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Designorate

Design thinking, innovation, user experience and healthcare design

IKEA’s Sustainable Design Strategy (Part 2)

In the  first part of this article , we explored the design sustainable strategy’s key role in achieving the organization’s business targets, and its creativity places it ahead of competitors in the market. The design role has a more holistic approach than just product design. Design strategy and management are essential in forming the company’s whole vision and strategic planning, including the consideration of environmental design and the reduction of the environmental impact on the production life-cycle of their products.

Design at IKEA is inspiring the continued philosophy of its founder, Ingvar Kamprad, through a focus on people and creativity. This is reflected in the company environment, co-workers, and retailers. IKEA’s stores are also designed to achieve the maximum amount of comfort and pleasure for consumers and give them a chance to make their buying decisions by considering circular economy models to reduce the energy use in their sustainable buildings (indoor environmental quality).

IKEA and Sustainability

IKEA has commitments to its customers and the environment that couldn’t be accomplished without strategic design for both products and the whole process. IKEA’s commitment to its consumers is to provide creative products that are functional and high quality at the lowest price possible. At the same time, the product must comply with IKEA’s sustainability strategy, which aims to create a product that meets consumer expectations while maintaining natural resources through the utilization of renewable energy, recycled materials, and recyclable materials.

In this part, we will continue to explore how IKEA implemented its expertise to build a long-life strategy to achieve sustainable design benefits.  Read the first part of this article:  Guide to IKEA’s Sustainable Design Strategy (Part 1)

Sustainable Design: People and Planet Positive

Sustainability has been part of  IKEA’s commitment to society  for a long time. In 2012, IKEA launched its circular strategy for 2020, known as the “People and Planet Positive” strategy. This initiative aims to take sustainability to a new level in order to:

– Drive the innovation process.

– Transform the business.

– Share investments and open new business opportunities.

The anticipated rewards for applying the above goals in an integrated approach with the company’s strategy are to increase IKEA’s competitive strengths, secure long-term access to resources and raw materials, maintain and develop its supplier base, improve relationships between IKEA and both its co-workers and consumers, increase productivity, and put IKEA in the lead position to act for the good of people and the planet.

IKEA builds its strategy on a deep understanding of the essence of circular economy, rooted in three principles which are inspired by sustainable design principles:

– Sustainability is not a luxury, and people shouldn’t have to choose between it and other buying factors, such as design, function, quality, or price.

– Sustainability means working for the good of the people (social impacts) and planet without compromising future generations to meet current needs.

– IKEA’s strategy is to put back more than it takes from nature and recycle the waste to create new resources through the adaptations of current raw and recycled materials.

People and Planet Positive Objectives

Sustainability is the driver for innovation and transformational change at IKEA as it drives the designers to create environment-friendly products.

The “ People and Planet Positive ” strategy is built on three main objectives that should be pursued to make IKEA’s innovative business more sustainable and reduce the negative impacts of production:

1. Design and inspire millions of people to adopt circular practices in their homes through IKEA’s sustainable products that save energy, reduce waste, and use less water — all at the lowest possible price.

2. Secure long-term access to raw materials and build resources and energy independence through raw materials supply strategies.

3. Take the lead in creating a better life for people and communities by extending the use of the code of conduct (IWAY) through IKEA’s supply chain.

In order to apply the “People and Planet Positive” strategy, design plays an essential role throughout the different aspects of the plan:

– The design of IKEA products uses renewable, recyclable, and recycled materials in their manufacture. Storage and transportation of IKEA products to stores and retailers are reduced using the self-assembly model and eliminating the middleman model.

– The design of IKEA stores saves energy and ensures the most efficient utilization of the space.

– Designing the price for each product meets IKEA’s low-price strategy.

– Considering people in the design (human-centred design) creates a better life for people.

IKEA GRANSKAR

Policy Impact Statistics

Based on the IKEA Group Report 2012, the following statistics show the impact of applying sustainability measurements to IKEA’s design process:

– Six per cent of wood comes from Forest Stewardship Council-certified forests, an increase from 16.2 per cent.

– During operation, 86 per cent of waste is recycled.

Plans are in motion to move to full LED lighting by 2016.

– Thirty-four per cent of cotton is produced from sources that fully comply with IKEA guidelines.

– A 17 per cent reduction in carbon emissions in IKEA buildings. And 32 per cent more efficiency in energy-consuming products.

– A 3 per cent improvement in energy efficiency compared to 2011.

The price value of IKEA’s design strategy

IKEA’s low-price policy is an example of focused cost leadership. This strategy focuses on producing cost-effective products at a low price by targeting a narrow market segment. In IKEA’s case, the target customers are young buyers who would like to decorate their homes with beautiful and smart products with the lowest budget possible and at the same time, they don’t compromise quality.

Unlike other furniture stores, IKEA’s products are arranged based on the rooms of the home rather than the type of the product. This helps consumers see different options and choose products that fit with each other in a low price range.

