RECOMNDATIONS FOR IKEA FIRM 1
IKEAcompany started back in 1943 as a mail-order sales business.Its corefounder was Ingvar Kamprad.IKEA started selling furniture in 1958when it opened its first store in Sweden.In 1963 the company hadgrown and opened more branches outside Sweden. IKEA is an acronym ofthe founder and his home time where he grew up that is Ingvar KampradElmtaryd Agunnaryd. IKEA designs and sells furniture( such aschairs, bed), appliances and home accessories. It is one of thelargest furniture dealers. The company is well known for the mostmodern arterial designs for different types of furniture andappliances. IKEA is known to operate 389 stores in 48countries as atSeptember 2016. The company has good cost control, continuous productdevelopment and excellent operational details that have led to itsgrowth and success. The company offers unique services that haveresulted in its popularity such as play areas for children as theirparents shop.
Strategyformulation leads to the success of any business since it providesthe company with a framework to use in the achievement of desiredgoals. , Proper strategy formulation helps in curbing most challengesthat lead to business failure and frustrations. IKEA has shown areduction of sales in the recent years which have been brought aboutby a decline in economic conditions and lack of strategic direction.
Thereare a few challenges that IKEA is facing, and as a result, they havecontinued to create retardation in standards of goods and servicesproduced by the firm. IKEA is worldwide and diverse regardingculture, and this means different cultures require differentspecified products. The large size of IKEA has made it lose controlover the standard and quality of goods. The set standard by thefounder has fallen leading to a reduction in the growth of sales.There is a need for balancing quality and low prices. Most clientswant low-cost commodity of good quality. The company`s expansion insome countries like India has brought stipulation with the governmentover poor quality and standards sine they want the goods producedfrom their country. When a company grows the corporate culture widelybecomes thick, and so is IKEA. The founder of IKEA cannot have enoughcontrol over the business, so there is need of employing traineestrained by the founder as managers. Low standardization and qualitycan be brought about by the lack of innovation. Inadequate youngblood causes lack of innovation in the organization, and this leadsto the production of the same goods over time since there is nochange and production mainly depends on the same group of people.
Secondly,culture is another big problem facing IKEA, and this makes it hard tomaintain the Swedish values in a global network. It is hard to keepthe culture which is based on “Swedish small town values” overmany countries. The environment in which IKEA is operating from isvery complex and less stable depending on the country from which itoperates. Recently, IKEA is operating and growing in uncertainenvironments like emerging economies which are offering expansionopportunities.
Thereare several recommendable strategies to help resolve the problemsfacing IKEA. For instance, broadening the criteria followed whenemploying people. There should be a strong emphasis on employment ofindividuals from different cultures and backgrounds as this wouldensure cultural diversity hence ease expansion globally. Hiring moreSwedes with the social ethics and posting them in other countrieswill help in ensuring the rich culture is maintained. IKEA shouldmake sure there is the diversified employment of people of all agesto allow innovation and quality of the product. In future IKEA shouldundergo cultural shift and maintain the innovative and creativefeatures of the product. This will ensure more stability. IKEA shouldchange its culture on beliefs of its furniture this is because, overtime, people change their taste and preferences. This means they endup requiring new furnishing for their homes.
Thecompany founder should have full control of the management. This willensure issues on product quality will not arise. The productsquality should always be maintained no matter what since it highlyinfluences customers’ feelings. Poor quality of goods tarnishes thecompany’s image. Strategic universal set standards will help in themaintenance of a good reputation in all the markets. For example, inthe case of IKEA, all the products should meet the company’sdifferent standards that will ensure the smooth running of businessin all their markets. Standardization should be in all stages of theproducts from manufacturing, packaging, customer relation andmarketing. This aspect of standardization will ensure customerrelations.
Inconclusion, IKEA is one of the companies that has maintained itsmassive growth over time. It is a global company with Swedish rootsand values, yet it has continued even in emerging markets. Thecompany is facing some new challenges due to its expansion. Thecompany is supposed to embrace change for it run more smoothly. Forinstance, it will be a necessity to embrace cultural change andimplement it. This includes embracing innovation and creativeness tothe actual Swedish values. This will make it possible to venture intoa new market and maintaining the firm’s standards.
Daft,R. L. (2015). Organizationtheory and design.Cengage Learning.