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IKEA CASE

WE All KnOW thAt thE WInnErS In A CrISIS ArE thOSE WhO StAY On thEIr FEEt. All 12 rOundS

WHEN IN ROME ...

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n times of crisis, IKEA is one of those bright spots that we’re all inspired by. IKEA is a global corporation operating in more than 35 countries with more than 300 stores and 600 million visitors per year. While other retailers across the globe reluctantly close down their stores, IKEA has experienced growth during the last couple of years. This is also true for IKEA Italy, and this is where our story begins. Back in 2006, IKEA Italy was a financially strong and well-performing company that nevertheless decided to embark on a journey to increase sales and productivity, starting with IKEA Foods, in order to stand even stronger against their competitors. By now, these efforts have strengthened IKEA Italy tremendously, even in these times of crisis, and more importantly the accomplishment has served as a best practice example to other IKEA stores across the globe. Not an insignificant achievement considering the changes that have occurred in the global economy since then and the omnipresent turbulence in the business environment.

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he first task was to optimise sales by offering customers what they wanted, when they wanted it – and always in the IKEA spirit: low prices and high volumes. Next was a productivity


IKEA and the Italian Furniture Market 150

Indexed growth in 2006 – 2011 (EUR millions) 140

IKEA Italy 128

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Furniture market in Italy 115

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2008

improvement project which at the time of writing is still unfolding. All with one common purpose: making more from the same resources. “ In IKEA Italy, our culture is based on two things: one is the ability to always do better, work smarter and get the most out of our employees. The other is the way we perceive IKEA. It isn’t just a job, but a way of life – a family. It may sound tacky, but nevertheless this is the case. More specifically, this means that we go to extreme lengths not to dismiss employees to reduce costs. The management has been focusing solely on a productivity enhancing strategy, making the most out of what we already have,” Dino Maldera, Head of IKEA Foods in Italy, explains.

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ino emphasises how “The management this culture has perhas been focusing meated the journey towards increasing productivity solely on a productivity because everyone trusted that this enhancing strategy, was about growing as a company and not about reducing staff. The making the most out of journey began with an extensive what we already have”. assessment of IKEA Foods’ current productivity levels in Italy and later expanded to the rest of IKEA Italy. Each and every store in Italy was scrutinised, linking activities to people and spotting best practices within each key activity and process. The analyses resulted

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in recommendations within seven areas: four within business improvement and three within system improvements. And the conclusions were staggering: by implementing these business recommendations, IKEA would be able to improve their productivity by 20-40 per cent all while decreasing operating costs by 10-20 per cent.

The key questions to ask were pretty obvious to us: where does each employee create most sales and most value for the customer, and which activities create most value for the company? If we could come up with the right answer, we would stay ahead of the game. The goal for us in Italy is to stand strong in times of crisis and even stronger when we are out of the woods. Many of our competitors are struggling, and we see no other way out than doing the right thing and working hard – and do it now,” Dino emphasises. “This is no time to rest on the laurels. The goal is clear: to create a stronger and leaner IKEA ready to accelerate when the crisis wears of ”.

Dino Maldera,

Head of IKEA Foods in Italy

35 IKEA is a global

corporation operating in more than 35 countries with more than 300

stores and 600 million visitors per year


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