Who is us - a brief history on ikea PDF

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a brief history on ikea...

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Who Is Us? IKEAS’s Corporate National Identity Introduction IKEA is a multinational furniture conglomerate founded by Ingvar Kamprad in Sweden in 1943. Its main marketing project is to design and sell easily detachable furniture and home decorations also they are famous for the modernism of product design. Ikea brand owned and managed Inter IKEA Systems BV in the Netherlands, Ikea is not owned by shareholders and the complex corporate structure was built in part to cope with Sweden's high taxes. Company has 43 production units in 9 countries including China, Hungary, Lithuania, Poland, Portugal, Russia, Slovenia, Sweden, and the United States, with a total number of suppliers exceeding 1800, covering more than 50 countries in the world. IKEA has always taken "creating a better daily life for many people" (Ikea 2021, para 1). This is a core business philosophy and supported this philosophy by providing high-quality product designs and fullfeatured home accessories at low prices. At the same time, convenient flat- packaging and the unique experience in store environments such as restaurants, shopping carts or other innovative business models make IKEA become the largest furniture retail chain in the world today, with 378 stores in 30 countries and keep developing the online store convenient for consumers. Finally, Ikea shows us a unique and attractive business model, although in business economy or social morality which is difficult for other entrepreneurs to imitate. The History IKEA Established in 1943, Ikea became a huge international hit as everyone loved their budget furniture. This manufacturer and retailer was founded by “Ingvar Kamprad, being a young entrepreneur” (IKEA, us and heritage, 2021) he decided to open up the very first Ikea store in Smaland in southern Sweden. Kamprad developed Ikeas stores to look like the Swedish flag by branding the business to have blue and yellow colours, this helped give a sense of home to the company as consumers who are Swedish can resonate with It. Ingvar wanted to provide a good and service that helped priced conscious consumers, to do so he came up with a concept that required him to contract independent furniture makers and suppliers to design furniture which could be purchased as a kit and constructed in the buyers home, this concept was established in “1953 and was known as the flatpack method” (IKEA, us and heritage, 2021). This helped Ingvar business come to life as his consumers realised that they could purchase quality furniture that is designed to have a modern Scandinavian look at a very low price. By gaining enough exposure as well as investors, Ikea was able to expand and open up new stores all around Scandinavia that looked like warehouses as it was easy to store the “knockdown” kits (Vahlne, J.E. and Johanson, J., 2017.) However, in the 1960s Ikea started to give its consumers more of a luxury experience by offering them coffee and cold dishes. Through this, they “opened their first kitchen in the 1960s''(IKEA, us and heritage, 2021) and started to serve western inspired food such as hot dogs and burgers which allowed consumers to feel like they were in a different part of the world. Fast forward to the 1980s, Ikea’s world expansion is moving along successfully as the “company continues to enter foreign markets''(Today, Study and July 21, 2021), this led their consumers to figure out that “IKEA has a strong culture” (Beijerstam, E. and Berglund, J., 2010 and this “spread worldwide” (Beijerstam, E. and Berglund, J., 2010). This led Ikea to become globalised as Ingvar opened stores in France, Canary Islands, Saudi Arabia and more all in the mid 80s, due to this worldwide development coming along very profitably, the business was

able to further open up in other new markets. Conversely, Ikea faced many challenges when wanting to expand in the US “1985” (Yaw, W.K., 2018.), the store created was approximately “15,700 square meters” in “Philadelphia, Pennsylvania''. (Yaw, W.K., 2018). Ikea wanted to test their method of the “European retail concept”, Ingvar's experiment paid off as this “method and outlook succeeded in the US market” (Rugman, Alan M. (2000). The American consumers were so responsive to Ikeas “innovation ideas and merchandise” compared to their own European market. This test was very useful as it helped Ikea make a stand in us, helping Ikea build a worldwide empire.

IKEAS’s Corporate National Identity National identity can be described as a country’s own construction of its external image or reputation that is usually influenced by a nation’s history, its unique culture and the how a nations core values which they have been labelled, associated with, or naturally developed overtime (White and Kolesnicov 2015). However corporate national identity in the 21st century has become a very fluid and highly debated topic. This is due to the modern world and the implementation and success major companies have had in respects to globalisation. Globalisation has caused companies to branch out and become global where some would argue the consequences of this have caused companies to lose some of their key national values and identity (Jack and Lorbiecki 2007). The who is us debate, commonly referred to the Reich and Tyson debate aims to debunk the complex and subjective nature of whether having a corporate national identity really matters in today’s modern world which has been revolutionised by globalisation. Reich argues that today a nation's identity is not relevant contending that companies and ‘us’ refer to who your workforce employs. Companies today are scattered globally which in fact makes the importance of where the main headquarters are located as an obsolete viewpoint when pinpointing corporate national identity and due to globalisation. Tyson debates that who is us does not lie in your workforce it still relies on companies’ natural ownerships and its origins of birth are in fact relevant in the long run. Ikea which we know is a company founded through Swedish culture has a highly distinct and marketable corporate national identity with its stereotypical Scandinavian style and design. Slick and stylish are commonly associated with Ikea due to its historical heritage. Ikeas own website attempts to immerse itself and benefit from this positive brand image touching on Swedish values ‘being open, innovative, caring and authentic’ (Ikea 2021, para 2. Ikea drawing on its Swedish nostalgia is a highly intelligent and easy way for them to take advantage of its country’s positive values and reputation with the purpose to forward its business and expand its power and authority over the market worldwide (Lindqvist 2009). On face value Ikea looks and feels like a Swedish company to the core, however is this entirely true? It is well known that Ikea is a large multinational company with many stores around the world. Why does Ikea then main business headquarters reside in the Netherlands. In today’s modern society companies are always looking to operate at peak efficiency and find ways to minimise production cost in a corporate socially responsible

