IKEA

IKEA is a multinational company that sells home furnishing products and is a major competitor in the furniture industry. The hugely successful company is known for its simple, affordable products. IKEA has been in business for decades and has hundreds of stores located throughout the world, including in North America, Europe, and Asia.

Corporate History

In 1943, Ingvar Kamprad founded IKEA in Älmhult, Sweden, at the age of seventeen. Kamprad based the name of the company on his initials (I and K) and the first letters of the farm and village where he lived—Elmtaryd (E) and Agunnaryd (A), respectively. At first, IKEA sold wallets, watches, jewelry, pens, picture frames, table runners, and nylon stockings.

Kamprad began advertising in local newspapers in 1945. He also began a mail-order service for the company and used a milk van to deliver products to the train station for distribution. Three years later, he added locally-made furniture to the company's inventory. Kamprad published the first IKEA catalogue in 1951, with hopes that it would help increase IKEA's furniture sales. The catalogue worked, and furniture sales increased so much that two year later Kamprad was able to debut first IKEA furniture showroom in Älmhult. The new store allowed customers to see and feel IKEA's products in person. In 1958, he opened the first actual IKEA store in Älmhult; its furniture display was the largest in all of Scandinavia.

IKEA became an international company in 1963, when it opened a store in Oslo, Norway. Kamprad opened IKEA Kungens Kurva, IKEA's flagship and largest store at the time in Stockholm, Sweden, in 1965. The company also opened a self-serve warehouse the same year. In the years that followed, Kamprad opened several new IKEA stores throughout the world, including Copenhagen, Denmark, in 1969; Zurich, Switzerland, in 1973; Munich, Germany, in 1974; Sydney, Australia, in 1975; and Vancouver, Canada, in 1976. These new locations helped to spread the brand.

The company formed the IKEA Group in 1982 and instituted the Netherlands-based Stichting INGKA Foundation as its owner. The purpose of the foundation was to fund charities and reinvest in the IKEA Group. By the mid-1980s, the IKEA Group consisted of sixty stores, employing nearly ten thousand people. In 1985 the company continued its expansion, opening its first store in the United States in Philadelphia, Pennsylvania. Founder, president, and chief operating officer (CEO) Kamprad retired from IKEA Group in 1986 and took on an advising role with IKEA's parent company INGKA Holding B.V., which he held until his death in 2018. Anders Moberg became the new president and CEO.

The company continued its expansion through the 1990s with new stores in Hungary, the Czech Republic, Poland, and Spain. In the company launched its website, www.ikea.com. By the end of the decade, the corporation boasted more than fifty thousand workers and 158 stores in twenty-nine countries. The company welcomed new president and CEO Anders Dahlvig in 1999.

The company experienced even more growth in the 2000s, with stores opening in Russia in 2000, Portugal in 2004, and Japan in 2006. The expansion continued into the new millennium with the introduction of numerous new products and services. Peter Agnefjäll took over as president and CEO of IKEA Group in 2013. In 2024, the company reported that there were a total of 473 IKEA stores in sixty-three countries and territories.

Products

IKEA carries thousands of affordably priced household products. The products typically have simple, lightweight designs and must be self-assembled. Many of its items become very popular with consumers. Some of these include the Billy bookcase and Klippan sofa. Numerous new home items are introduced regularly. In 1994, the company launched a new furniture series for children. Then in 2005, the company introduced a new product line of bedroom furnishings, including mattresses, textiles, and storage items. That same year, IKEA also launched a new line of kitchen and dining furnishings. In 2006, the company introduced its own food line, which was based on Swedish recipes. In the late 2010s, IKEA began selling smart home products, or appliances and other household items that can be controlled by a smart home assistant such as Google Home or Amazon Echo and can be programmed to perform various functions automatically. While IKEA has not been an innovator in smart home products, its role in making such products affordable to the average consumer is significant. In 2021, IKEA began offering design services via augmented reality using an iPhone.

Praise and Criticism

IKEA has long been praised for its ethical business practices. The company states that its vision is to offer people "a better everyday life." Furthermore, its business idea is to provide people with a wide variety of home furnishings at low, affordable prices.

In 2000, the company produced a code of conduct called the IKEA Way on Purchasing Home Furnishing Products (IWAY). The document outlined the ideal relationship between the company and its suppliers. It covered areas such as working conditions, child labor prevention, legal requirements, and forestry management. Also in 2000, IKEA launched the IKEA Way on Preventing Child Labour, which was intended to prevent the use of child labor by the company's suppliers.

Additionally, IKEA has strived to sell products and run stores that are energy efficient and sustainable. Because its products are simple and lightweight, fewer materials are needed to make them. Also, products typically require self-assembly. This means the company uses fewer automated assembly lines, which reduces emissions.

However, some environmentalists have criticized IKEA. Many products often require replacement after a short time, which researchers say leads to an increased consumption of goods. Environmentalists feel that this constant consumption puts a strain on natural resources. For example, mass consumption of IKEA products results in an increased use of water, energy, and wood.

To oppose this overconsumption, in 2020, IKEA conducted a marketing campaign supporting the donation or recycling of old IKEA furniture. In the 2020s, the company pushed for sustainability and becoming climate positive.

Bibliography

“About IKEA.” IKEA, www.ikea.com/us/en/this-is-ikea/about-us/. Accessed 30 Oct. 2024.

Charlton, Alistair. “Ikea’s Upcoming Smart Blinds Could Be Priced from Just $112.” GearBrain, 12 Nov. 2018, www.gearbrain.com/affordable-smart-blinds-ikea-2619324458.html. Accessed 30 Oct. 2024.

Craig, Lindsey. "IKEA: Getting to Climate Positive by 2030." Interview. Furniture World, 10 July 2024, www.furninfo.com/furniture-world-articles/4122. Accessed 30 Oct. 2024.

“From Humble Origins to Global Brand—A Brief History of IKEA.” IKEA, www.ikea.com/us/en/this-is-ikea/about-us/from-humble-origins-to-global-brand-a-brief-history-of-ikea-pubad29a981. Accessed 30 Oct. 2024.

“Inter IKEA Group.” IKEA, www.inter.ikea.com/en. Accessed 30 Oct. 2024.

Jarrett, Michael, and Quy Nguyen Huy. “IKEA’s Success Can’t Be Attributed to One Charismatic Leader.” Harvard Business Review, 2 Feb. 2018, hbr.org/2018/02/ikeas-success-cant-be-attributed-to-one-charismatic-leader. Accessed 30 Oct. 2024.

Koch, Richard. “How a Price Simplifying Epiphany Turned IKEA into a Billion-Dollar Business.” Entrepreneur, 25 Oct. 2016, www.entrepreneur.com/article/282220. Accessed 30 Oct. 2024.

Salisbury, Peter. “Behind the Brand: IKEA.” Ecologist. Resurgence Trust, 19 Oct. 2011, www.theecologist.org/green‗green‗living/behind‗the‗label/1098324/behind‗the‗brand‗ikea.html. Accessed 30 Oct. 2024.