Because the design phase plays an essential role in the IKEA production line, it has a deep contribution to determining a product’s price and even reducing this price to meet IKEA’s strategies and compete with other products in the market. Following are some of the design strategies that help reduce IKEA product prices:

– The product design process aligns the price to a strategic focus model. When designing a new product, IKEA determines the target price and the market need. Subsequently, the designer starts to build the design based on this model.

– Low-priced raw materials used in a sustainable way contribute to IKEA’s price policy and sustainability strategy. The raw materials used in IKEA products should be renewable and recyclable. The raw materials are covered earlier in this report on the Democratic Design strategy.

– The self-assembly model helps reduce storage and transportation costs, which affect the final price. Additionally, the carbon emissions produced from transporting products decrease to support IKEA’s strategy.

 Human-centred design strategy at IKEA

IKEA’s design strategy focuses on people and the environment. While the company strategy’s major focus is the environment and reducing the consumption of the planet’s resources, the design’s major focus is human health and how to provide a product design that meets consumers’ requirements and needs, which are form, functionality, quality, sustainability, and low price. This design strategy is a perfect example of sustainable design principles. Human-centred design is defined by Krippendorff in1989 as:

“an approach to design and research that takes seriously the proposition that behaviour and understanding go hand-in-glove, that the use of artefacts is inseparable from how users conceive of them and engage with them in their world. Let me state the proposition more concisely: Humans do not respond to the physical qualities of things but to what they mean to them.”

IKEA solar panel

The IKEA design process meets the human-centred design definition above in both the production and marketing context. Implementing the human-centred concept in the production process is previously covered in the Democratic Design strategy earlier in this report. The marketing strategy includes a number of methodologies, including the design of IKEA stores. The target of IKEA store design is to give customers the maximum level of comfort and a relaxing experience in order to help them make buying decisions. Categorizing products based on the room of the home and their relation to each other is another method that helps consumers see different combinations and make a decision about which items to buy for every room in their homes.

IKEA wind farms

The self-assembly policy contributes to both the design strategy as well as the circular economy strategy that was discussed earlier in the price value strategy section of this report. As a requirement for human-centred design, IKEA product design should comply with the self-assembly policy so customers can easily get the product from the loading zone into their cars with the least amount of effort possible to achieve the environmental benefits in their branches. The self-assembly strategy involves customers in the design process as they assemble the design in their home based on completely visual instructions that are understandable without the need for any writing. If the consumer faces any trouble assembling the product, IKEA provides an assistance service by phone.

Design for Sustainability Model (D4S)

To build beneficial relationships between companies with the circular and social impact in mind, the United Nations Environment Programme (UNEP) initiated the Design for Sustainability model (D4S). This strategy aims to provide a model for companies that improves profit margins, increases product quality, and builds market opportunities while maintaining a positive social impact. The D4S model acts like an auditing procedure for companies to identify how each complies with the regulations, such as energy savings, using recycled materials, and reducing toxic materials. The UNEP initiative encourages companies in developing economies to apply the D4S measurement, but most of these companies are considered small and medium enterprises (SMEs), and they do not have the awareness, budget, or experience to apply the sustainability measurements and ensure that their product or service design meets them. Many of these SMEs follow larger companies that have the resources to apply D4S measurements, such as IKEA.

IKEA’s Social Impact

IKEA provides a practical example of how to utilize resources in developing and under-developed countries to attain high-quality and low-price raw supplies that can be produced into goods under the IWAY quality control measurements. The benefits of applying this model are higher profit margins for IKEA and better opportunities for developing countries small businesses and individuals to produce raw materials and basic products that meet the D4S rules and guidelines. Applying the D4S aligns with IKEA’s “People and Planet Positive” strategy to secure long-term access to resources and build energy independence.

sustainable design

The mechanism of IKEA’s model is based on training individual groups and start-ups to raise plants or animals using the least amount of chemical pesticides and fertilization possible and save energy and resources. While the companies and individuals in developing countries experience a lack of infrastructure resources, such as water and energy, the energy-saving practices and wise usage of natural resources help them to be more productive and, in turn, to be part of IKEA’s production process using what they already have.

In the IKEA Group Report for 2012, IKEA was able to make a difference for cotton farmers by helping them become involved in the IKEA and WWE project and apply circularity in the agriculture components, such as using drip irrigation and organic fertilizers instead of the chemical ones and using less energy.

Applying IKEA’s strategy required creative design processes and innovative solutions in order to overcome the obstacles that were faced across all phases, from product design and the company production process to facilities and stores.

Design plays an important role in achieving IKEA’s goals on multiple levels. The product design process has to meet the quality, price, and sustainability challenges, such as determining raw materials and creating a product design that ensures energy and resource savings. Additionally, the product design must take the least amount of storage and transportation space possible and be able to be self-assembled.