manner. The idea behind Ikea's move to the Netherlands has to do with policies in this country. It is a well known fact that the Dutch have one of the lowest tax rates worldwide promoting big business and billionaires to operate out of this country to maximise its earnings, however this has also been attacked as a tax evasion strategy (Evers, Miller, and Spengel 2015). This strategy from Ikea highlights the fluidity or lack of a definitive answer about who is us in regards to Ikea. Ikea which portrays itself as Swedish to the core resides in the Netherlands which heavily contradicts its marketed and portrayed national identity. This represents how Ikea adopts a hybrid model where it aims to take advantage of its positive Scandinavian brand image whilst also having the smarts to be fluid and adaptable with the purpose of expanding and making Ikea the best business it possibly can be. It has been established that Ikea has the intent to exploit its riches due to its positive national values. One of these values Ikea aims to encapsulate is innovation. An example of this is how it revolutionised packaging. Flat packaging has many benefits as it is both cost production effect as smaller packages means more packages can fit into inventories making transport of goods to be done at a much higher efficiency and secondly its lack of waste. The Scandinavian world is recognised as pioneers when it comes to environmental sustainability and Ikea, originating from Sweden has smartly engaged in actions around waste to further benefit from its brands and national identities and positive public relations. However as we know Ikeas is a multinational business that aims to penetrate into as many markets as possible. One market Ikea struggled to penetrate was the Chinese market. Ikea struggled due to how its business model and how it did not mesh within Chinese culture and traditions (Giunta 2016). Ikea’s products are slick, well designed, and cheap however they are not durable and long lasting. This is done purposely in order to get customers coming back, constantly upgrading and buying the newer or newest models. Also Ikea had to change its store’s location from traditional areas to the outskirts of the cities where the Chinese use public transport far more frequently than other countries and markets. In the end Ikea adapted its business operations and eventually succeeded in penetrating the Chinese market. This is very telling that Ikea would deviate and defer from its core values and traditions with the purpose of fulfilling a need and ultimately adapting to its market. This shows that even though Ikea is a Swedish company it will contradict its national identity to make the business profitable. Again modern companies have complex national identities. Ikea choses to extract the positives from both its core national stereotypes and values while also being adaptable with the goal to grow and expand on a global scale.

IKEA Today The holding company of INGKA controls a large number of Ikea outlets. Also, the company is covering the current forward-thinking of Ikea ideas and maintaining it in the modern initiative. There are some themes and values similar as the Swedish values like the ecofriendly and corporate social responsibility. Also, the company is specific, the headquarters in the Netherlands. They have a partnership with the non-organizations and major headquarters and stores are located in the Netherlands to achieve the value to avoid the highest tax and gain more profit (INGKA Company, 2021). In the supply chain, Ikea uses the way of sustainable supply chain management to manage the supply chain, since Ikea is a global firm, it has the centre of manufacturing and

