitivity. The company is rather responding to globally emerging consumer tastes and preferences. Retail outlets all over the world carry the basic product range which is universally accepted, but also places great emphasis on the product lines that appeal to local customer preferences. IKEA’S CORPORATE CULTURE Sweden's IKEA is not only the world's largest furniture shop. It is also an ambassador of Swedish culture that is bringing Scandinavian design into millions of homes all around the world. Scandinavian design is very popular all around and that has been one of the recipes for success of the Swedish furniture store IKEA. If you live in a big city, you probably have a Swedish IKEA store near you. Visiting an IKEA shop is like visiting a Scandinavian home... and the world loves Scandinavian homes! Millions of people around the world have already fallen in love with Scandinavian style at IKEA. The secret: the very Scandinavian philosophy of "creating a better everyday life for the many people". Functional, quality products at a price that as many people as possible will be able to afford. Because making good quality products does not necessarily means making them expensive. Ingvar Kamprad believes that: "Most things still remain to be done - a glorious future! Time is your most important asset. Split your life into 10-minute units and sacrifice as few as possible to futurities”. The corporate culture of IKEA is built upon this philosophy all the way from design teams to suppliers and to the customer. A continuous strife for improvement in all areas of the value chain is an effective way to shape the industry to better fit IKEA's future strategies. Due to the uniqueness of IKEA's strategic positioning, being the largest competitor in its field, the firm has the advantage of setting the phase of the industry (refer appendix 2). Bureaucracy is fought at all levels in the organization. Kamprad believes that "simplicity and common sense should characterize planning and strategic direction" (Bartlett et Al, 1993: 78). In addition, the culture emphasizes efficiency and low cost which is not to be achieved on the expense of quality or service. A symbolic policy, such as only flying economy class and stay at economical hotels, employing young executives and sponsoring university programs have made cost part of corporate culture and has further inspired the influx of entrepreneurship into the organization. For instance, all design teams enjoy complete autonomy in their work, but are expected to design new appealing products regularly. TYPICALLY SWEDISH: What is considered to be typical for Sweden and or the Swedes obviously depends on who you ask. But in general Swedes: • Acceptance • Virtue and being grateful • Nice and polite • Respecting higher authorities • Minding your own business • Afraid to show feelings • Separates work from privacy • Reserved (keeping one's feelings, thoughts, or affairs to oneself.) • Show up on time and expect others to do the same • Get extremely annoyed when the bus is two minutes late • If yo...