IKEA expected expansion will now slow
Monday, 02 September 2013
The new Chief Executive Officer of Ikea, the world largest furniture
retailer has decided to slow down the rate of growth of the company's
expansion rate. This comes after his predecessor had pledge to
double the pace of store openings something now being described as a
power and strategy shift
According to the Swedish business daily, Dagens Industri, referring to
the Financial Times, IKEA's former CEO, Mikael Ohlsson's goal was
to double the rate of expansion of stores to between 20 and 25
new Ikea store per year. But the new CEO Peter Agnefjäll want to
downplay that goal and instead focus on improving existing stores,
hoping that Ikea could increase its sales by 10 per cent a year thereby
double its annual revenues to about €50bn by 2020.
This year, Ikea just opened five department stores worldwide; according
to Peter Agnefjäll is a "record" number. He wants that figure not to be
higher. The expansion was even opposed by the founder Ingvar Kamprad
some months ago.
Ingvar Kamprad as well as former managers at Ikea had expressed concern
about that the cherished corporate culture in the company would be
difficult to manage with too rapid expansion of new stores in markets
such as India and China according t the reports.
The Financial Times described the Ikea management culture as the
"strong corporate culture which comes from its roots in rural southern
Sweden where thriftiness is a virtue, and Mr Kamprad’s emphasis on
shared moral values among employees."
Previous big pushes into Japan and the US in the 1970s and 1980s had to
be halted after difficulties amidst various scandals in its corporate
structure that attempted to tarnish the company's reputation.
Expansion however is said will take place primarily in existing
markets, including Sweden, the company had previously said in past
By Scancomark.com Team