IKEA provides a clear example of how a company can lead the market through design and creativity. The design strategy helped IKEA to keep its commitment to people and the planet to achieve a better life for everyone.

Read the first part of this article:   Guide to IKEA’s Sustainable Design Strategy (Part 1)

Dr Rafiq Elmansy

I'm an academic, author and design thinker, currently teaching design at the University of Leeds with a research focus on design thinking, design for health, interaction design and design for behaviour change. I developed and taught design programmes at Wrexham Glyndwr University, Northumbria University and The American University in Cairo. Additionally, I'm a published book author and founder of Designorate.com. I am a fellow for the Higher Education Academy (HEA), the Royal Society of Arts (FRSA), and an Adobe Education Leader. I write Adobe certification exams with Pearson Certiport. My design experience involves 20 years working with clients such as the UN, World Bank, Adobe, and Schneider. I worked with the Adobe team in developing many Adobe applications for more than 12 years.

ikea design case study

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IKEA Explores Future Urban Living for the Many

ikea design case study

  • Written by Megan Schires
  • Published on June 04, 2019

Some assembly required for this vision of future urban living. Known for simple, well-designed, flat-pack furniture, IKEA is proposing expanding their DIY-model to a much larger scale: entire city centers. Democratic Design Days is an annual event where IKEA introduces its upcoming brands and collaborations, this year featuring The Urban Village Project , a collaboration between SPACE10 and EFFEKT Architects. After two years of research, SPACE10 ( IKEA ’s global research and design lab) is releasing their vision to the public for a new way to design, build, and share our homes, neighborhoods, and cities.

ikea design case study

In light of the growing housing and environmental crises facing the human population, the project aims to create more livable, sustainable, and affordable homes to address the new and upcoming urban challenges we’ll have to face. Rapid urbanization, an aging population, social isolation, climate change , and a lack of affordable housing all point to a need to rethink our approach to cities and urban life.

ikea design case study

With an overarching goal of improving our quality of life, The Urban Village Project includes a multi-faceted approach. Shared living communities provide a variety of options for different types of families and living situations: from a single person, to a group of roommates, to multi-generational families, the housing is designed to be adaptable within a modular building system.

ikea design case study

Taking the trademark IKEA route of prefabricated, flat-packed kits, the homes are even designed to be disassembled for future reuse and recycling. Using a sustainable and CO2-reducing method of construction, the buildings will also utilize cross-laminated timber for its environmental and structural performance. These high-quality homes would have access to shared services and facilities, as well as a digital interface for day-to-day management.

ikea design case study

“ Urban Villages is based on a modular building system which allows us to configure a wide range of different housing typologies for different urban settings. The system is designed for disassembly, unlocking a truly circular material loop where building components and materials can be reused and replaced rather than wasted. This could be a game changer for the building industry.” says Sinus Lynge, partner, EFFEKT Architects

Not only is the design and building of cities being reimagined, but also the financing and development of how cities are formed. To create a lower entry point into the housing market, The Urban Village Project will seek to partner with long-term investors to finance construction. Community land trusts and a cooperative housing system would also encourage the entry of cheaper homes onto the market and secure community interests.

ikea design case study

Flexible subscription-based services, on top of a base monthly rate for essentials, allow for better deals on daily needs; each month, residents would also have the option to buy "shares" of real estate. This incremental approach makes homeownership more accessible while also creating a chance to make money in the future as owners progressively gain equity and property values increase.

Today we’re in the middle of a global housing crisis with a seemingly unattainable number of affordable housing units in demand. 1.5 million people move to cities every week, meaning in just over ten years, 1.6 billion people are projected to lack affordable, secure housing. Existing metropolitan areas are also running out of space - approximately 40% of the area that will need to urbanize by 2050 does not yet exist, giving a blank canvas for us to determine the future of urban life.

ikea design case study

SPACE10 researched and explored the idea of shared living for two years. Together with EFFEKT Architects and IKEA , SPACE10 have condensed those insights into a concrete concept and vision on which they now ask the world to give feedback.

You can explore the concept of The Urban Village Project here: www.urbanvillageproject. com

EFFEKT Architects: EFFEKT is a research-based, multidisciplinary architecture and planning studio. Their aim is to create a lasting social, economic and environmental effect ensuring societal value in a local, regional and global context. Norgram Studio: Norgram Studio is the Design Director duo of internationally recognized and awarded designers Sebastian Gram & Mathias Høst Normark. Norgram is the design studio behind the digital layer. SPACE10 : SPACE10 is IKEA ’s global research and design lab. SPACE10 is on a mission to respond to the major societal changes expected to affect people and our planet in the years to come; alongside that, we’re here to inspire IKEA to find new ways of living up to their original promise of creating a better everyday life for the many people.

