Ikea Organizational Development Paper:

1888 Words Dec 4th, 2012 8 Pages
Organizational Development Paper:
IKEA
* Joe Purdoff
CMB 533
Human Resource Strategies
June 18, 2012

IKEA is at the top of the world’s leading furniture retailers, and has set new standards for competitiveness in household furnishings. The company has achieved this position by redefining the roles and interactions between the firm and its customers. Founded in 1943 by a poor Swedish farmer named Ingvar Kamprad, IKEA is now one of the largest furniture retailers in the world. From its inception, Kamprad wanted to create cheap, quality furniture that everyone could afford. This formula led to IKEA’s early success in Sweden and has carried over until today. IKEA's positive HR policies have supported a strong and
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These showrooms help customers envision how the furniture will look in their own dwelling space. Plus color coordinated cards provide design tips and information kiosks are on hand to help customers (IKEA.com). All of these features reinforce IKEA’s self service culture without making the customer feel abandoned.
In IKEA’s case, the firm rejected the standard business models for both high-end and low-end furniture stores. IKEA’s furniture is composed of cheaper parts that are not visible and are not under high stress through use and a higher quality material is used for the visible parts or parts under high stress. This gives IKEA’s furniture a higher end look while keeping their costs low. IKEA’s practices have kept prices low, while eliminating many services thought essential to a higher-end store. The company replaced them with unique services for its category: a bright, inviting showroom, furniture that was attractively designed, a child care center, a restaurant serving Swedish meatballs, and brightly colored house wares and clever toys. As a result, IKEA successfully avoided the feel of the low-end retailers, and customers “find the IKEA shopping experience to be immensely appealing” (Moon, 2004). IKEA seems to incorporate a strategy focusing on both cost and differentiation. IKEA attempts to price in the low to midrange category. IKEA products are known for falling apart after a few years; however, its customers

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