NINEVEH ACADEMY

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SENIOR HIGH SCHOOL DEPARTMENT

The Organizational Structure of IKEA Business, a Swedish company manufactures

furnishing furniture products that are natural and radiant for home use.

In fulfillment of the requirements for the subject of

Organization and Management

Submitted by:
Althea Anne A. Cordora

Presented to:
Ms. Gretchen Acosta

S.Y. 2022 - 2023

Althea Anne A. Cordora
Address: Blk 32 ,lot 5 Tierra Nevada Ph2
Number: 094604856781
Email: 2022cordoraalthea@nlci.ph.education

Educational Background:

Strand: ABM (Accountancy, Business and Management)

(2022 - 2023)

Secondary: Gov. Luis A. Ferrer Junior East National High School

(2021 - 2022)

St. Aloysius Gonzaga Integrated School

(2018 - 2021)

Primary: San Francisco Elementary School

(2013 -2018)

Nineveh Academy
(2012 - 2013)

Personal Information:
Date of Birth: December 13, 2005 Mother’s name: Anashey A. Cordora
Age: 17 Occupation: Housewife
Gender: Female Father’s name: Robert John L. Cordora
Religion: Roman Catholic Occupation: Financial Advisor
Civil Status: Single Language: Filipino
History Background

In 1943, then-17-year-old Ingvar Kamprad founded IKEA as a mail-order sales business, and began to
sell furniture five years later. The first store was opened in Älmhult, Småland, in 1958, under the name
Möbel-IKÉA (Möbel means "furniture" in Swedish). The first stores outside Sweden were opened in
Norway (1963) and Denmark (1969).The stores spread to other parts of Europe in the 1970s, with the first
store outside Scandinavia opening in Switzerland (1973), followed by West Germany (1974),Japan
(1974), Australia, Canada (1975), Hong Kong (1975), Singapore and the Netherlands (1978). IKEA
further expanded in the 1980s, opening stores in countries such as France and Spain (1981), Belgium
(1984), the United States (1985),[31] the United Kingdom (1987), and Italy (1989).Germany, with 53
stores, is IKEA's biggest market, followed by the United States, with 51 stores. IKEA entered Latin
America in February 2010, opening in the Dominican Republic. As for the region's largest markets, on 8
April 2021, a store was opened in Mexico City. In August 2018, IKEA opened its first store in India, in
Hyderabad.

In November 2021, IKEA opened its largest store in the world, measuring 65,000 square metres (700,000
sq ft) in the Philippines at the Mall of Asia Complex in Pasay City. On 10 August 2022, IKEA opened its
first store in Chile. This is its the first store in South America. Another store is expected to open in
Colombia by 2023, soon to be followed by a store in Peru. In March 2022, IKEA announced the closing
of all 17 stores in Russia, resulting from the 2022 Russian invasion of Ukraine, the first market in which
they suspended business. However, Ingka also owns 14 shopping centers across Russia operating under its
Mega brand. These will remain open. Due to the ongoing war and unimproved situation in Russia, IKEA
said on 15 June that it would sell factories, close offices and reduce its work force.Later it became known
that IKEA does not plan to sell its business, but expects to return to Russia within two years. About 700
people will continue to work for the company during this period. By October 2022, IKEA laid off about
10,000 Russian employees.

IKEA was hit hard by COVID-19 due to lockdown in various countries, like in the UK and Canada.
Because demand had fallen, its annual catalog ceased publication after 70 years in print. The prices of
their products have risen significantly in 2022 due to rising costs and inflation. In April 2022, IKEA has
shut down one of its stores in Guiyang when sales took a significant hit from the pandemic. Due to strict
COVID-19 lockdowns in China, IKEA is considering closing another store in Shanghai by July 2022.
IKEA is also facing stock shortages and shipping problems that may continue until the end of 2
People in the Organization

Jon Abrahamsson Ring, CEO

Jon joined IKEA as a trainee in IKEA Örebro. After a year, he moved to IKEA Canada and worked
there for four years as logistic manager, sales manager and project leader/store manager. He then became
the assistant to Ingvar Kamprad and Anders Dahlvig (CEO at the time). In 2006, he moved to IKEA
China as the deputy retail manager.

In 2008, Jon left IKEA, moved to Stockholm and joined Filippa K (fashion brand) as the group CEO. In
2013, Jon took on his current position as group CEO of Plantagen (Plants/flowers brand). Jon has also
been a board member of Net On Net (e-com in home electronics), Designtorget (design retailer) and the
INGKA group. We are just in the beginning of designing IKEA for the future and will now accelerate our
efforts to develop a more dynamic and vital Customer meeting at IKEA, both on and offline.