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Infill Village Europe. Image Made by EFFEKT Architects for SPACE10

宜家:未来城市生活愿景需要装配式建筑

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Are you looking for an IKEA case study according to Michael Porter’s Five Forces?

Porter’s IKEA case study shows one company’s success in fitting together business activities, business strategy, and operations. His analysis shows how the activities connect to create a uniquely competitive business.

IKEA’s Fit Between Activities

Good strategies depend on the connection among many things. Fit means the value or cost of one activity is affected by the way other activities are performed – in other words, “synergy.” If the activities fit together, they each meaningfully contribute to the company’s increased value or lower cost, and they work strongly together. The IKEA case analysis below is one example of fit between different activities.

This is a clear departure from the (mistaken) idea of the one core competence. If strategy truly is based on one core competence, then it becomes relatively easy to replicate. More often, industries compete fiercely to control the one key “resource” – distribution channels, product portfolios – thus driving up cost. In reality, strong strategies are built on many unique activities that fit together to deliver the unique value proposition. Later, you’ll see how fit works well in the IKEA case study, despite certain trade-offs.

Fit arises in 3 ways . Keep this in mind when you read the IKEA case analysis:

  • Example: many of Southwest’s activities are directionally pointed toward lowering cost and increasing convenience.
  • When activities are inconsistent, they cancel each other out.
  • Netflix’s large catalogue gives more chances to collect data points to make better recommendations.
  • IKEA’s room displays substitute for sales associates, thus lowering cost.
  • Dell will preload software onto PCs, substituting for the customer’s IT department.

Fit discourages rivals in a few ways:

  • With a large range of activities, it becomes unclear which of the company’s activities are most valuable to replicate.
  • As a simplistic example, say there are 5 activities that give a company a competitive advantage. If the chance of replicating one activity is 90%, then the chance of replicating all of them is 0.9^5, or 62%.
  • An activity that fits one value chain can punish a different value chain, if it lacks synergies with the other activities or contradicts them.
  • Activities with fit make it easier to see where the weak link in the chain is (think about this in the IKEA case analysis later).

The IKEA Case Study

Let’s examine a masterpiece of strategy in IKEA using the IKEA case study analysis. Their mission is to deliver stylish furniture at low prices. Their activities show clear trade-offs and strong fit:

  • Assembling furniture yourself also seems to increase your enjoyment of it, maybe because of endowment effect. 
  • Compact boxes reduce freight shipping costs from the manufacturer.
  • This means time from buying to having furniture in your house is much faster than shipped furniture.
  • IKEA stores are huge warehouses in large suburban locations with highway access. With large parking lots and loading zones, they allow customers to self-service and deliver their own furniture.
  • IKEA showrooms have minimal staff, with the entire inventory laid out for buyers to peruse.
  • IKEA cafeterias are self-service and customers are encouraged to bus their own trays.
  • IKEA designs its own products, allowing trade-offs in styling and cost.
  • Furniture has few customization options, allowing production in bulk and bargaining at scale.
  • A narrower catalogue also allows IKEA to keep its warehouses fully stocked, instead of requiring shipping.

Many of these activities fit together and reinforce each other to provide low-priced furniture. The furniture’s self-assembled design reduces manufacturing costs, storage costs, shipping costs from manufacturer, and shipping costs to customers. In turn, IKEA’s locations make the furniture’s self-assembled design even more effective. 

Note how each activity is distinctly a trade-off : you either have furniture disassembled or not. You either have salespeople on the showroom floor or not. This is one of the aspects covered in the IKEA case study analysis.

Many traditional furniture retailers practice the inverse of IKEA’s value chain. If they tried to adopt one of IKEA’s activities, they’d find it less compatible with their own value chain, and so they’d gain very little of IKEA’s competitive advantage.

Note too that, in making these tradeoffs, IKEA is deliberately alienating customer groups – those who want furniture ordered seamlessly to their homes, who want nice salespeople to guide them through options, who want unique and fancifully designed furniture. The IKEA case study analysis shows how trade-offs can sometimes have big strategic payoffs.

Activity System Map

To visualize the strength of fit between activities, place the activities on a map.

  • Start by placing the key components of the value proposition.
  • Make a list of the activities most responsible for competitive advantage
  • Add each activity to the map. Draw lines wherever there is fit: when the activity contributes to value proposition, or when two activities affect each other

Here’s an example for IKEA:

ikea design case study

A densely interconnected activity map is a good sign. A sparsely connected map shows weak strategy.

The activity map isn’t useful just for description of your current strategy. It can also be used for ideation for new strategies:

  • Can you improve fit between activities? 
  • Can you find ways for an activity to substitute for another?
  • Can you find new activities or enhancements to what you already do?
  • Are there new products or features you can offer because of your activity map, that rivals will find difficult to emulate?

Porter’s IKEA case study is an example of a competitive business in a particular area of an industry. Porter’s IKEA case study shows business activities and strategy intersecting successfully.

