In this success story, we will share the biography of Ingvar Kamprad, a Swedish entrepreneur. He is the founder of IKEA, a network of furniture stores with affordable prices. Ingvar Kamprad always wanted people around the world to be able to buy beautiful furniture and home furnishings at a reasonable cost, and this desire became his mission.
Ingvar Kamprad Childhood Biography
Ingvar Feodor Kamprad was born on March 30, 1926, in a small province, Smalandiya, in Pjätteryd (now part of Älmhult Municipality), Southern Sweden. Kamprad’s biographers believe that the trading hobby was passed to Ingvar by inheritance. In 1897, the company, which belonged to the grandfather of the future billionaire, was on the verge of bankruptcy. His grandfather could not pay the mortgage and committed suicide. However, the Ingvar’s grandmother managed to save the business. So, she taught her grandson to overcome the difficulties with willpower and perseverance. Ingvar’s grandmother Francis had a substantial positive impact on him and the entire family. She was a brilliant woman, although a simple origin though.
People who worked closely with Ingvar Kamprad said he was a brilliant marketer, a wise man who never made mistakes. Indeed, Kamprnent entrepreneurs from around the world. Indeed, prominent entrepreneurs worldwide have studied and examined Kamprad’s strategy. Ingvar used to say about himself artfully that he was a dropout. Moreover, this is true as he never attended a university (school teachers could not teach him to read for a long time). The lack of a university degree Kamprad always replaced with enthusiasm. Once, he remarked: “If you work and do not feel incorrigible enthusiasm, consider that at least a third of your life has gone down the drain.”
First bargains young Kamprad made in childhood. He bought pencils and matches in bulk, which he then resold to classmates for a profit. Ingvar tried various activities during the study, from fish to Christmas card trading. That was the real school of life. He was neither trained to do business nor read books on this subject. However, we know today that the IKEA company came through thanks to the personal experience and care of the founder.
In the field of business, I guess I was a little different from the others, as I started to show business activity very early. My aunt helped me to buy the first one hundred boxes of matches on the sale of the so-called “88 Øre” in Stockholm. The whole package was worth 88 øre, and the aunt did not even make me pay for postage costs. After that I sold a box of matches at a price of 2 or 3 øre and some of 5 øre. I still remember the pleasant sensation I experienced by receiving my first profit. At the time, I was no more than five years old.
The First Major Thing – the Foundation of IKEA
The future entrepreneur sets money aside. While school peers spent their time at football fields and dating girls, Ingvar Kamprad thought about expanding the business. In 1943, when he was 17 years old, he added some money to the accumulated capital and opened his IKEA. He borrowed the money from his father, who was convinced he was giving money for Ingvars’ studies.
The name IKEA is derived from Kamprad’s initials (I.K.) plus the first letters of Elmtaryd and Agunnaryd, the farm and village where he grew up.
At the beginning of its operation, the young Kamprad traded different things (from matches to discount stockings). However, the most considerable demand was for pens. At the beginning of the 1940s, they were a novelty even in Sweden. Kamprad ordered 500 pens from Paris, taking a loan of 500 SEK from a district bank (around $63 at those times). According to Kamprad, this was the first and the last loan that he had taken in his life.
To attract prospective customers to the store presentation, the young entrepreneur promised a free cup of coffee and a bun to everyone who would come. Imagine his surprise when this modest event attracted more than a thousand people! The first presentation of the day was about to become the last one. Nevertheless, everyone got a cup of coffee and a bun. The idea of opening a fast food restaurant in each store looked great for the owner of IKEA. The time passed, and each IKEA store got a fast food restaurant.
Furniture – This is What We Need!
Further, the young entrepreneur draws attention to a feature of life in Sweden: furniture was a luxury for most people due to the high cost. In 1948, Ingvar Kamprad came up with a fresh idea and decided to engage in the furniture trade. Further, it will be the primary source of profit for IKEA.
Guimars Fabriker from Alvesta, who was my main competitor, has been selling furniture in Kagnuit for a long time. I saw his ad in an agricultural newspaper and decided to try my hand at the business. Thus, furniture sale, which I started by chance and solely to outdo my competitors, has determined my fate.
After finding places where he could buy the cheapest furniture, Ingvar agreed with fine upholstery manufacturers. The range of his store was replenished with a coffee table and a chair without armrest. The chair was called ‘Root.’ Since then, each good in the store had its name. The company’s owner invented the names due to his inability to remember the numeric items.
In 1951, IKEA started spreading booklets called IKEA News among its customers. They were those booklets that became a prototype of the modern IKEA catalogs. Young entrepreneur’s business was targeted at customers with medium and low income. For this, he ordered cheap furniture at local furniture factories. Then, he invented his famous formula: “It is better to sell 600 chairs at a lower price than 60 chairs at a high price.”
From Ingvar Kamprad’s biography, we learned that in the early 50s, he bought a small old factory in Sweden, which let him put on a production flow of even cheaper furniture for his stores. It was ‘nonsense’ to the country where furniture had always been considered an expensive commodity. Such a risky move could not remain unnoticed by competitors. Kamprad was boycotted. The Swedish Federation of Wood and Furniture Industry was so outraged by IKEA’s dumping prices that it persuaded leading loggers to cease all cooperation with IKEA.
Such a turn for any businessman could be tragic, but not for Ingvar Kamprad or the IKEA brand. Any problem and its solution generate new stages of a company’s development. As a result, the entrepreneur had to make an unusual step for the Swedish business: he began to acquire some furniture components cheaply from Polish suppliers. This is how the founder of IKEA laid out the company’s future strategy and purchased furniture components in countries where they are cheaper.
