IKEA in Russia - Ethical Dilemmas
| Case Code: BECG128 Case Length: 12 Pages Period: 2000-2012 Pub Date: 2013 Teaching Note: Available |
Price: Rs.400 Organization: IKEA Industry: Specialty Retail Countries: Russia Themes: Business Ethics, Corporate Governance |
Abstract Case Intro 1 Case Intro 2 Excerpts
Background Note
IKEA, founded in Sweden was the most successful entrepreneurial venture of its founder Ingvar Kamprad (Kamprad). Kamprad was just a boy in the 1920s, when he began selling matches. He later graduated to selling flower seeds, greeting cards, Christmas tree decorations, pencils, and then ball-point pens.
In 1943, Kamprad set up a business with money given by his father. He called it IKEA (representing his own initials (I.K.), in addition to the first letter of his farm, Elmtaryd (E), and the village where he spent his childhood Agunnaryd (A)). IKEA started out selling products such as pens, wallets, picture frames, table runners, watches, jewelry, and nylon stockings, at discounted prices. In 1948, furniture made by local manufacturers was also sold through the business. Over the years, the company took to advertising its products by various methods, including through catalogs. In 1953, the first IKEA furniture showroom was opened in Älmhult, Sweden. In 1956, the company took to designing its own furniture, adopting flat packaging and enabling self- assembly of the furniture. In the early 1960s, the ‘IKEA Concepts’ 5 of form, function, and price were created, with furniture designed accordingly.
Over the next three decades, the company launched some highly successful products such as the POÄNG armchair, the SKOPA chair, the ÖGLA chair, the BILLY Bookcases, the KLIPPAN sofa, the LACK table, the MOMENT, sofa and the STOCKHOLM furnishings. IKEA gradually expanded its footprint across Europe and North America, opening stores in Norway (1963), Denmark (1969), Switzerland (1973), Germany (1974), Australia (1975), Canada (1976), Austria (1977), the Netherlands (1979), France (1981), Belgium (1984), the US (1985), the UK (1987), and Italy (1989)...
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