IKEA

IKEA is a Swedish home furnishings retailer. It has 229 stores in 33 countries, most of them in Europe, the rest in the United States, Canada, Asia and Australia. More than 20 opened during 2005. IKEA is one of the few store chains to have locations both in Israel and in other Middle Eastern nations.

IKEA is generally pronounced (IPA /i'ke.a/) but in many English-speaking regions, it is pronounced (IPA /aɪ'ki:ə/) rhyming with the word "idea".

The IKEA catalogue, containing about 12,000 products, is printed in 160 million copies (2006) worldwide, and distributed free of charge.

IKEA is famous for its affordable furniture which consumers are required to assemble for themselves.


History

IKEA was founded in 1943 by Ingvar Kamprad, then 17. The company name is a composite of the first letters in his name and the names of the property and the village in which he grew up: Ingvar Kamprad Elmtaryd Agunnaryd. This acronym is incidentally similar to the Greek word οικία [oikia] (home) and to the Finnish word oikea (correct).

Originally, IKEA sold pens, wallets, picture frames, table runners, watches, jewelry and nylon stockings or practically anything Kamprad found a need for that he could fill with a product at a reduced price. Furniture was first added to the IKEA product range in 1947 and, in 1955, IKEA began to design its own furniture. The company motto is: "Well designed affordable quality furniture to the many people".

At first, Kamprad sold his goods out of his home and by mail order, but eventually a store was opened in the nearby town of Älmhult. It was also the location for the first IKEA "warehouse" store which came to serve as a model for IKEA establishments elsewhere and on March 23, 1963, the first store outside Sweden was opened in Asker, a Norwegian municipality outside Oslo. (The store was located in the same building which houses the Bellevue hotel, about two km from the present site at Billingstad/Slependen, which opened in 1975. The store in Asker is currently undergoing a major expansion and remodeling.)


Products

IKEA furniture is well known for its modern (often unusual) design. Also, because much of it is self-assembly furniture (also known as "flat-pack"), it is designed to be assembled by the consumer rather than being sold pre-assembled. IKEA claims this permits them to reduce costs and use of packaging by not shipping air—the volume of a bookcase, for example, is considerably less if it is shipped unassembled rather than assembled.


IKEA also claims to have pioneered the use of more sustainable approaches to mass consumer culture. Its founder calls it "democratic design," meaning that the company applies an integrated approach to manufacturing and design (see also environmental design). Responding to the explosion of human population—and material expectations—in the 20th century, the company has mastered economies of scale, capturing material streams and creating manufacturing processes that hold costs and resource use down, such as the extensive use of particle board. The intended result is flexible, adaptable home furnishings, scaleable both to larger homes and smaller dwellings.

IKEA has also expanded their product base to include flat-pack houses, in an effort to cut prices involved in a first-time buyer's home. The product, named BoKlok was launched in Sweden in 1996 in a joint venture with Skanska. Now working in the Nordic countries and in UK, sites confirmed in England include London, Manchester, Leeds and Liverpool.

Every IKEA product is identified by a name, either Swedish in origin or Swedish-sounding. Most names have an etymology regarding their function or appearance ((German)) :

* Upholstered furniture, coffee tables, rattan furniture, bookshelves, media storage, doorknobs: Swedish placenames

* Beds, wardrobes, hall furniture: Norwegian placenames

* Dining tables and chairs: Finnish placenames

* Bookcase ranges: Occupations

* Bathroom articles: Scandinavian lakes, rivers and bays

* Kitchens: grammatical terms, sometimes also other names

* Chairs, desks: men’s names

* Materials, curtains: women’s names

* Garden furniture: Swedish islands

* Carpets: Danish placenames

* Lighting: terms from music, chemistry, meteorology, measures, weights, seasons, months, days, boats, sailors’ language

* Bedlinen, bedcovers, pillows/cushions: flowers, plants, precious stones

* Children’s items: mammals, birds, adjectives

* Curtain accessories: mathematical and geometrical terms

* Kitchen utensils: foreign words, spices, herbs, fish, mushrooms, fruits or berries, functional descriptions

* Boxes, wall decoration, pictures and frames, clocks: colloquial expressions, also Swedish placenames

For example, AKTION is a name for a pepper mill, DINERA for tableware, KASSETT for media storage. The entire office furniture line is named EFFEKTIV.

