Farm Life to Flat Packs journey of ingvar kamprad
gayathri Anthey
Kamprad’s original furniture business began as a mail-order sales business. Most of his products were identifiable by a set of numbers, but Kamprad had trouble remembering the codes for each product, which turned out to be the sign of his dyslexia. So, instead of delegating those responsibilities to another person and avoiding the issue, he used his disability to his advantage by coming up with a more creative system for organizing his products. This turned out to be the most iconic aspect of his now-worldwide business. Kamprad created a naming system where he gave names to each piece of furniture. For example, large furniture is given names of Swedish places, chairs and desks have men’s names, and garden furniture is named after Swedish islands. This system was easier for Kamprad to remember and visualize each product, since most of the names were of places familiar to him. Today, IKEA is one of the largest furniture stores in the world and is well-known for its unique product names. Because Kamprad decided to face his disability, he turned a once-challenging aspect of his life into a unique facet of IKEA.
FARM LIFE
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Ingvar Kamprad, a Swedish entrepreneur, billionaire and who is considered one of the richest men in the world. He is the founder of IKEA, a network of furniture stores with affordable prices.
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THE BEGINNING OF IKEA
INSTRUCTIONS AND ASSEMBLING
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EXPANDING IKEA
store design
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NAZI MISTAKE
family and lifestyle
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farm life
Childhood days of Ingvar Kamprad in his family’s Farm and initial days of trading as a child.
Born on March 30, 1926 in Smalandiya in Pjätteryd South Sweden.
Ingvar Feodor Kamprad was born on March 30, 1926 in a small province Smalandiya in Pjätteryd Southern Sweden. Kamprad’s biographers believe that the trading hobby was passed to Ingvar by inheritance. In 1897, the company,that belonged to the grandfather of the future billionaire was on the verge of bankruptcy. His grandfather could not pay the mortgage and committed suicide. But the Ingvar’s grandmother was able to save the business. So she taught her grandson to bridge over the difficulties with willpower and perseverance. Ingvar’s grandmother Francis had a huge positive impact not only on him, but on the entire family. She was a very intelligent woman, although a simple origin though. People, who closely work with Ingvar Kamprad, say that he is a brilliant marketer, wise man who never makes a mistake. Indeed, the strategy of Kamprad is studied and examined by major entrepreneurs from around the world. Although, as artfully Ingvar says about himself, he is a dropout. And this is true as he never attended a university (school teachers could not teach him to read for a long time). The lack of a university degree Kamprad always replaced with enthusiasm. Once he remarked: “If you work and do not feel incorrigible enthusiasm, consider that at least a third of your life has gone down the drain.” First bargains young Kamprad made in childhood. He bought pencils and matches in bulk, which he then resold to classmates for a profit. During the study Ingvar managed to try a variety of activities: from fish to Christmas cards trading. And that was the real school. He was neither trained doing business nor he read books on the subject. But what we know exactly today is that the IKEA company came through thanks to the personal experience and care of the founder.
First bargains young Kamprad made in childhood. He bought pencils and matches in bulk, which he then resold to classmates for a profit.
In the field of business, I guess I was a little different from the others, as I has started to show business activity very early. My aunt helped me to buy the first one hundred boxes of matches on the sale of so-called “88 Øre” in Stockholm. The whole package was worth 88 øre, and the aunt did not even make me pay for postage costs. After that I sold a box of matches at a price of 2 or 3 øre and some of 5 øre. I still remember the pleasant sensation experienced by receiving my first profit. At the time, I was no more than five years.
THE BEGINNING OF IKEA And in 1943, when he was 17 years he added money, borrowed from his father, to the accumulated capital and opened his IKEA.
The name IKEA is derived from Kamprad’s initials (I.K.) plus the first letters of Elmtaryd and Agunnaryd, the farm and village where he grew up.
