IKEA — Lessons — a story that inspires millions
Ingvar Kamprad, the IKEA founder who turned a small scale mail order business into a global furniture empire, has died at 91 on last Saturday 27th January, 2018.
Born in March 30, 1926, Kampard was a precious entrepreneur. At the age 17 years, he had stared selling match boxes to neighbors from his bicycle. He found that he could buy them very cheaply from Stockholm and sell them at a low price but still make a good profit. From matches, he explored to selling fish, Christmas Tree decorations, seeds and later ballpoint pens and pencils.
Kampard soon moved away from making individual sales calls and began advertising in local newspapers and operating a makeshift mail-order catalog. He distributed his products by the local milk-van, which delivered the items to the nearby train station.
In 1950, Kampard introduced furniture into his catalogue, pieces that were produced by local manufacturers in the forest area close to his home. Getting positive response, he soon decided to go for furniture business by discontinuing all other products. Hence IKEA was formed.
The great innovation that Kamprad discovered was that consumer inconvenience could be lucrative. Youngme Moon, a professor of Havard Business School wrote in her book Different :
Most global brands built their reputations around a set of positives — the good things they do for their customers. What’s intriguing about IKEA is that it has consciously built its reputation around a set of negatives — the service elements it has deliberately chosen to withhold from its consumers.
IKEA purposely built big warehouses to sell its products on the outskirts of the cities near major ports or transportation hub — improving logistics while cutting the costs due to cheaper rents and larger scale. For example the Poang Chair’s price is now $79 while it was $300 when launched in 1980.
According to Kamprad,
To design a desk which may cost $1000 is easy for a furniture designer, but to design a functional and good desk which shall cost only $50 can only be done by the very best. We have decided once and for all to side with the many. What is good for our customers is also, in the long run, good for us.
As the New York Times beautifully stated in its edition dated 28th January 2018 ,
Kamprad was, like his designer wares, a studied Every-man. He cultivated a provincial openness: curious about everything, but a face lost in the crowd. He was bespectacled and balding. with wisps of greying hair plastered down the sides, jowls, and a pointed chin. His blue denim shirts and Khaki pants might have been a gardener’s but there was hard individuality in dark eyes and compressed lips.
While he lived mostly in seclusion, he traveled to IKEA stores around the world, sometimes strolling in-anonymously and questioning employees as if he were a customer and customers as if he were solicitous employee. He spoke at IKEA board meetings and occasionally lectured at Universities. He rarely gave interviews, but made no secret of alcoholism, saying he controlled it by drying out three times a year.