IKEA, the largest furniture chain in the world, is believed to be poised for massive growth throughout the world in the coming decade, IKEA's ability to provide customers with affordable furniture of the kind they like is the result of the way it expands globally and operates its global store empire. Since its 1943 founding in Sweden, IKEA has offered home furnishings and accessories of good design and function at low prices so the majority of the people can afford them. IKEA's vision is to: "Create a better everyday life for the many people" Its business idea is "To offer a wide range of well designed, functional home furnishing products at prices so low that as many possible will be able to afford them" The IKEA concept is based on their market positioning statement "Your partner in better living. We do our part you do yours Together we save money" and focuses on a commitment to product design, consumer value and clever solutions. By using inexpensive materials in a novel way and minimising production distribution and retail costs, their customers benefit from low prices. IKEA has more than 590 million visitors per year to its stores all addition to the visitors in the stores, some 450 over the world. In million visitors are tracked entering the IKEA website. IKEAs main marketing channel is its catalogue that is distributed world- wide as 191 million copies (in 56 different editions and 27 different languages) displaying some of IKEA's 9.500 different products. Sales for the IKEA Group for the financial year 2009 increased by 1.4 per cent to a total of 21.5 billion Euros. At the end of the 2009 financial year, there were 267 lKEA Group stores in 25 countries stocking everything for home furnishing under one roof. In 2007 the European market constituted 82% of sales, followed by North America with 15% and Asia/Australia with 3%. The IKEA Group has 123,000 co-workers spread across functions such as purchasing, distribution, range, retail support functions and the Swedwood Group (see below for further details). Today IKEAs product range consists of 9, 500 home furnishing articles, designed to be functional and good looking but at a low price. Each item is developed by IKEA of Sweden, which is also responsible for giving each product its unique name, such as BILLY and KLIPPAN. The company designs its own furniture, which is made by about 1.220 suppliers in more than 55 countries. IKEA has 31 trading service offices in 26 countries so production can be monitored, new ideas tested, prices negotiated and quality checked while an eye is kept on social and working conditions. IKEA incorporates environmentally friendly efforts into day-to-day business and continuously supports initiatives that benefit causes. To cut transportation such as children and the environment costs, IKEA uses fat packaging: customers assemble the products at home. IKEAs global approach focuses on simplicity, attention to detail cost consciousness, and responsiveness in every aspect of its operations and behavior. At different stages of functioning, be it recruitment, training, or expansion, IKEA makes sure that its global approach is ingrained into its employees and this has helped IKEA conquer 20% of the global furniture market today.
1. List the various ways n which IKEA has managed the global environment over time.
2. How would you explain the rationale behind the success of IKEA's approach to managing its environment?