The future entrepreneur set money aside. While school peers spent their time at football fields and dating with girls, Ingvar Kamprad was thinking about how to expand the business. And in 1943, when he was 17 years he added money, borrowed from his father (who, however, was convinced that he’s giving money his son for his studies), to the accumulated capital and opened his IKEA. At the beginning of its operation, the young Kamprad engaged in the trade of different things (from matches to discount stockings). But the biggest demand was for pen. At the beginning of 1940s they were a novelty even in Sweden. Kamprad ordered 500 pens from Paris, taking a loan of 500 SEK in a district bank (at the time around 63 USD). According to Kamprad, this was the first and the last loan that he had taken in his life.
To attract prospective customers to the presentation of the store, the young entrepreneur promised a free cup of coffee and a bun to everyone who would come. Imagine his surprise when this modest event attracted more than a thousand people! The first presentation of the day was about to become the last one. Nevertheless, everyone got a cup of coffee and a bun. And the idea about opening a fast food restaurant in each store looked great for the owner of IKEA. Time passed and each IKEA store got a fast food restaurant. Further, a young entrepreneur draws attention to a feature of life in Sweden: furniture was luxury for most people due to the high cost. In 1948, Ingvar Kamprad comes up with a fresh idea and he decides to engage in trade of furniture. Further it will be the main source of profit for IKEA.
Guimars Fabriker from Alvesta, who was my main competitor, has been selling furniture in Kagnuit for a long time. I saw his ad in an agricultural newspaper and also decided to try my hand in the business. Thus, furniture sale, which I started by chance, and solely in order to outdo my competitors, has determined my fate. After finding places where he could buy the cheapest furniture, Ingvar agreed with fine upholstery manufacturers. The range of his store was replenished with a coffee table and a chair without armrest. The chair was called ‘Root’. Since then, every good in the store had its own name. The names was invented by the owner of the company, due to his inability to remember the numeric items. In 1951, IKEA started spreading booklets among its customers called ‘IKEA News’. They were those booklets that became a prototype of the modern IKEA catalogs. Young entrepreneur’s business was targeted to customers with medium and low incomes. For this, he ordered cheap furniture at local furniture factories. It was then when he invented his famous formula: “It’s better sell 600 chairs at a lower price, than sell 60 chairs at a high price”.
From Ingvar Kamprad biography we learned that in the early 50’s he bought an old small factory in Sweden, which let him to put on a production flow even cheaper furniture for his stores. It was ‘nonsense’ to the country where the furniture had always been considered an Perhaps such turn for any businessman could have been tragic, but not for Ingvar Kamprad and not for the IKEA brand. Any problem and its solution generates new stages of a company’s development. As a result, the entrepreneur had to make an unusual step for the Swedish business at the time: he began to acquire some furniture components on the cheap from Polish suppliers. This is how the founder of IKEA laid the future strategy of the company and purchased furniture components in those countries where they are cheaper. expensive commodity. Such a risky move could not remain unnoticed by competitors. This is how the founder of IKEA laid the future strategy of the company and purchased furniture components in those countries where they are cheaper.
His famous formula: “It’s better sell 600 chairs at a lower price, than sell 60 chairs at a high price”.
INSTRUCTIONS The first IKEA furniture showroom was opened in 1953 in Älmhult, Sweden. Сustomers could look and touch IKEA home furnishings before purchasing them. And five years later a new 6,700 square meter store was opened which was more or less similar to what we see today under huge IKEA signboard. By the way, initially the traditional company’s colors were red and white. Nowadays the IKEA network is painted in yellow and blue, the national colors of Sweden. During that period, Ingvar Kamprad was no longer a miracle child of Småland. He turned into a confident, sleek and dangerous competitor, whose methods sometimes were perceived with contempt and resentment. In the early 60’s, Kamprad made a cognitive trip to the United States. There he first saw how the Cash & Carry trade system worked. He liked that form of trade where customers paid in cash and carry the goods away themselves.
In 1965, the largest 31,000 square meter IKEA Kungens Kurva store was opened near Stockholm. Things were arranged there taking into the account the American experience, however, they were creatively improved. First, the store was opened in a suburb. Rental land costs there were much lower, and there was built a spacious car parking lot. Second, to reduce the transportation costs, the company ordered a ready-to-assemble furniture, where every detail was placed in a flat package. It was easier and cheaper to transport it and customers had to assemble the furniture themselves. Kamprad had noticed that people actually liked to self-assemble cabinets and sofas. Especially, if the assembling process was so simple thanks to the detailed instructions. Also, Ingvar knew that a car boom began in Sweden and he realized that people were ready to go shopping to distant lands.
