IKEA case study

2. About IKEA
• IKEA was founded in 1943 by a 17-year-old Swede named Ingvar Kamprad.
• Company's name is an acronym that consists of the initials of Ingvar
Kamprad, Elmtaryd (the farm where he grew up), and Agunnaryd (his
hometown in Småland, southern Sweden)
• It was founded as mostly mail-order sales business.
• It began to sell furniture five years later.
• It is world’s largest furniture retailer.
• It’s Unique selling proportion – leading edge Scandinavian design at very
low prices.
• Products – Self assembly furniture.

4. Vision
 “To create a better everyday life for the many people.”
Business Idea
 “To 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.”
This is why IKEA has a very low price range.

7. Strengths
• Powerful brand image
• Wide range of products and styles
• Furniture is easy to assemble and ship 
• Cheap and affordable
• One stop shopping
• Appealing shopping experience
• No compromise in quality
• Unique business model
• Good relationship with suppliers
• Marketing strategies
• Unique customer service

8. Weaknesses
• Assembling furniture by themselves may not be convincing for
some consumers
• Not enough distribution channels
• Swedish designs may not be appealing to other customers globally
• Limited furniture designs
• Product dimensions unstable for global market
• Advertisements in form of catalogues mostly

9. Opportunities
• Untapped markets of mid west, corporate, etc.
• Educate costumers more thru advertisements
• Could try online stores
• Could increase the number of stores offline
• Target all levels of market

10. Threats
• Possible threats from Wal-Mart, home depot, etc.
• Economic concerns over rising living costs
• More competitors entering low price household
• Slow down in first time buyers in housing market

12. 4Ps of IKEA
 Products design, variety and range of furniture – outdoor,
children,kitchen,office,mirrors,beds&mattress,chairs,storage,
decoration, lighting, sofas, tables, etc.
 Price - Low
 Place - outskirts of large cities/ large stores
 Promotion – women, youth, children, family, fashionable people,
people who love modern and innovative stuff, low income
families

13. Promotion Strategies
Spending 70% of annual marketing budget
in printing catalogue
IKEA providing
home delivery
service to its
customers

15. IKEA in Emerging Markets

17. IKEA’s
Growth

19. Conclusion
IKEA has managed to both capitalize on its cost leadership and
ensure they meet local demands through differentiation of
products thus using transitional strategy. The price pressure which
IKEA is underlying is a major challenge because competitors are
plenty and the raw material market is volatile. At the same time
IKEA has to be careful in the ethical treatment of employees, who
do not belong directly to the organization but a part of its supply
chain.

21. Disclaimer
Presented by Radha Priyanka Jaggumantri as a
part of Summer Internship under Prof. Sameer
Mathur, IIM Lucknow