• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

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.

Extracts from this document...


´╗┐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.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our University Degree Management Studies section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related University Degree Management Studies essays

  1. Case on IKEA: Expanding through franchising to the South American market

    Some more reason is the trade liberalization started in 1990, it could be apparent that the Brazilian trade system changed to be more open and competitive. The last reason that supported IKEA to expand into Brazil is the million hectares of planted forests.

  2. Perform a SWOT analysis for IKEA.

    Therefore, IKEA is facing the threat of the entry of the new competitors in this field which may also affect its sales. Last but not least, the economic factors. Economic factors are normally referred to the hit of the recession.

  1. Critical Evaluation of the International Strategy of IKEA and its Re-Entry Into ...

    However Tayeb (2000) explains how the model has been validated by many academics for industries in the US (Davidson, 1980) and Japan (Yoshihara, 1978). The I-R Framework Writers such as Levitt (1983) argue that globalization is leading to the global convergence of consumer tastes and the reduction of national differences,

  2. Strategic Management at Ikea

    Also, based on Hambrick and Frederickson's article (2005), it is clear that Ikea's five elements contribute to a successful strategy as each element complement each other and fit together: Staging: Rapid international expansion, by region; early footholds in each country, fill in later Arenas: Inexpensive contemporary furniture; young, white-collar customers;

  1. General Management - organisation, leadership and theories.

    Several executives mention that despite the tax-disadvantage of dividends, for whatever reason, individual investors nonetheless prefer dividends. In addition, certain situations can exist for which dividends are not tax disadvantaged. In one case, the firm we interviewed was more than 80 percent owned by another public corporation, in which case

  2. Circuit City Paper

    Goldman Sachs analyst Matthew Fassler called the results "predictably problematic." Circuit City is experiencing the same problems as Best Buy, but at amplified levels, across sales growth and margin rate," Mr. Fassler wrote to clients. "Moreover, as Circuit City invests aggressively in systems, an understandable priority, it subjugates near-term results to longer term investment."

  1. Management Functions at IKEA

    the team under team to perform and execute the tasks and responsibilities set out. This may involve actively motivating staff such as those on the front lines. This has been described by Gupta (2009, p4) as the most important managerial function.

  2. In this paper we will describe the Swedish Paper and Pulp industry and its ...

    Regarding forest, the good is a standardized raw material which the companies buy in very large quantities. This gives the paper companies an advantage in bargaining power. According to LRF Konsult, consultants specialized in Swedish farming industry, the price of forest is increasing with about 3% during 2012, an opportunity for companies who have invested in forest.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work