Uber-efficient IKEA has more in store

To some, IKEA is the Wal-Mart of the furniture world, a big-box, buy-in-bulk retailer wrapped in the bright blue and yellow of the Swedish flag. To others, the company named in an acronym after its founder Ingvar Kamprad and his childhood home and hometown Elmtaryd in Agunnaryd, is a paragon of sustainability.

The paradox is in part due to IKEA’s strategy of pursuing environmental and social initiatives with hardly a thought to communicating either goals or results to the public. The company’s first attempt at reporting, in 2003, followed over a decade of hard work on environmental actions, such as phasing out PVC (polyvinyl chloride), radically simplifying packaging, and putting together a strict environmental and social code of conduct for suppliers.

But IKEA’s growing global presence — 234 stores in 34 countries, 2005 sales of over $18 billion — seems to have finally awakened the Swedish giant to the demands faced by multinational companies.

“We would present it this way: A part of Swedish culture is to be humble, and that’s also part of our culture — not putting ourselves on a pedestal or patting ourselves on the back,” says corporate social responsibility manager John Zurcher. “But we have also recently realized that many companies are much more transparent and visible about what they do, and we need to be more visible too. In the U.S., we have had a lot of discussion about the fact that in an IKEA store you really don’t get any communication about what we are doing.”

Three-year plan
Like Wal-Mart, IKEA is a company obsessed with low prices. Founder Kamprad is a notorious cost-cutter, and current CEO Anders Dalvig is noted for his forays to global factories to advise the locals on efficiency. In addition, IKEA’s pride is its famous “flat packs” of boards customers are expected to take home and assemble into the same functional bookshelves and counters featured in stores.

But the company has also adopted the motto “Low price — but not at any price,” a credo reflected in ambitious goals recently adopted for 2006–2009.