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  • How IKEA, Southwest Airlines, and Zara have ironclad, defensible strategies
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Carrie Cabral

Carrie has been reading and writing for as long as she can remember, and has always been open to reading anything put in front of her. She wrote her first short story at the age of six, about a lost dog who meets animal friends on his journey home. Surprisingly, it was never picked up by any major publishers, but did spark her passion for books. Carrie worked in book publishing for several years before getting an MFA in Creative Writing. She especially loves literary fiction, historical fiction, and social, cultural, and historical nonfiction that gets into the weeds of daily life.

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IKEA Case Study| History of IKEA| IKEA Business Model

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August 31, 2019

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Ikea Case Study- (Business Model)

2 Minute Summary

IKEA is one of the biggest furniture companies in the world founded by a carpenter named Ingvar Kamprad who was 17-year-old, in Sweden in 1943. Everybody knows that Ikea offers the products at a very lower price than any retail shop. Ikea has invested 800 crores in India, It has more than 9500 Products and has more than 350 stores in 35 countries. the new store is spread across 400,000 square feet in the southern city of Hyderabad & plans to invest 105 billion rupees in India. the company is a non-profit. IKEA employs about 135,000 people. Because of tax rules for non-profits, IKEA pays about 33 times fewer taxes than their for-profit competitors. The Ikea trademark and the concept is owned by another private company named Inter Ikea Systems. It acquired TaskRabbit on Sep 28, 2017. IKEA has many mobile apps. But the most popular app is IKEA STORE. The app is having almost 9,60,333 monthly downloads. IKEA is the lead investor in 4 companies. Full Detail in Blog.

Everybody knows that Ikea offers the products at a very lower price than any retail shop.

In this blog, we’ll talk about Ikea Case Study(Business Model) as the Swedish furniture company opened its first retail store in India.

Like Walmart acquired Flipkart and entered the Indian Market. Ikea can destroy the Whole Furniture Market in India.

Ikea has invested 800 crores in India, It has more than 9500 Products and has more than 350 stores in 35 countries.

According to CNN , the new store is spread across 400,000 square feet in the southern city of Hyderabad & plans to invest 105 billion rupees in India.

But have you ever wondered? How does Ikea work?

What is the meaning of IKEA?

How IKEA works?

How IKEA business model earns ?

You must have many questions regarding IKEA, like What is the meaning of IKEA?

What is IKEA?

How IKEA earns?

This will be the most detailed case study on IKEA.

I will be answering all of your questions.

Let’s START WITH

WHAT IS IKEA?

IKEA is one of the biggest furniture companies in the world founded by a carpenter named Ingvar Kamprad who was 17-year-old, in Sweden in 1943.

IKEA is a globally renowned furniture retailer that sells ready-to-assemble furniture, kitchenware and home accessories.

 The company started with selling pens, wallets, jewellery with the concept of meeting consumers demands at the most affordable prices.

After five years into the business, IKEA brought in the furniture. Since then furniture has been the mainstream for the business.

IKEA furniture is now a well-known multinational brand.

IKEA MEANING

You must be wondering that what is the story behind the unique name the brand has.

The name IKEA isn’t just a fun.. it stands for – Ingvar Kamprad Elmtaryd Agunnaryd.

Short-form is cooler to pronounce right? But it actually has a deeper meaning.

The first two letters of IKEA i.e. I and K are the initials of the name of the founder Ingvar Kamprad.

While ‘E’ comes from the name of the farm he grew up on – Elmtaryd.

And the last letter ‘A’ comes from the Swedish village, Agunnaryd,

where the farm was located.

HOW IKEA EARNS? – IKEA BUSINESS MODEL

They follow Price-leadership model. Low prices are the main concern stone of the IKEA vision, business idea and concept.

In the world of IKEA furnishings, the products are named after Swedish towns like Aneboda, Akurum and Anordna.

But the costumers worry less about the names and care more about how much they cost.

Ikea furniture is a beacon for bargain hunters. Its whole business model evolves around selling their product at the lowest price possible.

IKEA business model revolves around their vision which is – offering a very wide range of well-designed, functional home furnishing products at so low prices that as many people as possible will be able to afford them.

Anybody can make a high-quality product for a high price, or a poor-quality product for a low price.

IKEA follows a different approach, they have developed methods that are both cost-efficient and innovative. Before designing the product… they decide the price tag.

Their designers begin with designing of the product after keeping the price in mind. The IKEA Group has 31 distribution centres in 16 different countries, supplying goods to IKEA stores. It has about 45 trading service offices in 31 countries.

They have very close relationships with their 1,350 suppliers in 50 countries.

IKEA’S SMART SECRET

Is IKEA – a Non- profit organization. ?

You must be having a lot of questions by now, like if IKEA is a non

profit organization then –

How do they manage their running cost?

Where all the money goes away?

Where does all this money earned is utilised?

