The IKEA Mission

1
IKEA Managing Cultural Diversity
Group Name UFOs Group Members Daniela
Derflerová Markéta Fialová Barbora
Hulínová Jana Kubicíková Olga Šrámková
2
The IKEA Facts

• Founded 1953 by Ingvar Kamprad, Sweden
• Expanded soon abroad
• Today over 550 millions visitors in close to 300
  stores annually
• Steady growth by 12 a year

3
Turnover Growth
Source http//franchisor.ikea.com/showContent.asp
?swfIdfacts9
4
Number of Stores
Source http//franchisor.ikea.com/showContent.asp
?swfIdfacts9
5
IKEA operates in more than 35 countries!!!
Current Stores
Near Future Stores
Source http//uberpedia.org/wiki/IKEA
6
The IKEA Way

• Low costs
• Long production lines
• Self-assembly at home
• Self-transport
• Convenient boxes
• Catalogues
• Remaining Swedish (design, management)
• Modern ideals (durable, easy to live with,
  natural and free style, color, joy)

7
Business Principles

• Balanced focus on product range, sourcing, cost
  leadership, distinctive image
• Studying new consumer trends with regard to
  possible value added
• Yin/Yang metaphor
• Durable partnerships with suppliers based on
  cooperation and active contribution to both cost
  reduction and quality enhancements

8
Management Style and Practices

• Informal, open and caring management style
• Hierarchy not emphasized 3 levels of
  responsibility
• Pragmatic approach to problem solving, consensus
  based decision making, discussion, explanation
• learning by doing
• Managers share information, knowledge and skills
• Coworkers should feel important
• Eliminating status barrier

9
Cultural Diversity Issues Germany

• IKEA in Germany since 1974
• Conflicts with companys culture
• dutzen calling co-workers by first names
  (undermining respect)
• Taking on responsibilities for yourself x need
  exactly defined rules and instructions
• Believe Swedish do not assess risks sufficiently,
  too much result-oriented
• Love formality
• Love administrationgt sense of security

10
Cultural Diversity Issues USA

• HR point of view
• Swedish and American managers
• Decentralized or centralized organization
• Responsibility within the organization
• A way of educating American managers
• Treating employees (coworkers)
• ! Ideal IKEA US director American, who accepts
  Swedish culture and has a great understanding for
  the IWAY

11
Cultural Diversity Issues USA

• Local market obstacles
• 36 stores opened since 1985
• USA culture different to Swedish
• Problems at the beginning caused by different
  needs of Americans
• Problems with IKEAs culture
• ! IKEA has to accept a different culture and at
  the same time keep its own. Otherwise it will
  either not succeed on the US market or it will
  not be IKEA anymore

12
Cultural Diversity Issues France

• HR point of view
• Informality sign of weakness or indecisiveness
• In general they need formality in
• rules and hierarchy
• job descriptions and written procedures
• formal training better than learning by doing"
  not perceived as credible)
• Minimum of non- French employees (otherwise
  French customers make complaints- nationalism)

13
Cultural Diversity Issues France

• Other obstacles
• Bureaucracy on retail trade
• Relations with Labor unions- initial distrust in
  IKEAs management style which was seeking
  consensus
• (The style changed in more affirmative one the
  relations have improved)
• Head of IKEA Jean Luis Baillot (Swedish wife,
  worked in Älhmult)
• Different purchasing power

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Comparison of Purchasing Power
Source Damien Badier, Carole Rousset
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Advertising

• Humoristic and chocking style
• UK Stop being so English
• Switz. Stop being such snobs
• USA America is a big country, someone has to
  furnish it
• FR The French need more space, more love, more
  well-being and more purchasing power. For all
  those reasons, vote IKEA
• Sometimes banned
• http//www.youtube.com/watch?vNLZMWoOBOoAfeature
  PlayListp1436C85F22364F0Findex2

16
SWOT-IKEA Way
To which extent should be kept The IKEA Way
approach and to which extent adjustment to
foreign market?

• Strengths
• Unique image on the local market, Swedish style
  (modern and simple)
• Effective strategy in time of global crisis (low
  costs)
• Popular among younger generation
• Quality and eco products at reasonable prices
• Catalogues- convenient

• Weaknesses
• Relatively low adaptation to the local markets
  (USA)
• Lack of Swedish managers abroad gt need of local
  competent managers
• Relatively expensive delivery service
• Often conflicts on top management level, cultural
  diversity issues

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SWOT-IKEA Way

• Opportunities
• Expansion to South America and Asia markets
• Already well establish brand name
• Trainee programs
• Wider range of products
• Cheaper row materials and labor in time of crisis

• Threats
• Global crisis-purchasing power of customers
• Cheap competition copying IKEA style (low prices,
  simple design)

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Conclusions

• In the EU countries no need to significantly
  adjust product portfolio (as opposed to USA)
• Adjustments needed on managerial level policy- in
  order to attract the best local managers
• Introduce attractive Swedish management trainee
  programs
• Find a common talk with local managers, take
  their opinions into account

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Any questions???

• Thank you for your attention!

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Sources

• IKEA Managing Cultural Diversity.Integrative
  Case
• Badier,D, Rousset,C.Strategies adopted in the
  international market, The case of IKEA in
  France.2007.Bachelor Degree Project.University of
  Skövde
• http//bizcovering.com/major-companies/ingvar-kamp
  rad-and-ikea/
• http//www.ikea.com/ms/en_CA/jobs/join_us/index.ht
  ml
• http//www.essays.se/about/ThecaseofIKEAinFra
  nce/
• http//www.ikea-group.ikea.com/?ID11