Strategic Management - Ikeas Idea of Strategy - Essay Example

Ingvar Kamprad, a dyslexic, established IKEA in Almhult, Sweden at the age of 17. The ownership is under a Dutch-registered foundation which is run by the family of Ingvar Kamprad. The owner and franchiser are Inter IKEA Systems B.V. which also holds the IKEA trademark and the IKEA concept. The mother company of IKEA Group of Companies is INGKA Holding B. V., who is also the owner of the Swedwood Industrial group and is owned solely by Stichting INGKA Foundation which is registered in the Netherlands.

The said IKEA concept is based on different functional home and furnishing products that are sold at cheap prices – enough to make it affordable to many people because the concept aims to cater to the needs of people to have a good life by having a nice and comfortable house. The IKEA Concept is still maintained up to now and can be seen through the transaction of every business. IKEA has also the idea of getting out of the status quo of producing high-quality materials at a high-end price and producing low-quality products at low prices.

For them, it is better to produce high-quality products that are affordable. This is possible according to IKEA through having devices that are cost-efficient and innovative at the same time. With this thinking, IKEA is successful in creating good products with nice designs at affordable prices. The IKEA brand has complex ownership because it is owned by so many companies and foundations. Then those companies which are considered retailers pay 3% royalty of the total sales to the original owners, which is the Kamprad family.

The distribution of products is made through different outlets around the world. There are 251 stores which can be found in 34 countries dominantly in Europe, United States, Canada, Asia, Middle East, and Australia. The countries which have the first IKEA store are Sweden (1958), Norway (1963), Denmark (1969), Switzerland (1973), Germany (1974), Australia and Hong Kong (1975), Canada (1976), Austria (1977), Netherlands and Singapore (1978), Spain (1980), Iceland and France (1981), Saudi Arabia (1983), Belgium and Kuwait (1984), United States (1985), and so on.