Key Drivers of Innovation and Success of IKEA

Strategy, Enterprise and
Innovation

Contents
INTRODUCTION...........................................................................................................................2
MAIN BODY...................................................................................................................................2
A brief introduction of case study analysis report on IKEA..................................................2
Identify and evaluate key drivers of innovation leading to the success of IKEA with the help
of models or framework.........................................................................................................3
With the help of appropriate model or frameworks, critically analyse the different approaches
undertaken by IKEA to help in shaping its vision and business model.................................5
With the help of Blue Ocean tools and framework support and justify that the success of
IKEA can be attributed to the successful implementation of the “Blue Ocean Strategy”.....7
Draw a conclusion which succinctly highlights the key aspects covered in the report in answer
to above tasks.......................................................................................................................10
CONCLUSION..............................................................................................................................10
References:.....................................................................................................................................11
Books and Journals...............................................................................................................11
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INTRODUCTION
Changes are taking place at a incredible and fast pace, technological advancements, new
and innovative ideas, drastic change in needs and demands of a customer due to the globalisation
have gave a birth to the concept of strategy, enterprise and innovation which looks at the aspect
of developing and shaping the skill set of an individual with the aim of bringing new, unique and
creative approaches or ideas into an organisation which help in gaining a competitive edge over
other and for a continuous survival of business enterprise (Feyissa, Sharma and Lai, 2019).
Through unique and interdisciplinary approach, Strategy, enterprise and innovation focus
majorly on few aspects such as sustainability, Corporate Social Responsibility and international
business. IKEA was founded way back in 1943 by a 17 year old young talented Ingvar Kamprad,
in Sweden. It is a multinational conglomerate which design and sell ready to fit furniture, home
accessories and kitchen appliances. Since 2008 IKEA is a leading furniture retailer in the world.
The report covers key drivers of innovation, different approaches which shaped vision and
mission of IKEA and successful implementation of Blue Ocean Strategy which have lead to the
success of IKEA.
MAIN BODY
A brief introduction of case study analysis report on IKEA
IKEA is an acronym of first letter of founder Ingvar Kamprad, Elmtaryd, name of farm
where he grew and Agunnaryd, the nearby village where he was born. The company was
founded when he was merely 17 years old and began entrepreneur at the age of five by selling an
essential item in every home that is match box to support the earning of family. With the
evolution of time IKEA have become world’s largest furniture retailer with 445 stores in 6
continents majorly in Europe and North America. The first store was opened in 1958 in Sweden
and Germany has the maximum stores of IKEA in world (Gershman, Roud and Thurner, 2019).
Unlike most of the entrepreneurs, the idea sparked from the challenges and difficulties faced by
his family and others present in the village. Post war Swedish government built lots of houses
and offered loans for home furnishing and there were few and small furniture factories and
described his objective to the people of countryside who valued products with low price and high
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quality. The vision of IKEA then was to “create a better life for many people”. The case study is
all about the key driver factors of innovation that have made the IKEA one of the leading and
successful brand in the world along with different approaches adopted by IKEA to shape vision
and mode of a business (Chin and et. al., 2019).
Identify and evaluate key drivers of innovation leading to the success of IKEA with the help of
models or framework
There are numerous challenges that a business face while operating in a market
environment. In order to address and overcome those challenges there are numerous key drivers
of innovation which help business in develop new and unique ideas which lead to have a more
competitive edge over others. Below mentioned are the four innovation framework that will help
IKEA in carving a path for success.
 Alliance versus Acquisition: With the rapid changing technology and demand of a target
market it is imperative for a business to make a continuous improvement and
development in business activities so as to serve the customers in a better and productive
way than before. One of the significant way in which a company can stand out different
from others is making alliance with the best in segment or by acquiring a small and
medium entrepreneurial ventures which comes up always with new and innovative
approach. In order to do so the first and foremost task of IKEA is to identify the purpose
and objective of their business for such alliance or acquisition (Liedtka and Kaplan,
2019). Whether it is for getting a new talent, capturing a large market or getting a new
technology or machinery. However, making acquisition may lead to loss of talented and
skilled workforce and is sometimes costly and time consuming. It is recommended for
IKEA, by considering resources available, market conditions and reason for partnership,
to form an alliance which will enhance the brand image of company and will help in
diversification of business.
 The M&A playbook: Another significant key driver of innovation of Merger and
acquisition playbook which help the business in figuring out what to do next after a new
merger and acquisitions (Fernando, Jabbour and Wah, 2019). IKEA considers two
aspects while making a decision which is whether the new merger and acquisition is with
regards to the same way of doing business in a better way or to operate in a market with a
complete new and innovative approach which have could not have done even before by
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