IKEA Case StudyIKEA Company, it is necessary to conclude the Ingvar Kamprad was a successful entrepreneur for IKEA because he managed to change the company’s strategy according to the conditions of the competitive market. His charismatic leadership and his unique personality helped to hold the leading position in the market. The company was founded in 1943 and due to its global expansion and effective leadership of Kamprad, today it is one of the well-known companies in the world (EWC Case Studies: IKEA, 2005, p.1). Ingvar Kamprad’s leadership style is charismatic. Moreover, he is influenced by the company’s strategy, business model and structure. It is known that IKEA was founded as a family business, and today the company adheres to the family business concept (Ingvar Kamprad’s Leadership Style, 2011, para.1). One of the characteristics of the family business is that the company’s employees are the part of the large family what influences the employees’ motivation and performance. Kamprad has always been the head of the company that is why the company’s culture is unique. Once he said, “If there is such a thing as good leadership, it is to give a good example” and “I have to do so for all the IKEA employees” (Ingvar Kamprad’s Leadership Style, 2011, para.5). That is why he has always been a successful entrepreneur for IKEA.
IKEA’s case study proves the fact that the key challenges facing by IKEA in today’s competitive market of Europe and North America are concluded in the existence of a great variety of similar furnishing companies for companies like Granny Flat Designs, including Wal-mart, Tesco and Carrefour which try to follow the same strategy as IKEA (low priced strategy). Moreover, rising prices in raw materials as well as transport costs give no any opportunity to sell IKEA’s products at low prices. One more challenge is concluded in the recent economic crisis which reduced the number of customers both in Europe and North America. That is why the major task for IKEA is to keep the company’s growth at the high rate in today’s competitive environment. The company should adjust its strategy for low-income customers in order to take the leading position in the furniture marker. It is necessary to adjust the products to the U.S. market needs because the competitors can easily change the company’s performance (EWC Case Studies: Ikea, 2005, p.5).
I think that it would be difficult for other companies to copy IKEA’s business model which is based on brand, good quality and design of products, and rather affordable prices. It is known that IKEA business model is constantly improving that is why it is effective in the competitive market. The main peculiarity of IKEA’s business model is that it is closely connected with Swedish culture. It is found that all the products sold by the company have Swedish names. Today IKEA is considered to be “a synonym for design at a low price” (Varotto, 2011, p.1). That is why it would be difficult for other companies to copy IKEA’s business model.