IKEA is a house furnishing store that have been franchise store.

Their business concept is “We

shall offer a wide range of well-designed, functional home furnishing products at prices so
low that as many people as possible will be able to afford them.”

IKEA was founded (1943) in Sweden and still flaunts its origins—store exteriors are decorated
in the colours of the Swedish flag (blue and yellow), in-store restaurants serve Swedish food,
and the company’s products carry Swedish names—but its headquarters are now in the
Netherlands.

TIMELINE

 In 1943, at age 17, he started the company, putting together its name from his own
initials and the initial letters of his family’s farm (Elmtaryd) and his home village
(Agunnaryd). At first, he sold miscellaneous small articles such as pens and lighters.

 In 1948 he began selling furniture, and in 1951 he published the first annual IKEA
catalogue.

 In 1953, in the town of Älmhult, he opened a showroom where customers looked at

displays and placed orders. The first retail store opened in Älmhult in 1958.

 Flat packing of furniture, introduced in 1956, was a key factor in reducing the
company’s costs and enabling it to cut prices.

 During the late 1950s, IKEA’s unhappy competitors pressured Swedish manufacturers
to cut off supplies to the company. IKEA responded by undertaking its own design
work and by contracting with foreign suppliers, at first in Denmark and Poland. Later
the company set up a manufacturing subsidiary, called Swedwood.

 IKEA became an international retailer when the first store in Norway opened in 1963.

 The company expanded beyond the Nordic countries in 1973, when a store was
established in Switzerland.

 Thereafter, stores opened in many countries, including Germany (1974), Australia

(1975), France (1981), the United States (1985), the United Kingdom (1987), China
(1998), and Russia (2000).

Today customization and new product in market is very important due to customer
demanding for more and consumer market is changing faster. IKEA has strong ideas in
customizing its product to suit the tastes of local markets because IKEA does all the analysis
before venture to other country markets. Initially IKEA was not interested in customizing their
product but when entered US market, IKEA faced customer indifferences so eventually IKEA
decided to customize their product.
The advantages of IKEA selling the product in other countries: less expensive so customer will
afford to buy the product according to the country they are located.

Why is Ikea successful?

 Solving the worst part of buying furniture; As people use to see furniture as an
investment for the next 20 years, they tend to be anxious and indecisive.
 IKEA brings a seminal change in home business by hitting the right demographics;
clever target customers: young people.
 Not expensive but not too cheap.
 Stores are a destination; As e – commerce becomes more popular; shoppers need
incentive to come into stores. IKEA has elaborated showroom and cafeteria.
Is the India market an attractive option for IKEA?

 78.1% of Indians have been elevated from poverty until 2014.

 Size of workforce in India Market is 400 million.
 30% Indian shares the global workforce until 2020.
 362 million populations under 24-year olds live in India. (Young population is the
future of the country; they still have great development potential in India. Therefore,
India is truly an attractive option for idea.)