AND ASSEMBLING To encourage customers to go shopping in IKEA, they started selling them roof racks for cars for a knockdown price. Thanks to this policy the company’s turnover has doubled in one year. The largest store in Sweden looked like The New York’s Guggenheim Museum, which Kamprad found very attractive. However, when Ingvar Kamprad opened it, he did not take into account one thing: a possible shortage of goods on the store’s shelves. A huge number of people, literally swept the IKEA products from the store’s shelves. Thirty thousand Swedes would certainly want to buy furnishings at low prices. And even in such large store there weren’t so much goods to sell and a considerable part of them left at warehouse unpacked. Ingvar Kamprad made the only right decision in this situation and opened a self-serve warehouse.
So, quite by accident, IKEA found a formula for success, which provided profits for many years. The self-serve warehouse was just the right thing what a modern client needed. Now every IKEA furniture store is a kind of showroom, where there are exhibited not only sofas and cabinets, but any little things of everyday life: tablecloths, curtains, bedspreads, towels and candle holders. Thus, the visitor can see ten children’s rooms in a row, and then twenty-five dining rooms or living rooms and so on. By imagining what a particular furniture will look in his interior, a customer should go for it to the self-serve warehouse. Then a customer transports the furniture in comfortable packages to his home and and then assembles it by reading clear and sensible instructions.
expanding ikea After the success at home, IKEA had nothing to do but to explore overseas markets. In 1963, IKEA starting its expansion with Norway and opens the first store outside Sweden in Oslo. In addition, in the 1960s, IKEA introduced a quality control system that allowed the company’s products to be recognized as the best quality ones by several Swedish reputable journals. Decisions were made spontaneously. For example, the head of the company’s hesitated for a long time whether to open a store in Switzerland. The country was known for its conservative tastes, besides there were two local furniture
chains that operated quite well But once Ingvar Kamprad, walking around Zurich, overheard a young couple. “What a beautiful chair!” – a young woman said, looking into the window. “Yes, but it is still too expensive for us. Let’s buy it next year”, – her husband replied. This episode was crucial. And soon, in 1973, IKEA appeared in Switzerland And then in Australia, Netherlands, France, USA. Now IKEA operates 338 stores in 40 countries. In 1986, Ingvar Kamprad retired from Group Management and became an advisor to the parent company INGKA Holding
B.V. Anders Moberg was assigned as the President and CEO of the IKEA Group. In 1990s, the IKEA Group developed and introduced the first an environmental policy to make sure that the company and its co-workers take environmental responsibility for all activities conducted within its business. Anders Dahlvig replaced Anders Moberg and became the President and CEO of the IKEA Group. In 2000, IKEA realised how Internet was important and introduced its customers e-shopping in Sweden and Denmark. Since then many IKEA stores launched online shopping in many other countries. Ingvar Kamprad knows that his stores offer customers everything essential where they can get visual and tactile sensations and the real pleasure of being there. Ingvar Kamprad net worth is $3.8 Billion as of November 2014. The current IKEA Group’s President and CEO is Peter Agnefjäll, who was assigned on this position on September 1, 2013 and who gained deep and broad knowledge, experience from IKEA.
Now IKEA operates 338 stores in 40 countries.
While generally a private person, Kamprad has published a few notable works. He first detailed his philosophies of frugality, simplicity and enthusiasm in a manifesto entitled A Testament of a Furniture Dealer. Written in 1976, it is considered the fundamental ideology of the IKEA retail concept, and its values are integrated into all of IKEA's activities. Kamprad also worked with Swedish journalist Bertil Torekull on Leading by Design: The IKEA Story. In the autobiographical book, Kamprad further describes his philosophazies and the trials and triumphs of the founding of IKEA.
