Simple Lessons In Affordability
“What is good for our customers is also, in the long run, good for us.” ~ Ingvar Kamprad
IKEA was created from a simple philosophy—that everyone, regardless of geography, circumstances, and income, deserves access to quality furniture in which to live well. With this singular purpose, Ingvar Kamprad made comfortable, affordable. His great innovation was the realization that the primary cost of furniture was in its assembly. This cost along with shipping fees were then passed on to consumers. So, he decided to build and sell unassembled, quality furniture that consumers put together themselves. The furniture could be packed in flat boxes, eliminating assembly costs and beating out his competition.
Eventually, other Swedish furniture manufacturers decided to boycott IKEA. Kamprad ran into restrictions in obtaining wood and other raw materials. Without access to these resources, IKEA’s future was uncertain. However, Kamprad knew there was a need for his product and he also knew that he needed to keep costs to consumers low. His mission was to make peoples’ lives better by assuring access to affordable home furnishings. To do this he made a strategic decision in the early 1960s to outsource his plant to Poland where there was plenty of wood and cheaper labor. Poland in the 1960s was a less than ideal country to conduct business. It was still a Communist country and lacked the skilled workers or manufacturing infrastructure that Kamprad had access to in Sweden. Against all odds, he made it work.
Kamprad’s commitment to his vision and mission for IKEA never waivered. He knew there was a real need for his product and to have an impact it also needed to be affordable. Additionally, IKEA’s products had to be versatile to meet consumers’ needs. Not everyone lives in large houses. Most people live in small apartments or modest sized homes and need furniture that fits their lifestyle without sacrificing quality. Kamprad’s philosophy does not only focus on simplicity. He repeatedly rejected the idea of IKEA being considered the “best” and instead was a fanatic about ongoing improvements and implementing best practices.
In an effective IKEA marketing campaign, they sought to better connect with their consumers. IKEA renamed some of their products on their retail therapy page in an attempt to provide solutions for their consumers’ most Google’d problems. For example, you may be interested in purchasing their daybed called My Partner Snores or a mattress wedge named She Doesn’t Want to Cuddle (which may be an indicator of a larger problem that IKEA is not seeking to solve). Few may take this page seriously, and while it may be a little tongue-in-cheek, it demonstrates an interest in their consumers’ life circumstances and an attempt at offering a solution with a reminder that “yes, everything, can get better.”
Higher education can learn six lessons from Ingvar Kamprad’s IKEA.
Identify a need. Everyone deserves to have access to opportunities that improve their lives.
Provide an innovative solution. Problems sometimes need creative, out-of-the-box answers.
Be unwilling to compromise. Believe in your why.
Focus on continuous improvement. Don’t try to be better than your competition, strive to always be better than yourself.
Consistently seek to meet consumers’ needs. Take the time to, first, understand.
Maintain affordability without sacrificing quality. All the bells and whistles are great, but not at the expense of preventing access or driving up costs.
The world is shifting. The funding once available to higher education is diminishing. The student population is changing. Higher education is tasked with developing a quality, low-cost option. In the end, the biggest impact is made when everyone receives opportunities to live their life well.
“To design a desk which may cost $1,000 is easy for a furniture designer,
but to design a functional and good desk
which shall cost $50 can only be done by the very best.”
~ Ingvar Kamprad
Students deserve the very best.