You will get all your answer right away as you continue reading.

I would say a big YES,

IKEA has a little known secret: the company is a non-profit

They grew with a vision that states ‘to create a better everyday life for as many people as possible. And on a mission to offer a wide range of home furnishing products at a price so low that as many people will be able to afford them.’

Besides the vision and mission, the main motive of showing itself a non profit organization could seem as business-driven.

IKEA employs about 135,000 people. Because of tax rules for non- profits, IKEA pays about 33 times fewer taxes than their for-profit competitors.

There is one more big hole in this whole IKEA non-profit organization.

Money is not trapped inside Ikea’s foundation.

The Ikea trademark and the concept is owned by another private a company named Inter Ikea Systems.

So, to operate Ikea stores and use the brand name, the non-profit Ikea have to make payments each year to the private company – Inter Ikea Systems.

This clearly means money is paid directly from IKEA profits to the owners of this private company to license the trademark.

The beneficiaries or we can say owners of this private company are not publicly recorded, but it’s not hard to speculate that the Kamprad family is on the receiving end of this loophole.

HISTORY – STARTING AND GROWTH OF IKEA

Let’s talk about the exciting history timeline of IKEA.

From the of how it is started to the story of how it evolved exponentially.

It all started in 1926 when founder Ingvar Kamprad is born in Småland

in southern Sweden.

The 1940s-1950s

In the year 1948 – Furniture was introduced into the IKEA range.

Local manufacturers produced the furniture for IKEA in the forests close

to Ingvar Kamprad's home.

In the year 1956 – IKEA came up with the idea of designing furniture for

flat packs. It started focusing on self-assembling furniture models.

In the year 1980s – IKEA expands dramatically into new markets such

as the USA, Italy, France and the UK.

In the year 1984,

Ikea family was introduced a new club for the customers was launched.

Today, Ikea family is in 16 countries (over 167 stores) and has about 15

million members.

FINANCIAL FACTS AND FIGURES

Categories – Consumer Electronics, Furniture, Retail, Shopping, Smart Home.

Headquarters –   European Union (EU)

Founded Date –   1943

Founders – Ingvar Kamprad

No. of Employees – 10001 +

Legal Name –  IKEA BV

Digital links

Website –  www.ikea.com/

Facebook- www.facebook.com/IKEAIndia

LinkedIn – www.linkedin.com/company/ikea-group/

Twitter – https://twitter.com/IKEAUSA

Till now IKEA has only 1 acquisition.

It acquired  TaskRabbit  on Sep 28, 2017

Mobile app and its downloads

IKEA has many mobile apps. But the most popular app is IKEA STORE.

The app is having almost 9,60,333 monthly downloads.

Website and its monthly traffic IKEA is ranked 166 among websites globally.

And having almost 146,040,680 monthly visitors.

Investments

IKEA is the lead investor in 4 companies. Those are –

XL HYBRIDS – IKEA announced its investment in this company on

October 12, 2017

MAT SMART – IKEA announced its investment in Massmart on Jan

TRAEMAND – IKEA announced its investment in Traemand on Dec

LIVSPACE – IKEA announced its investment in Livspace on Dec 19,

MANAGEMENT AND THE CORE TEAM

CEO – Jesper Brodin

CFO – Alistair Davidson

FOUNDER – Ingvar Kamprad

HEAD OF CORPORATE FINANCE & TAX – Krister Mattsson

HEAD OF DIGITAL – Christian Moehring

HEAD OF E-COMMERCE, SOUTHEAST ASIA – Koen Besteman

HEAD OF UK MARKETING PROCUREMENT – Maria Malpartida

HEAD OF INNOVATION – Jens Heitland

8 IKEA Marketing Strategy

Many people confuse marketing with promotion. People believe that marketing is something you do to sell your product. But, this is not completely true. Marketing begins even before the production stage, as designing a product based on the demand and needs of the customers is also a part of marketing. This is what IKEA Believes in. Everything in IKEA is from a customer’s point of view. Let’s dive deep into learning different strategies of IKEA.

1. Amazing Customer Experience

Have you tried shopping from IKEA? If not, then I would strongly recommend you to try IKEA next time you need a piece of furniture.SHopping at an IKEA store is a different experience than shopping from any other furniture store. Whenever adults go out shopping with their kids, both the kids and parents face issues.

IKEA has got an amazing solution for this where none of them would feel any type of burden and in fact, both of them would like to spend more time at the IKEA store. Yes, I am talking about the free childcare facility provided by the IKEA stores. You can just leave your child safely with them and enjoy hustle free shopping and the child will also spend some quality time playing and making new friends.

Another amazing thing is that instead of standing and having a long discussion about which product to buy and calculating your cost, you can have a seat ad enjoy your paneer butter masala meal while discussing the furniture.

These little things not only add a value to the customers shopping experience but also give them a reason to visit again and even suggest others to visit the store.

