IKEA
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IKEA is a Swedish home furnishing retailer. It has 202 large stores in 32 countries as of winter 2004. Most are throughout Europe, the rest are in the US, Canada, Asia and Australia. The IKEA Catalogue, containing about 12,000 IKEA products is reputedly the second most widely distributed book after the Bible with a hundred million copies produced every year.
IKEA is pronounced ee-kay-uh (IPA ) by Swedes and other continental Europeans. In the English-speaking world it is pronounced "eye-KEE-uh", (IPA ) rhyming with the word "idea".
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History
The company was founded by Ingvar Kamprad at age 17 in 1943. The name is a composite of the first letters in his personal name, the names of the property and the village where he grew up: Ingvar Kamprad Elmtaryd Agunnaryd. This acronym was possibly chosen because it was similar to the Greek word oikos (house), and to the Finnish word oikea (correct).
Originally IKEA sold pens, wallets, picture frames, table runners, watches, jewelry and nylon stockings or practically anything Kamprad found a need for that he could fill with a product at a reduced price. The first furniture was introduced into the IKEA product range in 1947 and in 1955, IKEA began to design its own furniture.
At first Kamprad sold his goods out of his home and by mail order, but eventually a store was opened in the nearby town of Älmhult. It was also the location for the first IKEA "warehouse" store which came to serve as a model for IKEA establishments elsewhere and in 1963 the first store outside Sweden was opened in Asker, a Norwegian municipality outside Oslo.
As a result of the sliding value of the U.S. dollar, Kamprad has now (according to Swedish news sources) overtaken Bill Gates to become the richest man in the world. Yahoo news (http://in.news.yahoo.com/040404/137/2cdva.html) However, IKEA denies this assertion, saying that IKEA should not be counted as part of Kamprad's assets as he no longer owns the company. Forbes magazine continues to list Gates as #1, placing Kamprad at #6.
Products
IKEA furniture is well-known for its modern (often unusual) design, and because much of it is self-assembly furniture (also known as "flat-pack"), is designed to be assembled by the consumer rather than being sold pre-assembled. IKEA claims this permits them to reduce costs and use of packaging by not shipping air—the volume of a bookcase, for example, is considerably less if it is shipped unassembled rather than assembled.
IKEA has also pioneered the use of more sustainable approaches to mass consumer culture. Its founder calls it "democratic design," meaning that the company applies an integrated approach to manufacturing and design (see also environmental design). Responding to the explosion of human population—and material expectations—in the 20th century, the company has mastered economies of scale, capturing material streams and creating manufacturing processes that hold costs and resource use down. The result is flexible, adaptable home furnishings, scaleable both to larger homes and the increasing, yet generally ignored, number of smaller dwellings. IKEA prides itself on creating a new approach to consumption—one not driven by conventional U.S. or European approaches to home furnishings, and focused on a frugal, yet conscious, aesthetic.
IKEA has also expanded their product base to include flat-pack houses, in an effort to cut prices involved in a first-time buyer's home. The product, named BoKloks was launched in Sweden in 1996 in a joint venture with Skanska. Now working in the nordic countries and in UK, sites confirmed in England include London, Manchester, Leeds and Liverpool. [1] (http://shopping.guardian.co.uk/household/story/0,1587,1403793,00.html)
Store Format
Newer IKEA stores are usually very large blue boxes with few windows. They are often designed around a mandatory "one-way" layout which forces consumers to traverse nearly all parts of the store before reaching the cashier or check-out stands. The sequence involves going through furniture showrooms (showroom) and housewares (market-hall) first, then the warehouse where one collects flatpacks for products seen in the showrooms, and then the cashier.
This design has the advantage of making consumers encounter IKEA products which they might not have thought to look for, but has the disadvantage of inconveniencing consumers who already know what they want to buy and just want to return to the warehouse area.
Recently, in some stores, shortcuts have been introduced between various sections, making travel time though the store much shorter if necessary. However, though they may be indicated on store maps, these shortcuts are often not obvious so an inexperienced IKEA shopper is likely to overlook them and travel through the whole layout of the store.
Whilst the original design involved the warehouse on the lower level and the showroom & markethall on the upper, some stores (including the Leeds, UK store) are single-level bungalow-style stores. Some operate separate additional warehouses for the larger or less popular flatpacks to keep the size of the customer warehouse down (and therefore less daunting) and allow more stock to be kept on-site at any given time. Unfortunately this occasionally results in customers unable to find the goods they paid for at the cashier without direction from staff and the impression of queueing twice (once at the cashier, once at the external warehouse), although there are few complaints about being able to collect goods quicker from the customer warehouses.
Many stores include restaurants serving typically Swedish food. The restaurant area is usually the one place in the store where there are large windows. Outside of Sweden these restaurants are sometimes complemented by mini-shops selling Swedish-made, Swedish-style groceries. As would be expected with IKEA, you can buy IKEA's specialities, such as Swedish Meatballs, in parts (i.e. the ingredients) at these stores and assemble it (i.e. simple, straightforward food preparation) at home.
Transportation Issues
Like all big box stores, IKEA stores draw consumers from a very large area. Because they are perceived as fascinating and exotic in the U.S., they often draw consumers from out of state. In turn, the handful of American cities which accepted IKEA stores were delighted by the subsequent surge in sales tax revenue, and dismayed at the accompanying surge in traffic congestion.
For example, when an IKEA opened in 1999 in Emeryville, California, the traffic was so severe that most local traffic lights were rendered useless. Emeryville police were forced to manually direct traffic daily for three months (for which they were reimbursed). When an IKEA opened in Tempe, Arizona in 2004, the traffic jams on Interstate 10 were so severe that the Arizona Department of Public Safety had to close the nearest off-ramp to the store just to spread out the traffic among other nearby off-ramps.
IKEA's most popular store in Brent Park, London frequently has traffic jams on the weekends.
The new store opened in Edmonton, North London at midnight on 10th Feb 2005. It attracted over 6,000 visitors and resulted in a number of casualties as people were crushed in the rush to get around the store. The store was closed to allow time for adequate policing (due to the customer overflow only 2 officers were on site for the launch) and to evacuate the six wounded. The store was re-opened at 5pm with no additional incident.
Corporate structure
IKEA operates on a franchise basis. Despite IKEA's Swedish roots, the owner (franchisor) of the IKEA concept is a Dutch company, Inter IKEA Systems BV. The operator (franchisee) of the majority of the stores worldwide is a separate entity, the IKEA Group, a private group of companies owned by a Dutch charitable foundation. INGKA Holding B.V. is the ultimate parent company for all IKEA Group companies, including the industrial group Swedwood. INGKA Holding BV is wholly owned by Stichting INGKA Foundation, which is a foundation registered in the Netherlands.
This complicated structure is seen by some as a method to avoid Sweden's high taxation.
Diversity
IKEA was named one of the 100 Best Companies for Working Mothers in 2004 by Working Mothers magazine.
See also
External links
- IKEA (http://www.ikea.com/) - Official site
- IKEA Group corporate site | about ikea | how IKEA works (http://www.ikea-group.ikea.com/corporate/about_ikea/organized.html)
- Ikea Advertising Campaign (http://elitedesigners.org/)
Data
- Yahoo! - IKEA International A/S Company Profile (http://biz.yahoo.com/ic/42/42925.html)
Directory
- Store addresses and contact details are on Yellowikis/Ikea (http://www.yellowikis.org/wiki/index.php/Ikea)ca:IKEA
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