The first IKEA furniture showroom was opened in 1953 in Älmhult, Sweden. Сustomers could see and touch IKEA home furnishings before purchasing them. Five years later, a new 6,700 square meter store was opened, more or less similar to what we see today under a huge IKEA signboard. By the way, the traditional company’s colors were initially red and white. Nowadays, the IKEA network is painted in yellow and blue, the national colors of Sweden.
During that period, Ingvar Kamprad was no longer a miracle child of Småland. He turned into a confident, sleek, and dangerous competitor whose methods sometimes were perceived with contempt and resentment.
In the early 60s, Kamprad made a cognitive trip to the United States. There, he first saw how the cash and carry trade system worked. He liked the fact customers could pay in cash and carry the goods away. In 1965, the largest 31,000-square-meter IKEA Kungens Kurva store opened near Stockholm. Things were arranged there, taking into account the American experience. However, they were creatively improved. First, the store was located in a suburb. Rental land costs were much lower, and a spacious car parking lot was built. Second, to reduce the transportation costs, the company ordered ready-to-assemble furniture, where every detail was placed in a flat package. Transporting such furniture was more business-wise and cheaper, and customers had to assemble it themselves. Kamprad had noticed that people liked to self-assemble cabinets and sofas. Especially if the detailed instructions made the assembly process simple. Also, Ingvar knew that a car boom had begun in Sweden and realized that people were ready to shop in distant areas. To encourage customers to shop in IKEA, they started selling roof racks for cars for a knockdown price. Thanks to this policy, the company’s turnover has doubled in one year.
The largest store in Sweden looked like New York’s Guggenheim Museum, which Kamprad found very attractive. However, when Ingvar Kamprad opened it, he did not consider one thing: a possible shortage of goods on the store’s shelves. Many people swept the IKEA products from the store’s shelves. Thirty thousand Swedes would undoubtedly want to buy furnishings at low prices. And even in such a large store, there weren’t so many goods to sell, and a considerable part of them left at the warehouse unpacked.
Ingvar Kamprad made the only right decision and opened a self-serve warehouse. So, by accident, IKEA found a formula for success, which provided profits for many years. The self-serve warehouse was just the right thing that a modern client needed. Every IKEA furniture store is a showroom, where sofas and cabinets are exhibited as any little things of everyday life: tablecloths, curtains, bedspreads, towels, and candle holders. Thus, the visitor can see ten children’s rooms in a row, then twenty-five dining rooms or living rooms, and so on. By imagining what a particular piece of furniture will look like in their interior, a customer should go for it to the self-serve warehouse. Then, a customer transports the furniture in comfortable packages to their home and assembles it by reading clear and sensible instructions.
IKEA Explores Overseas Markets
Once the success was achieved in Sweden, IKEA had nothing to do but explore overseas markets. In 1963, IKEA started its expansion in Norway and opened the first store outside Sweden in Oslo. In addition, in the 1960s, IKEA introduced a quality control system that allowed the company’s products to be recognized as the best quality by several Swedish reputable journals. Decisions were made spontaneously. For example, the head of the company hesitated for a long time whether to open a store in Switzerland. The country was known for its conservative tastes. Besides, two local furniture chains operated quite well. But once Ingvar Kamprad, walking around Zurich, overheard a young couple. “What a beautiful chair!” a young woman said, looking into the window. “Yes, but it is still too expensive for us. Let’s buy it next year,” her husband replied. This episode was crucial. Soon, in 1973, IKEA appeared in Switzerland. Then, in Australia, Netherlands, France, USA. As of September 2023, 462 IKEA stores are operating in 63 countries.
In 1986, Ingvar Kamprad retired from Group Management and became an advisor to the parent company INGKA Holding B.V. Anders Moberg was assigned as the President and CEO of the IKEA Group. In the 1990s, the IKEA Group developed and introduced the first environmental policy to make sure that the company and its co-workers take environmental responsibility for all activities conducted within its business. Anders Dahlvig replaced Anders Moberg and became the President and CEO of the IKEA Group. In 2000, IKEA realized how essential the Internet was and introduced its customers to e-shopping in Sweden and Denmark. Since then, many IKEA stores launched online shopping in many other countries. Jesper Brodin (born November 9, 1968) is a Swedish business leader and the CEO of INGKA Holding B.V., a Dutch holding company that controls 367 of IKEA’s 462 stores.
Ingvar Kamprad has been married twice. His first wife was Kerstin Wadling, who gave him a daughter, Annika Kihlbom. However, his second wife, Margaretha Kamprad-Stennert, helped him fulfill the dream of IKEA. His wife passed away due to an undisclosed disease in 2011 at 71. She bore him three sons: Peter, Jonas, and Mathias.
The history of IKEA cannot be called cloudless as many competitors such as Argos (Italy), Ilva (Denmark), and others exist. But Ingvar Kamprad knew that his stores offer customers everything essential where they can get visual and tactile sensations and the absolute pleasure of being there. Ingvar Kamprad’s net worth was $3.8 Billion as of November 2014. The current IKEA Group’s President and CEO is Peter Agnefjäll, who was assigned to this position on September 01, 2013, and gained deep and broad knowledge and experience from IKEA.
Ingvar Kamprad died in his sleep on January 27, 2018. The cause of death was natural causes. He aged 91.
We hope you have enjoyed reading Ingvar Kamprad’s biography and the fantastic success story of IKEA.
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