2. Brand Identity

In such a competitive environment, is it very important to stand out or be unique and creative to survive? You have to build your brand in such a way that customers prefer you over other companies.IKEA is very strongly working with this. Its goal is to become the leader of every home.

IKEA focuses more on the product and the customers which a lot of companies fail to do. If you create what your customers want then you can build a good brand identity. Your every action should be a signal of your brand.IKEA uses this technique in its advertising. If you have been following IKEA for a while then you will not have to think a lot you can recognise directly that this is an IKEA ad.

3. Content Marketing

With the growing digital environment, the content has become an important element of the digital industry. Content is used by most of the companies to promote their product digitally. From a picture art to a long written blog anything can be used as content in digital marketing.

One of the best strategies you can use in this digital era is to interact with your customers directly.IKEA uses all types of contents to reach out to their customers. From images, videos to textual content IKEA has it all. To reach your customers digitally, it is very important to identify your potential audience, basically defining who your customers are. Then the most important step is defining how your potential customers can find you?IS is through your social media handles or is it through your website or a combination of all these. And then you need to target them both organically and by paid promotion techniques.

4. Social Media

Social media is something which cannot be avoided. Everyone nowadays uses social media, thanks to the internet revolution and jio revolution in India. Your presence on every social media platform is must, it doesn’t matter if you are an old company or a new one. Social media allows you to be in constant touch with your customers. You can use various strategies across your social media platforms that can help you create trust and a good brand image in front of your customers and also develop new customers.

There are a few strategies which you can follow.

  • If you follow a consistent posting schedule, then you can have a good content interaction as regular posts can make your customers think about you.
  • You can also use promotional strategies provided by social media companies to reach a new audience and attract them by telling them about your new products and offers.
  • Another important feature of social media that you can use is to understand your audience. Understanding your audience is important because they are the ultimate consumers and having clarity about the consumers makes it possible for a brand to plan its products and marketing accordingly.

5. Innovation

IKEA is very famous for new designs and products. It keeps on constantly adding a new design or a new to product to its collection. This allows customers to visit the store even if they do not want to buy anything so that they can check the latest trends and products. If you check their social media handles, you will find a lot of different types of content that displays new and innovative products. This is a very good strategy as your customers stay updated with your products. Even if they do not add the products to their cark at the moment, they still add it to their wishlist. Which indirectly gets converted into sales. Thus, innovation in products and making innovation reach your customers is very important.

6. Creative Marketing Campaigns

IKEA is very creative when it comes to marketing. Their posts are so engaging that you want to click on it and see them that what is there. The example given below demonstrates how one will swipe right to see what they have for you. Isn’t it creative? If you observe, they have made good use of the present condition in a creative way. Similarly, a humorous and creative content strategy can help you get more engagements.

7. Amazing Use of Technology

Living in the 21st century, you can make amazing use of technology to provide a great experience to your customers. Augmented reality and virtual reality are some great examples of technology can you can use especially in such industries.IKEA makes use of both these augmented realities and the virtual reality

What is Augmented Reality?

This is the most amazing use of technology that IKEA could have done. With this, you can use your mobile phone to see how a piece of particular furniture would look at your home. You can also use this to decide at which corner of the house that particular furniture would look good. This is like a trial technology where you can try the products virtually at the comfort of your home without actually buying it. It is similar to something used by Lenskart.

What is Virtual Reality?

Yet another amazing use of technology. Where most of the people are busy using virtual reality for gaming purposes, IKEA has its smart use. Through virtual reality technology, IKEA allows its customers to feel the look of the furniture. For example, say you want to buy a modular kitchen, you can try the kitchen before actually buying it in a virtual reality headset. The most amazing part is that you can try cooking and get real experience.

8. Payments Methods

Consumers have become a lot more advanced than before. Customers need comfort. Since the evolution of the digital era, there are a lot of different methods of payment. Every consumer has different payment options. It becomes important to have all the options available so that the customers get a hustle free shopping experience. As already, IKEA is a price dominant company, best price with all modes of payments is like a cherry on the cake.

Unknown Facts About IKEA

  • Ikea is the third-largest wood consumer on the planet. Being the leading furniture company it should not be shocking.
  • IKEA is claimed to print more copies of its annual catalogue each year than the bible.
  • IKEA has very good food sales. Being known for its furniture has a very good taste when it comes to their restaurant. This can be a great contribution to their revenue as they have an approximate sale of 2 billion annually.
  • As in 2014, they have 716 million visitors to their store. This is a very huge number.
  •  The first IKEA restaurant was launched in 1956 to feed its customers that would feel hungry after spending the whole day shopping.

SWOT Analysis of IKEA

* Its vision – ‘to create a better everyday life for many people’

* Economies of scale

* Lowest Price

* Countless designs

* Bad press

* Low quality

* Difficulty to control standards across locations.

