Talking about Ikea is talking about the largest multinational home products company in the world. With around 500 establishments distributed in more than 49 markets in the world, the furniture sales and manufacturing giant consolidates itself as an undisputed leader in the segment.
But how did they achieve this market dominance? Here we tell you the story of its founder Ingvar Kamprad, the difficulties he faced, his ties to Nazism And how was the process of the company to reach Colombia.
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The beginnings of the furniture giant
Ingvar Kamprad was born in Sweden in 1926 and lived most of his childhood on a family farm called Elmtaryd, near the town of Agunnaryd, in the Swedish province of Småland. At just five years old, he showed his entrepreneurial side, selling matches or matches to his neighbors. and at 17, with money his father had given him for getting good grades, he founded Ikea in 1943.
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Following the business model: buy wholesale to sell at retail, Ingvar acquired watches, wallets, pens, frames and other products that move away from the essence of the brand as we know it today. According to the company, it was not until 1948 that Ikea expanded its sales catalog and began marketing furniture, in 1951 it published its first catalog and in 1953 it organized its first product catalogue.
From the beginning, Ingvar was aware that he was competing in a tight market, so he searched for a differential factor that would define the essence of his company and found that While some producers mentioned the quality of the products to keep prices low, Ikea worked with the best inputs. and a high market volume that did not sacrifice quality.
This fortress was the spearhead the company used in the 1948–1949 issue of the «ikea-nytt» brochure. In it they argued that their low prices were «made possible by high sales volume, factory direct delivery and very low overhead«, eliminating any doubt regarding the quality of the inputs.
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The difficulties they faced growing up
This valorization of the service and the success of its strategies brought criticism and rejection from the members of the Swedish real estate sellers guild. These, at the time, were a big problem for Ingvar, because they pressured manufacturers to cancel the supply chain to Ikea. Even the exclusion of important national fairs of the sector.
Beyond the effects, this hostile environment contributed to the company assuming the production, design and manufacture of its own furniture. In addition, it marked the beginning of its expansion in the foreign with the opening of more points of sale and the acquisition of inputs.
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With all these changes, the factors that consolidated the image we know of the brand today were the high costs of inputs and production. These cause In 1953, Ikea decided to implement the shipping model of flat furniture, which took up less space in the load and is easier to assemble.. Although it was not widely used, it was a success for the company and little by little it gained popularity.
Between 1950 and 1959 the company expanded its operations in Sweden; in the 1960s, it began opening stores in Denmark and Norway; During the seventies they continued their expansion in Australia, Austria, Canada, Germany, Hong Kong, Japan, the Netherlands, Singapore, Switzerland, among other countries.; and finally, by 1980, Ingvar ended up implementing the franchise system, which was the trigger to have a presence in multiple markets around the world.
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Ingvar Kamprad’s biggest mistake
In 1986, the businessman left the management of Ikea, delegating different functions to his children and assuming the position of adviser. He had left his legacy and although everything seemed to take his course, in 1994 Swedish journalist Elisabeth Asbrink exposed Kamprad’s links to Nazism.
The investigation revealed that Ingvar not only belonged to the National Socialist Workers Party, but also, developed some activities within it such as recruiting new members to the point of being booked by the Swedish security service. The businessman justified himself by saying that his German grandmother was a great admirer of Adolf Hitler, which influenced his ideology when he was young. He also acknowledged that this was «the biggest mistake of his life» and apologized to the workers of his company.
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This was truly the first major scandal in Ingvar Kamprad’s career and after the event he stayed away from the public eye until the company he worked for all his life announced his death on January 27, 2018. «He passed away peacefully at his home» in southern Sweden, they explained in a statement.
The delay to Latin America
Despite having more than 50 years of history and being the world giant in the sale of furniture and products for the home, Only until 2010 did Ikea have a presence in a Latin American country, the Dominican Republic. Later, in 2013, it opened a branch in Puerto Rico.
This was maintained until 2018, when it announced its intentions to expand into new Latin American markets, however, the pandemic affected Ikea’s profits during 2020, in addition, a global supply crisis resulted which directly impacted the company’s aircraft.
Despite the situation, he took on the challenge of opening a branch in Mexico and, with the help of Falabella, he opened two points in Chile and hopes to open his first store in Colombia soon, in the Mallplaza NQS shopping center in Bogotá. This establishment will have an area of 26,000 square meters and it is estimated that it will generate an offer of more than 1,300 jobsthe company said in a statement.
«The alliance between Ikea and Falabella consider an investment of around 600 million dollars that will make it possible to open nine stores in the three countriesin addition to the online channel of each market, over the course of 10 years,» explained the country manager at Ikea Colombia, Hasbleidy Castañeda.
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