distribution around the world. Also, the supply chain is large and complex, their operation process using the system of sustainability. The vision of Ikea is creating a better life for many people, also the concept of Ikea is offering a cheaper price to provide well-designed and home furnishing products that are functional to ensure the people can afford it. They also improve the supply chain to build supplier relationships in the long-term and investing the production for automated and producing large volumes (Laurin & Fantazy, 2017) In the Ownership, the Stitching foundation of INGKA is managing the Ikea, which leads the Ikea to need to change the structure of ownership. It is called three legs, Ikea group (blue group), Inter Ikea Systems (red group), and IKANO group (green group). In the green group, the Kamprad family is managing the IKANO. The group of red and blue are owned by the holding BV of INGKA (Tarnovskaya & Chernatony, 2011). The owner of the red group is using the Ikea concept and brand name of Ikea. This part is essential for the organization, it leads the role and is important in the process of Ikea replication. The revenue of the Ikea store has three percent is paid to the system of Inter Ikea to avoid the difficulty of the economy. Moreover, INGKA Holding BV is the biggest company in all of the Ikea group. It includes the group of industries in the Swedwood, they also do the function of purchasing and supplying, operating the furniture of Ikea in the manufacturing, and retailing and using the IoS for the design, developing the new product in the Ikea for selling. INGKA Holding BV is owned by the foundation of Stichting INGKA (Jonsson & Foss, 2011). Ikea is one of the most successful retailers and has the largest retail chain stores in the global market. They always carried out the operation philosophy of ‘provide well-designed and fully functional home decorations at extremely low prices, which are affordable to as many people as possible. It is revolutionized to change the consumer's thinking model, convenience flat-pack and new fashion lifestyle have led to the company's attention on consumer convenience and irrational consumption psychology, it means the furniture can be put away or recycled at short notice when consumers want to change other style products or old product trade-in. This business model must strictly enforce the product design, purchase, package, and distribution four parts and successful use into the low-price differentiation model of goods competitively. Low-price Ikea should have created innovation and pursued a low costs sustainability strategy. On the other hand, Ikea goes through to optimize the supply chain, operation, and stock control to support the low costs product. Also, Ikea management always keeps the core value and puts the consumers and society on the first level. Due to the COVID-19, Ikea has serious economic problems that the store was closed for many weeks, but the digital development and store transformation service are continuing (Ingka Group 2020). Online shopping is an important step in the business operation strategy. Also, Ikea has increased the investment budget to innovate companies that study renewable energy sources. It was aimed to provide a service excellence and innovation (SEIB) model to the customers and protect the sustainable environment on the earth (Bo Edvardsson & Bo Enquist,2011). Sustainability development is the core focus of future work and now. Company management hopes to lead the people to have a healthy and sustainable lifestyle, it is evident the Corporate Social Responsibility (CSR) with Ikea has affected a determinate positive role. Ikea applies to go through innovation and initiative to reduce environmental pollution and use renewable energy to achieve the renewable economy. Therefore, they also take measures like energy-saving and emission-reducing lighting to reduce the polluted. Its function as the model in business communication with competitors. Ikea opposed cheap labour and fought for children’s rights, united with UNICEF

to create a better life for Indian people. The behaviour increased the brand loyalty with consumers and society and made a profit with the stakeholders in the future and nowadays. Drive the Ikea CSR development at the same time, although their partnership with nonprofit organizations and the located in the Netherlands as well as know ‘tax haven’, Ikea values become more about profit and tax avoidance (Evertsson, N). As a result, Ikea's image and CSR become dangerous and negative. Many countries have imposed new tariffs and other restrictions on imported furniture in recent years. They were led to increasing trade barriers and product costs problems. Thus, it has a negative influence on global sustainable development and economic cooperation with each country. However, Jesper Brodin, chief executive of Ingka Group suggests buying a share certificate in this place might be helpful for the price of the product. Despite the fact that the product came in which country, using the challenge of weather change and sustainability development satisfied the demand seriously in the future. Today’s Ikea strategy wants to continue to be a pioneer in this field like most of the Scandinavian countries around the world in recycling and reducing the environmental impacts and becoming one of its trademark CSR initiatives. On the operation system, they also attend to digital development and use a lot of budget as an online store. Whether from a moral perspective or commercial view, Ikea retail industry in today or future both will be important economic support on the territory industrial chain. Conclusion In conclusion even though Ikea has heavy and strongly marketed origins relating to a Swedish background it is not entirely a Swedish company. Ikea can better be described as a company who has used its core values and Scandinavian stereotypes to set a foundation and positive brand whilst diversify and expanding into global markets. Quite simply Ikea is a global multinational company based on its Swedish values but has grown to be bigger than just Swedish. Ikea’s hybrid and multinational identity has been supported through analysis of its history starting from its Swedish heritage when it was founded to eventually breaking out and expanding or more so shedding these values and stereotypes when required. An example of this lies in their struggle to successfully penetrate the Chinese market. At first Ikeas values and core business structures of their slick designs and convenience did not quite reflect what the Chinese market as they wanted more durable and simple designs. However as highlighted in the analysis its learnt that Ikea overcome this by adapting its values and culture around its markets rather than its own. At its core Ikea closely and openly links itself with its proud Swedish heritage however operates its main headquarters out of the Netherlands which again highlights its complex and varied corporate national identity. Political factors such as the Netherlands being a tax haven of the world again emphasis Ikea’s desire to separate itself from being an out and out Swedish company in its pursuit of being more profitable and efficient within its business operations. As argued Ikea is not solely a Swedish company however it does extract and benefit from exploiting from the positives of being associated with this. It also understands that to be a successful company your corporate national identity must not be pigeonholed to one country and that adapting values and cultures in order to benefit Ikea as a whole is in fact the logical and correct decision. A best of both world approach means Ikea is not entirely a Swedish

company, but that is how it should be. Ikea’s ‘us’ is not black and white, but it usually never is in today's modern society revolutionized by globalization which has completely transformed how company operators worldwide forever....