Our first company visit of BSM Scandinavia 2011 was to IKEA (Tampines); with the kind permission of the store manager, Mr Roger Lothgren. After a quick lunch of mostly hot dogs, we started the visit proper.
We were ushered into a presentation room where we were introduced to Sweden’s background, traditions, geography, climate and several well-known figures; including ABBA and Björn Borg. A heavily forested (65%) country spanning over a large area of approximately 450,000 square kilometers, Sweden houses a population of just under 10 million people who cares about their nature. And leveraging on this strength, the Swedish company of IKEA was born in the city of Älmhult, Småland.
Founded in 1943 by Mr Ingvar Kampard, the company prides itself on offering user-friendly yet affordable products. IKEA is an acronym for: Ingvar Kamprad Elmtaryd Agunnaryd (derived from founder’s initials and hometown). It’s company vision is “To create a better everyday life for the many people”, and true to its word is IKEA’s marketing positioning statement – “Your partner in better living. We do our part, you do yours. Together we save money.”
The underlying principle behind IKEA products is that they must be reliable, yet affordable to the ordinary man. Part of achieving this involves the process of designing the furniture so that they can be easily assembled or taken apart, so that it could be flat-packed and brought home by individual customers, so that they would not be forced to spend on transport costs for pre-assembled furniture.
Mr Ingvar Kampard, at the age of 86, is still active in managing the IKEA chain of stores around the globe, and has a reputation for visiting IKEA stores on short notice. Mr Roger shared with us his experience when Mr Kampard visited his outlet in Boston some time back. Mr Kampard strongly believes and enforces the foundations he sets for IKEA, such as:
- Upper management must not spend excessively on luxuries, such as first-class air travel or lavish hotels, as these will set a bad precedent, as well as increase costs for consumers.
- Items must not be priced excessively above its Swedish cost, even after factoring foreign exchange considerations, as this will be unfair to customers.
- Staffs are all treated equally, as no person is superior to another. Humility is a strong value within IKEA.
Aside from these principles, IKEA also believes in giving its customers both choice and convenience. It does this by stocking many variations of the same product, and in doing so, offers customers a variety of products to choose from, as well as the convenience of not having to buy these products elsewhere.
With such strong foundations and good business practices, it is no surprise that IKEA performs so well on the global level, and is truly exporting the Scandinavian way of thinking. Its next big step would probably be towards the rising economic powers, such as India and China. All eyes will be on IKEA, as the world is interested to see how IKEA tackles the cultural barriers in these two developing giants.
– Ho Bao Yuan