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IKEA - paper to how IKEA responded to external changes by introducing its newest innovation, flat-pack TV and will then conclude by reviewing IKEAs culture of innovation.

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´╗┐In today?s volatile economy, everything can change in a matter of seconds. Like a cautionary tale, Motorola?s fall in the mobile phone industry reminded all of us that no matter how successful you are, if you fail to adapt, you will lose. That is why changes in external environment are particularly important especially when they have the ability to change the nature of the industry. This paper will begin by outlining the background of IKEA and discuss the theoretical concept behind changes in external environment. It will then show how IKEA respond to external changes by introducing its newest innovation, flat-pack TV and will then conclude by reviewing IKEA?s culture of innovation. IKEA was founded by Ingvar Kamprad in 1926 and since then has grown into one of the most formidable forces in the furniture retail industry. In fact, IKEA is the world?s largest furniture retailer (Ref: 1). With a vision to create a better life for everyone, IKEA offers cleverly designed furniture at affordable prices so that everyone can afford it (ref:3). Through this vision, comes an innovation that truly reflects the values that IKEA stands for, a flat-pack packaging. ...read more.


This occurs because the external environment of an organization will not stay constant forever. There is a certain level of uncertainty in each industry that the organization is operating in. In this case IKEA has managed its environmental uncertainty in an effective and efficient fashion. In analyzing this part, we need to determine the environmental uncertainty of the industry as a whole. The first part is to determine the simple-complex dimension of the industry (ref: textbook?). This refers to the number of components in the organisation?s external environment. Since IKEA is a global business, its environment tends to be more complex rather than simple. It has to deal with many stakeholders including consumers, governments, suppliers and many more, especially considering that each of those stakeholders have different agendas and come from different cultural background. The second part of environmental uncertainty is the stable and unstable dimension. It refers to the stability and/or volatility of the external environment. In this case, it can be argued that there is not much stability in the industry. ...read more.


One employee even said that IKEA will allow him to do what interest him (ref:8). IKEA?s innovative solution to our everyday problems is one of the reasons that it is the leader in furniture retail industry. Its ability to respond to changes and to constantly monitor the external environment will only strengthen its position as an innovator. Of course this capability comes from the people and the culture at IKEA. Its strong vision and mission created a culture of cost-saving organization that comes up with solutions to make life simpler and more affordable. IKEA History Ref 1: http://www.businessweek.com/news/2011-09-22/ikea-to-triple-the-pace-of-store-openings-in-china-ceo-says.html Ref 2: http://www.ikea.com/ms/en_AU/about_ikea/our_responsibility/climate_change/index.html Ref 3: http://www.ikea.com/ms/en_AU/about_ikea/the_ikea_way/our_business_idea/index.html Ref 4: http://www.ikea.com/ms/en_AU/about_ikea/facts_and_figures/index.html Ref article: http://www.dailymail.co.uk/news/article-2131353/IKEA-sell-TVs-integrated-furniture.html Ref 5: http://www.nytimes.com/2012/02/09/business/media/young-people-are-watching-but-less-often-on-tv.html?pagewanted=all Ref 6: Guo L Ref 7: http://www.ikea.com/ms/en_AU/the_ikea_story/working_at_ikea/what_we_offer.html Ref 8: http://www.ikea.com/ms/en_AU/the_ikea_story/working_at_ikea/co_worker_stories.html Ref 9: ikea ceo anders dahlvig on international growth and? Ref 10: http://ehis.ebscohost.com.ezp.lib.unimelb.edu.au/eds/pdfviewer/pdfviewer?sid=c9a8e873-2ee5-41ed-93be-fa7f2b2cddef%40sessionmgr11&vid=2&hid=2 Francis Cayouette, designer of Uppleva, said: "The idea behind Uppleva came from our visits to people's homes around the globe to understand their home furnishing needs and dreams. We realized that many people look for an attractive solution that takes care of the different media devices in a way that match their furniture." Ref 11: http://gigaom.com/video/ikea-remote-control-shopping-connept/ ...read more.

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