In this context, Jon’s main assignment will be to lead the development agenda for the IKEA Customer
meeting, together with colleagues in IKEA Concept and partners in the IKEA Franchise system. Jon will
further lead the work to review how we lead, work and organize throughout IKEA with the ambition to
simplify and amplify our development efforts for the Customer meeting as ONE IKEA. This will be done
with the IKEA Franchise System as the foundation and Jon will take full leadership from Inter IKEA
Systems supported by his position as Deputy CEO.

Jon’s profound knowledge and experience from the retail business, both at IKEA and in other companies,
will be of great value when we now take next steps. His ability to lead both business and people, by
combining strategy and execution in an engaging way that delivers results, will strongly contribute to the
development of IKEA.
 Martin van Dam, CFO

Martin van Dam started his finance career in 1989 at Ernst & Young (today EY) in the Assurance
practise, while completing his audit & accounting studies.

After 21 years in international audit and advisory assignments, of which 2 years in Melbourne, Australia,
he started his IKEA journey in the field of Risk Management & Compliance and later led various Finance
& Controlling functions. In November 2015, Martin joined Inter IKEA Systems BV as CFO to prepare
for a new structure to combine the franchisor responsibilities with the newly acquired range & supply and
industry businesses.

He now holds the CFO role for Inter IKEA Group and leads the finance, risk, legal and compliance
activities of the Group. Martin is Dutch. He is married and has a son and a daughter in their teens. Martin
has an education in Finance combined with a Dutch CPA title.

Fredrika Inger, Core Business Range Manager

Fredrika Inger started at IKEA about 20 years ago after receiving her Master’s degree in Industrial
Engineering at the Chalmers University of Technology. Over the years, Fredrika has had the opportunity
to work in almost all parts of the IKEA value chain – close to customers as Market manager and close to
IKEA suppliers. In her most recent roles as Global Business Area Manager and Range & Product
Development Manager, Fredrika has led business areas and set strategic directions in product, range and
business development.

As Global Range Manager, Fredrika is proud to be leading IKEA of Sweden – the product development
centre at the heart of IKEA in Älmhult, Sweden and the business areas connecting the IKEA value chain,
bringing the IKEA vision to the many people through the IKEA product range. The IKEA vision of
creating a better everyday life is one of Fredrika’s strong driving forces and motivation. Her true passion
lies in exploring real life at home, curiosity about the many people, developing better products and
optimising value chains – together with passionate and purpose-driven people across IKEA.

Göran Stark, Digital Manager

Göran Stark is Digital Manager at Inter IKEA Group and a member of the group management team. He
has accumulated broad experience across product development, purchasing and other functions over the
course of his multiple decades with IKEA. Previous roles in which Stark has served include Global
Supply Chain Manager and various investment and development roles.

Operations Background

Since its inception in Sweden in 1943, IKEA has offered affordable, high-quality furniture to the masses.
Today, IKEA is the largest and most valuable furniture retail chain globally, with over 400 locations
operating in 52 countries. From the comfortable showrooms navigating customers through a labyrinth of
product displays to the innovative thinking that created flat packing and ready-to-assemble furniture,
IKEA’s success relies on efficient and effective operational management solutions.

Through tight control over operational efficiencies in the design, production, supply chain, and
distribution processes, IKEA has been able to keep consumer and manufacturing costs low while growing
the company on a world stage. IKEA perfectly demonstrates the power and significance of operational
management systems to elevate a business and optimize its workflows.
IKEA utilizes a unique and innovative environment for its retail locations. Each building functions as
both a store and a warehouse. The first and second floors consist of stunning showrooms displaying the
assembled products, while the pallet floor serves as a storage facility for products in stock. By merging
retail locations with warehouse facilities and a self-service model, IKEA is able to reduce distribution and
product storage costs to maintain a competitive edge.

IKEA’s operations management controls in-store logistics to manage these integrated facilities and
support an efficient flow of goods. Each retail facility has an in-store logistics manager and a store goods
manager who are responsible for the ordering and material handling processes, respectively. Together,
they work to balance customer demand and inventory management while maximizing profits.

Management Background

In order to fulfill this business model, IKEA had to create a supply chain that could undercut the
competitor’s price, while still fulfilling their quality promise to their consumers. IKEA’s stores became
massive warehouses, where customers selected furniture from showrooms and picked up the final product
from the actual warehouse shelves, allowing IKEA to cut down on its handling and transportation costs.
Combined warehousing and retail space also meant that the company did not have to maintain an
excessive amount of real estate and bear the associated costs.

As a result of the minimalist design, the basis of all IKEA furniture became the all-purpose particle board.
Through a massive vertical integration strategy, IKEA became one the largest consumers of wood in the
world, and built a plants capable of pulverizing wood into dust and manufacturing many multipurpose
boards at one time. The particle board also allowed IKEA to minimize the package dimensions of its
furniture, reducing shipping costs, inventory space, and create a product that IKEA’s healthy and fit
Millennial customers could bring home in their cars and assemble themselves.

