Uncharted Territory


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How Ikea took over the world
By Beth Kowitt

In a stunning global expansion, the Swedish home furnishings giant has been quietly planting its blue and yellow flag in places you’d never expect. Pay attention, Wal-Mart: You could learn a few things.

Even with all that careful planning, Ikea managed to get a few things wrong. It misjudged the number of parking spaces needed, and a seemingly benign map for sale upset some customers: The body of water east of Korea was labeled the Sea of Japan rather than the East Sea, as South Koreans prefer.

But the Koreans seem, for the most part, to have forgiven the Swedes. Today the Gwangmyeong store, which is the company’s largest in the world by shopping area, is on track to become one of Ikea’s top-performing outlets for 2015.


The success is hardly a fluke. Ikea, it seems, is a genius at selling Ikea—flat packing, transporting, and reassembling its quirky Swedish styling all across the planet. The furniture and furnishings brand is in more countries than Wal-Mart, Carrefour, and Toys “R” Us. China, where Ikea has eight of its 10 biggest stores, is the company’s fastest-growing market. An outlet in Morocco is coming soon, and there are hints that Brazil may not be far off. Meanwhile, Ikea is going meatballs out in India, where it plans to invest about $2 billion over a decade to open 10 stores.

Getting it right in emerging markets like China and India, where Ikea is well-positioned to capitalize on a growing middle class, is a key factor in its goal of hitting €50 billion in sales by 2020. That’s up from €28.7 billion in its fiscal 2014 ($39 billion based on the average exchange rate for Ikea’s fiscal year) and almost double its 2005 sales level. Today the Ikea Group has 318 stores, not including the brand’s some four dozen franchised locations; it’s aiming for around 500 by 2020.


There are important lessons here for Wal-Mart, which has sometimes struggled overseas, and for Target, featured in Fortune’s March 1 issue, which recently decided to pull out of Canada after a disastrous expansion.

The Ikea model is based on volume—producing a lot of the same stuff over and over, which helps it secure a low price from suppliers and in turn charge a low price to customers. One Billy bookcase, an Ikea classic, is sold every 10 seconds. More stores mean more volume and the chance to drop prices even more, which Ikea did by an average of 1% last year.

For the company, this isn’t just a business model, apparently. It’s a mission: helping “the many people” and those with “thin wallets,” which is a mantra spoken by company employees everywhere from Croatia to Qatar. “We’re guided by a vision to create a better everyday life for the many people. That is what steers us, motivates us—that is our role,” says Ikea Group CEO Peter Agnefjäll, a 20-year company veteran, who took the helm in 2013. “We feel almost obliged to grow.”


Today research is at the heart of Ikea’s expansion. “The more far away we go from our culture, the more we need to understand, learn, and adapt,” says Mikael Ydholm, who heads research. Rather than focus on differences between cultures, it’s his job to figure out where they intersect.

The company, for example, did a study of 8,292 people in eight cities, examining morning routines. People are the fastest out the door in Shanghai (56 minutes) and the slowest in Mumbai (2 hours, 24 minutes), where they’re also the kings of the snooze (58% hit the button at least once). New Yorkers and Stockholmers are the most likely to work in their bathrooms (16%). But regardless of city, women spend more time than men picking out their outfit for the day, a process many find stressful.

ただし、各国向けに商品開発するのではなく、商品の使用方法をその国に合わせてアレンジしていくというようです。動画でもtatamiと言っていましたが、the Japanese version might incorporate tatami mats, and the Dutch room will have slanted ceilings, reflecting the local architecture.と日本とオランダでの商品ディスプレイを変えているようです。

The aim of gaining all this cultural knowledge is not to tweak the products for each market. The Ikea model, remember, is volume, volume, volume: It needs vast economies of scale to keep costs low, and that means creating one-size-fits-all solutions as often as possible. Rather, Ikea has gotten awfully good at showing how the same product can mesh with different regional habitats.

Witness the full-size sample rooms that Ikea sets up in stores and where customers will sometimes be caught napping. The rooms play an essential, if secret role, showing consumers how to fit Ikea pieces into their lives. Displays in Sendai, Japan, and Amsterdam could feature the same beds and cabinets, for example. But the Japanese version might incorporate tatami mats, and the Dutch room will have slanted ceilings, reflecting the local architecture. Beds in the U.S., meanwhile are covered with pillows.


Ikea’s catalogues serve a similar purpose as the sample rooms—and, again, the company has invested in the strategy in a comprehensive way. Catalogues come in 32 languages and 67 versions, with each reflecting local customers and customs. There are two catalogues for Belgians: one in French, another in Flemish. Ikea customers in Winnipeg and Calgary typically see a different version from their Francophone countrymen in Montreal.

Ikea printed 217 million copies of its most recent annual tome—which the company claims is the biggest run of any publication of its kind in the world—producing them in a studio in Älmhult, Sweden. For every room setup, there is an Ikea employee standing by responsible for tracking any element that needs to be switched out—making sure that glass products produced in mainland China don’t show up in Taiwan’s catalogue and removing Persian rugs from the one that gets mailed to Israelis.

Ikea has not always gotten these local nuances right. The company came under fire for Photoshopping women out of its catalogue in Saudi Arabia and for removing a lesbian couple from its magazine in Russia. “We have done mistakes,” acknowledges Kajsa Orvarson, communications officer at Ikea Communications, the home of the catalogue, “but we are becoming more and more aware of how to improve and to share our values.”


Ikea’s designers look well beyond the furniture industry for expertise when it comes to trimming production costs. They’ve commissioned a shopping-cart manufacturer, for instance, to mass-produce a new table and a bucket maker to punch out a chair. As the price of wooden drums declines, Engman has considered using a drum supplier for round tables. The same goes for materials such as cork, which is in greater supply as wine bottles increasingly employ screw tops and plastic stoppers.

So, too, design inspiration comes from everywhere. Engman points out a folding table that he saw in bars and restaurants throughout China. “It costs near to nothing,” he says. “It is the smartest table. It has the construction of an ironing board.” He is also excited these days about acacia wood, which Ikea sources primarily from Southeast Asia. Normally used in outdoor furniture, acacia has the properties of teak but the price of pine. Its downside is it turns as it grows and does so even more when it dries, making it hard to glue together. (That’s why particleboard became so popular in furniture; it’s also cheap, and every piece is alike.) But Engman says his team had a “breakthrough” in working with and drying the wood.

部屋や店の改装はTOEICでも登場します。Bedroom makeoverという動画がありました。

1 if you give someone a makeover, you make them look more attractive by giving them new clothes, a new hair style etc
2 if you give a place a makeover, you make it look more attractive by painting the walls, putting in new furniture etc:
It's time we gave the kitchen a makeover.


I decided to buy a top-of-the-line Ometro refrigerator for my newly remodeled kitchen.