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store design Older IKEA stores are usually blue buildings with yellow accents (also Sweden’s national colours) and few windows. They are often designed in a one-way layout, leading customers counter clockwise along what IKEA calls “the long natural way” designed to encourage the customer to see the store in its entirety (as opposed to a traditional retail store, which allows a customer to go directly to the section where the desired goods and services are displayed). There are often shortcuts to other parts of the showroom. Newer IKEA stores, like the one in Mönchengladbach, Germany, make more use of glass, both for aesthetics and functionality. Skylights are also now common in the self-serve warehouses; natural lighting reduces energy costs, improves worker morale and gives a better impression of the products.The sequence first involves going through furniture showrooms making note of selected items. The customer then collects a shopping cart and proceeds to an open-shelf “Market Hall” warehouse for smaller items, then visits the “Self Serve” furniture warehouse to collect previously noted showroom products in flat pack form. Sometimes, they are directed to collect products from an external warehouse on the same site or at a site nearby after purchase. Finally, customers pay for their products at a cash register. Today, most stores follow the same layout of having the showroom upstairs with the marketplace and self-service warehouse downstairs.Some stores are single level, while others have separate warehouses to allow more stock to be kept on-site. Single-level stores are found predominantly in areas where the cost of land would be less than the cost of building a 2-level store, such as the Saarlouis, Germany and Haparanda, Sweden locations. Some stores have dual-level warehouses with machine-controlled
silos to allow large quantities of stock to be accessed throughout the selling day.Most IKEA stores offer an “as-is” area at the end of the warehouse, just before the cash registers. Returned, damaged and formerly showcased products are displayed here and sold with a significant discount, but also with a no-returns policy. Most IKEA stores communicate the IKEA policy on environmental issues in this part of the store. The area, which is painted red, is named according to local customs, in the United Kingdom this is referred to as “Bargain Corner”, in Sweden “FYND” (Bargains) and in Denmark, “Rodebutikken” (Rummage boutique). In Hong Kong, where shop space is limited and costly, IKEA has opened three outlets across the city, most of which have the one-way layout. They are part of shopping malls, and while being tiny compared to common store design, are huge by Hong Kong standards.Another feature of IKEA stores is their long.opening hours. Many stores are in operation 24 hours a day with restocking and maintenance being carried out throughout the night.
The vast majority of IKEA stores are located outside of city centers, primarily because of land cost and traffic access. Several smaller store formats have been unsuccessfully tested in the past (the "midi" concept in the early '90s, which was tested in Ottawa and Heerlen with 9,300 m2 (100,000 sq ft), or a "boutique" shop in Manhattan). A new format for a fullsize, city centre store was introduced with the opening of the Manchester (United Kingdom) store, situated in Ashton-Under-Lyne in 2006. Another store, in Coventry opened in December 2007. The store has seven floors and a different flow from other IKEA stores. IKEA's Southampton store which opened in February 2009 is also in the city centre and built in an urban style similar to the Coventry store. IKEA built these stores in response to UK government restrictions blocking retail establishment outside city centresIn 2015, IKEA announced that it would be attempting a smaller store design at several locations in Canada. This modified store will feature only a display gallery and small warehouse. One location planned for Kitchener is in the place formerly occupied Sears Home store.
The warehouses will not keep furniture stocked, and so customers will not be able to drop in to purchase and leave with furniture the same day. Instead, they will purchase the furniture in advance online or in store and order the furniture delivered to one of the new stores, for a greatly reduced rate. Every store includes a restaurant serving traditional Swedish food, including potatoes with Swedish meatballs, cream sauce and lingonberry jam, although there are variations. In Kuala Lumpur, Malaysia, the usual boiled potatoes have been replaced with French fries. Besides these Swedish foods, hot dogs and drinks are also sold, along with a few varieties of the local cuisine, and beverages such as lingonberry juice. Also items such as prinsesstårta (princess cake) are sold as desserts. Stores in Israel sell kosher food with a high degree of rabbinical supervision.The kosher restaurants are separated into dairy and meat areas; falafel and non-dairy ice cream are available at the exit. IKEA stores in Saudi Arabia, Kuwait, Qatar and the United Arab Emirates serve chicken shawarma at the exit café as well as beef hot dogs, while in United Kingdom, a Quorn hot dog is available in the exit café.
