IKEA in India Challenges and Opportunities - Linneuniversitetet 3 April 2014
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IKEA in India
Challenges and Opportunities
Linneuniversitetet
3 April 2014
Welcome to
IKEA!
IKEA Business model & Concept IKEA in India – Trading/Retail IKEA values - Values in India IKEA Diversity & Inclusion IKEA view on Suppliers Future
Our vision:
To create a better everyday life
for the many people
5
Our business idea:
We shall offer a wide range
of well-designed, functional home
furnishing products at prices so
low that as many people as
possible will be
able to afford them.
Our human resource
idea:
Giving down to earth, straightforward
people the possibility to grow, both
as individuals and in their
professional roles, so that together
we are strongly committed to creating
a better everyday life for ourselves
and our customers.
IKEA
BASI
C
How we create low
prices
PURCHASING CUSTOMER
PRODUCT
DEVELOPMENT STORE
SUPPLIER
DISTRIBUTION
TRADING AREA SOUTH ASIA
TASA Macro update
India! Pakistan! Bangladesh!
Inflation 7.25% Inflation 16% Inflation 10.7%
GDP 6% GDP 3.70% GDP 6.30%
Area 3.3 mill sq km Area 0.88 mill sq km Area 0.14 mill sq km
Climate Tropical Monsoon; Climate Tropical Monsoon; Climate Tropical Monsoon;
0 to 45 degrees 0 to 45 degrees 13 to 41 degrees
Population 1.2 billion Population 190 mill Population 133 mill
Opportunities Opportunities Opportunities
Infrastructure & renewable energy, Textile manufacturing, Cotton Textile manufacturing, Ceramic
One of largest producers of Cotton & producing, Natural gas reserves industry
Steel, Language (English), Growing
economy Challenges Challenges
Economic situation, Political Environment hazards: Flooding, rising
Challenges Instability , Terrorism, Poverty, level of sea water , High Dependency
Power ( demand vs. supply), No Corruption, Illiteracy on gas, Single port
proper Inventory Management Poverty, Corruption
system, Congested ports, FDI multi
brandIKEA & India 25 YEARS!
IKEA in South Asia • 160 co-workers • 3 offices in Gurgaon, Karachi, Dhaka • 65 suppliers in the region. • Around 85,000 workers involved in IKEA production
SOUTH ASIA PRODUCES 74% OF IKEA’S GLOBAL TEXTILES!
IKEA BUSINESS IN SOUTH ASIA Textiles & Other Rugs Materials 74% 26%
Update Retail India • IKEA India have submitted a formal application in June 2012 based on the specifics of the 100% single brand FDI policy • We have got a formal approval and will be able to set up stores in India. • We will by land 2014 and start building stores • We will start local sourcing to meet the 30 % demand
TESTAMEN
T
A Furniture Dealer’s
Testament
Written in 1976, it constitutes
the conceptual basis of IKEA.TESTAMEN
T
1. The product range – our identity.
2. The IKEA spirit. A strong and living reality.
3. Profit gives us resources.
4. Reaching good results with small means.
5. Simplicity is a virtue.
6. Doing it a different way.
7. Concentration – important to our success.
8. Taking responsibility – a privilege.
9. Most things still remain to be done.
A glorious future!TESTAMEN
T
5. Simplicity is a virtue
• Complicated rules paralyse.
• Exaggerated planning is the most common
cause of corporate death.
• Simplicity gives strength.CULTUR
E
Simplicity
- in our behaviour and in our solutions.
– Simple habits, simple actions are a part of IKEA
but we must never forget to show respect for
each other.TESTAMENT
8. Taking
responsibility
– a privilege
• Only when sleeping one
makes no mistakes.
• The fear of making mistakes is
the root of bureaucracy and the
enemy of development.
• Exercise your privilege, right and
duty to make decisions and take
responsibility.CULTUR
E
– Consideration, respect, friendliness,
generosity, sincerity, admitting your
mistakes, listening to others – these are
the qualities we like to encourage at
IKEA.
This is what we mean with humbleness
– A question of taking responsibilty,
making the decisions and having the
courage to act.
This is what we mean with will-powerCULTUR
E
Leadership by example
- Set a good example by your behaviour
and thereby, create a feeling of well-being
and a good working environment.Leadership by example Striving to meet reality
Simplicity Constant desire for renewal
Cost Consciousness
Living the IKEA Values
e nt
g to b e differ
Darin
Constantly on the way
Humbleness and will power
Accept & delegate responsibility
Togetherness and enthusiasmIndians vs North Europeans
• Order & organization
• Relations vs result in business – network
• Hierarchy
• Myself vs The Collective
• 1/6 Society Rich vs Poor
• Time – efficiency Here and now orientation vs.
planning & future
• Family - extended vs Nuclear family
• Joy of life - spirituality
• Men – Woman
• Emotions – calmness & controlIKEA Group Human Resource June 2012 - © Inter IKEA Systems B.V. 2012
AN INTEGRATED
BUSINESS APPROACH
FOR DIVERSITY AND
INCLUSION AT IKEA
Be yourself! Your uniqueness makes IKEA better.
28 An integrated business approach for diversity and inclusion at IKEAIKEA Group Human Resource June 2012 - © Inter IKEA Systems B.V. 2012
Achieving diversity in numbers is
only the beginning. True diversity and
inclusion will be achieved when we
make the most out of individual
differences for the benefit of the
business and our co-workers.
Be yourself! Your uniqueness makes IKEA better.
29 An integrated business approach for diversity and inclusion at IKEASWOT
IKEA as
an
”
employer
in INDIAStrengths • Unique Culture & Values. • Family friendly company – actively encouraging work life balance. • We stand for equal opportunities – 50/50 at all levels. • A global successful company/foreign brand with 25 years of history in India. • Possibilities to offer a stable and secure employment. • Mature company with people processes and tools in place. • Local and global career opportunities within the same company.
Weaknesses • Low Brand awareness as an employer in the market. • Flat organisation, no perceived upward movement. • Compensation is at the median. • Perceived as slow in decision making
Where we are coming
from
• Since 2009 IKEA and our suppliers have developed from very labor
intensive production to automation. Asia sourcing is stronger than ever
before and we have big growth plan according to GIT 2020.
• At the same time we have also faced challenges. Despite our investment
in automation we have not reached our desired efficiency gains and
quality outcome.
• We have the ambition to build the most competent and professional
purchasing organization in Asia. We want to create industry leadership
with suppliers in partnership.
• Success depends on our people and their willpower and capability in
making things happen. Both in IKEA and at our suppliers. Competent and
motivated co-workers is one of the key enabler for creating a platform for
business growth.Today’s reality
Some facts
• Labor cost will double within 5 years
• Asia has an insufficient supply of skilled talents
• Only 1 in 10 graduates have ready to work skills
• Workforce performance will have to increase by
29% to hit business goals
• Only 22% of employees want to stay
• Employees in Asia expect to get promoted 30%
faster than global peers
• Only 14% of leaders position have ready-now
successors
• Versus global peers, leaders in Asia are 12%
younger and 27% less experiencedApril 2013 TASA Board meeting update 36
High Competence
Language
Global experience
Inclusion
Flexibility
Spirit (uality)
00 May 2012 37“You must be the change you
wish to see in the world!”
Mahatma GandhiYou can also read
