IKEA. The brand history
By The Forex Review - 30 / April / 21 907
Dominick Bell
IKEA is the world's largest furniture retailer. More than 500 million people visit the chain's shops every year.
IKEA has approximately 300 shops in 44 countries around the world. The company combines 42 distribution centres in 18 countries with more than 300 shops and over 1000 suppliers from 55 countries.
The company's main goal is to provide good, functional, modern and affordable furniture.
IKEA has five major factories in Europe.
- in Zbonszyněk, where the largest wooden furniture factory is located; it produces more than 30 million tables, desks and cabinets each year;
- in New Skalmirce, where furniture is finished
and in southern Sweden:
- Jemhult, the company's birthplace and corporate headquarters. This is where all the products are prototyped;
- Kattilstorp - Cabinets are made here, including the famous Billy bookcases;
- Hultsfred - an ultra-modern, fully automated factory that produces particleboard.
Particleboard is the heart and soul of IKEA products
The basic building blocks of IKEA furniture consist of particleboard. The process of forming it resembles science fiction in its sequence of operations. The collected wood material is put into a dryer and the wood is dried at 450 degrees Celsius. The rotating drum contains 40,000 kg of dust and shavings at this time.
The history of IKEA began in 1943 in Småland, a province in southern Sweden. The company was founded by seventeen-year-old Ingvar Kamprad. His business acumen had been apparent since childhood. He built up his first serious business in the match trade. Kamprad bought large packs of matches in Stockholm, and sold one box at a time in his home town.
He invested the money he received from his father in exchange for good grades into his own company. He named the company IKEA - from the first letters of his first and last name, the farms and villages where he spent his childhood. Initially it sold pens, wallets, picture frames, tablecloths, watches, jewellery, stockings and small furniture. The products were delivered in trucks belonging to a local milkman.
The idea to focus on the furniture industry came in 1947. Eleven years later, in 1958, the first IKEA lounge appeared. On an area of 6,000 m2, Kamprad displayed finished rooms and showcased housing similar to what we see in today's Swedish company shops.
Gradually, Kamprad mastered the Swedish market, leading to a boycott by other furniture manufacturers.
In 2014, IKEA is the world leader in the furniture market and still operates as a family business run by the Kamprad family.
Company philosophy
Some of the company's main goals and standards include:
- low price;
- simplicity of furniture, versatility and the ability to fit into many types of interiors;
- functionality;
- good design, which guarantees the longevity of the product;
Achieving and maintaining these standards is possible thanks to:
- The establishment of a strong distribution centre and headquarters where important decisions regarding the company's strategy are taken;
- Commitment to long-term collaboration;
- collaboration with the best designers;
- Extensive quality control.
Flat box
IKEA is known for the self-assembly factor of furniture that is delivered in blocks in brown boxes. This solution not only assists customers in transporting furniture for the home, but also makes transporting and distributing goods more environmentally friendly.
Legend has it that the idea of flat-packaging was born when an IKEA employee tried to fit a drawing board into the boot of a car in 1956. He only succeeded when he unscrewed the legs and other parts.
Quality standards
IKEA laboratory tests are conducted by one of the biggest research and development centres in the world of furniture. The laboratory tests the resistance, strength and durability of new and existing products on the market. Special devices are used to simulate the daily use of furniture, e.g. simulating the movements of people sitting on a sofa, etc. Fire tests are also carried out, in which the behaviour of individual materials in contact with fire is investigated.
Through the stomach into the ... portfolio
IKEA is known not only for its furniture but also for traditional Swedish cuisine. Kamprad once again proved his business potential when, a year after launching the first IKEA hall, he decided to create a restaurant.
Dark clouds over Ikea
The company's image was tarnished by information from the 1990s about Ingvar Kamprad, who confessed to being a Nazi sympathiser. The revelation coincided with a campaign in Israel. It emerged that the IKEA founder was an active member of the Nazi party Socialistisk Svensk Samling (the Swedish Socialist Coalition) in 1948. In statements to the media, Kamprad called this episode the biggest mistake of his life. He also decided to support Jewish organisations financially.
In addition, a former employee of the company published a book in 2010 with the sensational title "The Whole Truth about IKEA", which accused the Kamprad family of being part of a sectarian movement and organising a network of spies. In response to these revelations, the company decided for the first time to disclose its financial results (IKEA shares are not listed on the stock market, so owners are not obliged to provide detailed financial data). Since then, the company has regularly published its financial results.
Real black clouds hung over IKEA in 2012. News went around the world that the Swedish company had used forced labour of political prisoners in the GDR from 1960 to 1980. According to the report, the company's management was fully aware of the practice.
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