Company founder Ingvar Kamprad, who is dyslexic, found that naming the furniture with a name, rather than a product code, made the names easier to remember.


Community impact

IKEA's goals of sustainability and environmental design in their merchandise may be trumped by the impact a new IKEA store can have on a community:

Like all big-box stores, IKEA stores draw consumers from a very large area. Although they were in the U.S. before the United Kingdom and other European countries, IKEA had very few stores until recently. Because they have few stores, they often drew consumers from out-of-state. The handful of American cities which accepted IKEA stores were delighted by the subsequent surge in sales tax revenue, yet dismayed at the accompanying surge in traffic congestion.


For example, when an IKEA opened in April 2000 in Emeryville, California, the traffic was so severe that most local traffic lights were rendered useless. Emeryville police were forced to manually direct traffic daily for three months. When an IKEA opened in Tempe, Arizona in November 2004, the traffic jams on Interstate 10 were so severe that the Arizona Department of Public Safety had to close the nearest off-ramp to the store just to spread out the traffic among other nearby off-ramps.

IKEA's most popular store in Brent Park, London frequently has traffic jams on the weekends.

A new store opened in Edmonton, North London at midnight on 10 February 2005. It attracted over 6,000 visitors due to huge opening discounts in the first three opening hours and resulted in a number of casualties as people were crushed in the rush to get into the store. The store was closed after only 30 minutes (due to the large number of customers, there were inadequate security staff and police). The store was re-opened at 5pm on 11 February 2005 with no additional incident.

In Saudi Arabia three people were crushed to death in September 2004 when IKEA offered a limited number of $150 vouchers for free.

Minding the above problems, the store at Atlantic Station in Atlanta opened on 29 June 2005 with 20 off-duty police officers directing traffic. That store is its first in the Southeast U.S., its third-largest in North America, and the only one to serve grits. The first person in line had been there a week.

The Stoughton, Massachusetts store opened on 9 November 2005. Nearby highways were at a standstill; approaching the store from less than 1 mile took upwards of an hour. IKEA employees indicated that on the first Saturday of operation, the Stoughton store would have sales of $1-1.2M. Over 300,000 visitors were expected on the first weekend of operation.

IKEA was vetoed planning permission for a further store in England in 2004 (to be based in Stockport in Greater Manchester) by the Office of the Deputy Prime Minister. It applied for judicial review but lost in 2005. In January 2006 it announced plans to create 10 extra smaller outlets, to be based in city centres. The first of these will be in Coventry.


Store format

Newer IKEA stores are usually very large blue boxes with few windows. They are often designed around a mandatory "one-way" layout which forces consumers to traverse nearly all parts of the store before reaching the cashier or check-out stands. The sequence involves going through furniture showrooms (showroom) and housewares (market-hall) first, then the warehouse where one collects flatpacks for products seen in the showrooms, and then the cashier.

This design is intended to make customers encounter products which they might not have thought to look for, but has the disadvantage of inconveniencing consumers who already know what they want to buy and just want to return to the warehouse area.

Recently, in some stores, shortcuts have been introduced between various sections, making travel time through the store much shorter if necessary. However, though they may be indicated on store maps, these shortcuts are often not obvious so an inexperienced IKEA shopper is likely to overlook them and travel through the whole layout of the store. In addition, the shortcuts are heavily criticized for not being long enough for convenience.

Whilst the original design involved the warehouse on the lower level and the showroom and markethall on the upper, some stores are single-level bungalow-style stores while many U.S. stores place the showroom upstairs and the marketplace and warehouse both downstairs. Some stores operate separate additional warehouses for the larger or less popular flatpacks to keep the size of the customer warehouse down (and therefore less daunting) and allow more stock to be kept on-site at any given time. Unfortunately, this occasionally results in customers being unable to find the goods they paid for at the cashier without direction from staff and the impression of queueing twice (once at the cashier, once at the external warehouse). However, there are few complaints about being able to collect goods quicker from the customer warehouses.

Many stores include restaurants serving typically Swedish food, and beverages such as lingonberry juice. The restaurant area is usually the one place in the store where there are large windows. Outside of Sweden, these restaurants are sometimes complemented by mini-shops selling Swedish-made, Swedish-style groceries. As would be expected with IKEA, you can buy IKEA's specialities, such as Swedish meatballs, in parts (i.e. the ingredients) at these stores and assemble it (that is, simple, straightforward food preparation) at home.