IKEA also built a seamless inventory management system, where electronic tracking systems maintain a
by-the-minute inventory picture from manufacture to retail. This and other inventory innovations,
included automated loading, pallet-less transport, and a multitude of other small incremental
improvements gave IKEA an edge in minimizing its inventory carrying costs. The following video
demonstrates some of the innovations that IKEA made in its supply chain inventory management and
exhibits that attitude that IKEA has taken towards innovation.
References

This furniture and furnishings company was founded in Sweden by Ingvar Kamprad (b. 1926). In the late
1990s it had almost 130 stores in 30 countries worldwide. The IKEA mail order catalogue, which in 1997
was issued in 39 editions in 31 countries in 17 languages, has become a powerful vehicle for attracting
potential customers for the company's products, many of which are laid out in enticing room settings.
IKEA's philosophy was encapsulated within its marketing strategy maxim ‘We shall offer a wide range of
home furnishing items of good design and function, at prices so low that the majority of people an afford
to buy them.’The origins of the company lay in Kamprad's entrepreneurial activities as a wholesale buyer
and seller of a wide range of everyday commodities to neighbours in his farming community. The name
IKEA was launched in 1943, deriving from the initials of Kamprad's name, town, and region. By 1950 the
company had moved into furniture retailing, an area of corporate activity which assumed an increasingly
dominant role. Even at this early stage IKEA furniture relied on qualities of Swedish heritage
characterized by a use of natural materials, humanizing functionalism, and clarity of form. The first
full‐blown IKEA catalogue was issued in 1951, the first furniture showroom opening in Almhult,
Sweden, two years later. In 1955 the company began designing its own furniture, with the introduction in
1956 of its self‐assembly flat‐pack range—an important ingredient of popular success. The first IKEA
store opened in Almhult in 1958. Another important aspect of the company's succesful retailing strategy
was marked by the addition of a restaurant in 1959, making the shopping experience more relaxing for
those coming from further afield. Subsequently, the provision of children's play areas also became a
commonplace feature imitated by other companies. The 1960s marked a steady expansion with the
introduction of a second IKEA store in Oslo, Norway, in 1963 and the introduction of a self‐service open
warehouse system at IKEA, Stockholm, which opened to huge crowds in 1965. In order to enhance design
standards in 1975 the company hired an outside consultant, Niels Gammelgaard, a Dane. He produced a
number of designs for the company and in the 1980s established Studio Copenhagen as an external design
supplier. It was also in the 1980s that IKEA's corporate identity was radically updated by the Hans
Brindfors advertising agency. The company's expansion gathered pace in the 1970s and 1980s: in 1973
the first store outside Scandinavia opened in Switzerland and in the following decade new outlets
included Saudi Arabia (1983), the USA (1985), the UK (1987); in the 1990s new locations included
Hungary and Poland (1990), the Czech Republic (1991), and Slovakia (1992).
Reflection

Studying the management functions of the company I chose (IKEA) has dramatically helped me
understand the concepts of management that I learned in class. We always found that things are better
understood then applied in reprehensible situations such as case studies and presentations."They made the
concepts of short term and long term goals clearer to me. I was introduced to the interesting idea of
sustainable growth and companies use it to avoid borrowing money from credit loans and banks.
Furthermore I found it interesting that IKEA is planning to become a clean energy company by the year
"they can accomplish that feat using their taste products to their advantage and by using recyclable and
renewable products.that helped me the most to understand the subject was the organizing function.

I found that most of the ideas that were discussed in classholed up in IKEA’s organizational structure.
There is something to be said about affordable furniture that is also attractive. It is possible to furnish an
entire home from top to bottom for a comparatively modest amount. That is not to say that their furniture
does not have other uses, though: Even well-known designers such as Lori Dennis throw an IKEA piece
in the mix when designing an interior. Lighting, rugs, bedding, textiles, and accessories are available to
complement any furniture purchase, and there are also plenty of efficient storage solutions for the entire
home.

IKEA has much to offer for small spaces. For bargain hunters, there is an "As-Is" section in most IKEA
stores, where you can get bargain-priced furniture that has suffered varying degrees of damage, from
imperceptible dings to bashed-in drawers. There are lots of choices for all the rooms in a home: dining
furniture, living room furniture, home office furniture, and furniture for children's rooms is available at
different price points and quality. The furniture is relatively easy to assemble, and you can even find
pieces that don't require tools for assembly. Efficient packaging makes it easy to transport. IKEA is also
paying more attention to sustainability and making their products greener. For instance, the brand has
banned PVC from its products, and reduced formaldehyde from lacquers and glues. The company is also
using and looking to increase the use of new and sustainable materials.