nazi nazi mistake Mistake
ONLY THOSE WHO ARE ASLEEP MAKE no MISTAKES -INGVAR KAMPRAD
In 1994, the personal letters of the Swedish fascist activist Per Engdahl were made public after his death, and it was revealed that Kamprad had joined Engdahl's pro-fascist New Swedish Movement (Nysvenska Rörelsen) in 1942, at the age of 16. Kamprad had raised funds for and recruited members to said group at least as late as September 1945. When Kamprad quit the group is unknown, but he remained a friend of Engdahl until the early 1950s. Kamprad devotes two chapters to his time in Nysvenska Rörelsen in his book Leading by Design: The IKEA Story and, in a 1994 letter to IKEA employees, called his affiliation with the organization the “greatest mistake of his life”.Kamprad has explained his teenage engagement in New Swedish Movement as being politically influenced by his father and grandmother in Sudet-Germany. In 2011, journalist Elisabeth Åsbrink revealed that the Swedish security service created a file on Kamprad already in 1943 titled “Nazi” and that Kamprad in an interview in 2010 told her: “Per Engdahl is a great man, and I will maintain that as long as I live”.
Orange added, "The secret service concluded that, as Mr Kamprad received the party's youth newspaper, he must have held ‘some sort of official position within the organisation’."The following day, the BBC reported: "A Swedish expert on far-right extremism, Anna-Lena Lodenius, told Radio Sweden that Mr Kamprad's Nazi involvement could no longer be dismissed as the by-product of an accidental friendship with Per Engdahl. His involvement in another fascist organisation, she said, showed he must have been ‘perfectly aware’ of what it stood for". The Writing in UK newspaper The Daily Telegraph in August 2011, Richard Orange noted of the 1943 file: “It proves for the first time that Mr Kamprad was an active member of Svensk Socialistisk Samling – the successor to the Swedish Nationalist Socialist Workers Party – even detailing his membership number, 4013. It quotes letters intercepted from Mr Kamprad, then 17, in which he enthuses about recruiting new members and says that he ‘misses no opportunity to work for the movement’”.eport also noted that,
family and lifestyle
Kamprad and his first wife Kerstin Wadling adopted a daughter, Annika. He lived in Épalinges, Switzerland, from 1976 to 2014. According to an interview with TSR, the French-language Swiss TV broadcaster, Kamprad drives a 1993 Volvo 240, flies only economy class, and encourages IKEA employees to use both sides of pieces of paper. He reportedly recycles tea bags and is known to pocket the salt and pepper packets at restaurants." Kamprad has also been known to visit IKEA for a "cheap meal". He is known for purchasing Christmas paper and presents in post-Christmas sales. The company he created is still known for the attention it gives to cost control, operational details and continuous product development, allowing it to lower its prices by an average of 2-3% over the decade to 2010, while continuing its global expansion. Kamprad explains his social philosophy in his "Testament of a Furniture Dealer”: “It is not only for cost reasons that we avoid the luxury hotels.
We don’t need flashy cars, impressive titles, uniforms or other status symbols. We rely on our strength and our will!” Kamprad owns a villa in Switzerland, a large country estate in Sweden and a vineyard in Provence, France. Kamprad was also known for driving a Porsche for years. While working with furniture manufacturers in Poland earlier in his career, Kamprad became an alcoholic. In 2004 he said that his drinking was under control. In the 1960s, Kamprad married his second wife, Margaretha Kamprad-Stennert (1940-2011), whom he met when she was twenty years old. They had three sons: Peter, Jonas and Mathias. Kamprad has named his sons as the sole heirs of an entity called the Ikano Group, which holds a substantial minority stake in IKEA estimated at US$1.5 billion. His adopted daughter Annika will receive approximately $300,000. In June 2013, Kamprad announced that he intended to move back to Småland in Sweden by the end of the year, and did so in March 2014.
Sources: Wikipedia.org Businessinsider.in Sweden.se businessmanagementdaily.com bbc.com
“if there is such a thing as good leadership it is to give a good example� Ingvar Kamprad