Most IKEA stores also offer an "as-is" area at the end of the warehouse just prior to the cashiers. Returned, damaged and formerly showcased products which are not in "as new" condition are displayed here, and sold with a discount, but also with a "no-returns" policy.

In Hong Kong, where shop space is limited and costly, IKEA has opened four outlets across the country, which are actually part of conveniently located shopping malls. They are relatively tiny, compared to common "large blue box" store design, yet most of them are still in the "one-way" layout. However, the newest outlet in Telford Plaza does not follow this template, and the three independent floors can be accessed freely from each. Following IKEA tradition, though, the only cashier is located on the lowest floor.


Corporate structure

Despite IKEA's Swedish roots, the owner/franchiser of the IKEA concept is a Dutch company, Inter IKEA Systems BV. The operator/franchisee of the majority of the stores worldwide is a separate entity, the IKEA Group, a private group of companies owned by a Dutch charitable foundation.

Of the 202 IKEA stores in 32 countries, 180 are run by the IKEA Group. The remaining 22 are run by franchisees outside of the IKEA Group.

INGKA Holding BV is the ultimate parent company for all IKEA Group companies, including the industrial group Swedwood. INGKA Holding BV is wholly owned by Stichting INGKA Foundation, which is a foundation registered in the Netherlands.

This complicated structure is seen by some as an attempt to avoid Sweden's high taxation at the time. Another reason could be to make it difficult to acquire IKEA.


Criticisms

Some criticisms of IKEA:

* In the 1990s, there were several complaints arising from IKEA's British television advertising campaigns:
o “Stop being so English”: In which a “Swedish psychologist” claims the British are uptight due to their taste in “English” furniture. (complaints were dismissed).
o An advertisement where a management consultant suggests how much more furniture a company could buy, if it fired an office worker. (complaints were dismisssed but IKEA voluntarily withdrew the advert)
o A campaign under the slogan, "Just pack up, ship out, find a place of your own. And for all your new things, you know where to come. Make a fresh start," got complaints that it was trivializing marriage breakups and showing a homosexual relationship. (complaints were dismissed)
o An advertisement in which a boss tells members of his staff to smell each other's armpits.



Diversity

IKEA was named one of the 100 Best Companies for Working Mothers in 2004 by Working Mothers magazine.


Design reform

As pointed out by circuit lecturer Will Novosedlik, IKEA embodies the principles of design reform begun by William Morris and John Ruskin. "Socialistic" in nature, IKEA attempts to elevate public taste by providing quality goods at affordable prices.




IKEA's debut in each country

* 1958 Sweden — Älmhult
* 1963 Norway — Asker (Nesbru)
* 1969 Denmark — Copenhagen (Ballerup)
* 1973 Switzerland — Zürich (Spreitenbach)
* 1974 Germany — Munich (Eching)
* 1975 Australia — Sydney (Artarmon)
* 1975 Hong Kong — Kowloon (Tsim Sha Tsui)
* 1976 Canada — Vancouver (Richmond)
* 1977 Austria — Vienna (Vösendorf)
* 1978 Netherlands — Rotterdam (Sliedrecht)
* 1978 Singapore — Queenstown
* 1980 Spain — Gran Canaria (Las Palmas)
* 1981 Iceland — Reykjavík
* 1981 France — Paris (Bobigny)
* 1983 Saudi Arabia — Jeddah
* 1984 Belgium — Brussels (Zaventem and Ternat)
* 1984 Kuwait — Kuwait City
* 1985 United States — Philadelphia (Plymouth Meeting)
* 1987 United Kingdom — Manchester (Warrington)
* 1989 Italy — Milan (Cinisello Balsamo)
* 1990 Hungary — Budapest
* 1991 Poland — Platan
* 1991 Czech Republic — Prague (Zličín)
* 1991 United Arab Emirates — Dubai
* 1992 Slovakia — Bratislava
* 1994 Taiwan — Taipei
* 1996 Finland — Espoo
* 1996 Malaysia — Kuala Lumpur (Mutiara Damansara)
* 1998 China — Beijing
* 2000 Russia — Moscow (Chimki)
* 2001 Israel — Netanya
* 2001 Greece — Thessaloniki
* 2004 Portugal — Lisbon
* 2005 Turkey — Istanbul
* 2006 Japan — Funabashi
* 2006 Ireland — Dublin