OPPORTUNITY

* Solutions for a sustainable life at home

* Developing social responsibility

* The recession slows down consumer spending

* More competitors entering the low price household and furnishings

IKEA is one of the biggest furniture companies in the world founded by a carpenter named Ingvar Kamprad who was 17-year-old, in Sweden in 1943.

The company started with selling pens, wallets, jewellery with the concept of meeting consumers demands at the most affordable prices.

IKEA KEY VALUES

They are very strict about their values.

They firmly believe that every individual has something valuable to

Let’s look at some of there core values –

1. Cost – Consciousness

Their first priority is to make their product affordable to as many

people as possible. They challenge themselves constantly to make

the product more affordable without compromising on quality.

2. Renew and Improve

They always challenge themselves to try something new and to find a

a better way out.

3. Caring for People and Planet

They believe in caring for people as well as for the environment.

They act as a force for a positive change.

IKEA IN INDIA

In 2006, Ikea first displayed an interest in the Indian market but back then

the Indian laws allowed only 51 per cent foreign ownership.

With the government of India relaxing the norms for foreign direct

investment (FDI) in single-brand retail, IKEA announced in October

their intention to open stores in India.

IKEA opened its first store in India on Aug 9, 2018.

It took IKEA 12 long years to enter the Indian market.

The first store in India was opened in Hyderabad.

Hyderabad, the southern Indian city gave it a roaring welcome.

So far, more than 3 million customers have visited IKEA Hyderabad

store and about 8 million have visited IKEA’s India website

In the year 2016, Ikea purchased land in Mumbai and said that it planned

to open stores in Bengaluru and Delhi too.

After Hyderabad, in 2019 IKEA has launched its first online store in

Mumbai is offering more than 7,500 products.

It will provide delivery to most of the locations in Mumbai and will have

a delivery time of four to seven days, subject to availability and distance.

In India, IKEA currently has more than 55+ suppliers.

Also, have more than 45,000 direct employees and 400,000 people in the

extended supply chain.

Now, the company plans to have more than 25 stores in India by 2025.

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Select Clients

Defining and executing the vision for the next-generation customer experience

A busy IKEA living room setting with a grey 3 seater sofa with cushions and two plywood coffee tables

What we did

  • Vision for transformation
  • First e-commerce app
  • Global site redesign
  • Redefined in-store digital
  • Built a design system

Growth in e-commerce in 3 years

Increase in online sales in 2020

Star rating, up from 2.5

IKEA’s footprint is vast—over two billion people shop a range of 12,000 products in 500+ sales locations in 59 countries and online. But as digital becomes increasingly important—especially in the age of Covid—the retail behemoth needed to modernize and transform their business.

As their digital agency of record, Work & Co defined the vision of a future where technology holistically enhances the customer experience at every interaction. Of course, we didn’t stop there. We also helped bring it to life.

Our first challenge—creating IKEA’s first e-commerce-enabled mobile app—took just 6 months from concept to MVP. From there, we took on the entire multi-channel ecosystem of digital touchpoints, including the website, internal tools, and the stores.

The new experience led to greater efficiency, richer engagements, and incremental revenue.

Recognition & Awards

“It is a completely new experience. The app is combined with the store." Read more

"A bona-fide, full-featured shopping app." Read more

"The approach is sound and offers much to learn from." Read more

Shortlist, Design Week Awards, Best App Design. Read more

Winner, 6X Lovie Awards. Read more

Winner, 3X Platinum Awards. Read more

Finalist, FastCo Innovation by Design Awards, Data Design. Read more

4 Big Takeaways

Defining a vision for product and partnership.

Overhauling web & mobile commerce

A unifying design system

Redefining in-store touch points, bringing ikea into the “now”.

Already a worldwide leader in brick-and-mortar retail, IKEA’s leadership partnered with Work & Co to accelerate their digital transformation. Our team’s first task was to develop a cohesive and tech-savvy vision and strategy around which the global organization could align. We began a months-long process of research and brainstorming and problem solving.

From idea to execution

Once we’d identified effective solutions to the challenges, we drafted a new vision for the customer journey intricately detailed in animations and prototypes, which helped ensure all parties were aligned on the plan: aspirational and sophisticated, but also attainable. Together with IKEA, we established a strategy to work as partners with internal teams, sharing design and development labor, openly exchanging ideas and feedback, and even providing guidance on IKEA’s hiring strategies.

Overhauling web & mobile commerce

Personalized inspiration.

To bring IKEA’s famed catalog to life for the digitally native, the app leads with inspiration. Customers browse the app the same way they would IKEA’s showroom—imagining how products complement their home or aesthetic—but with technology enhancing the journey.

A new AI-powered API suggests images based on a customer’s interests and evolving taste. Our cross-platform CMS allows editors to create content once, then deploy them across both the app and IKEA.com. And to bring over 760 collections to life, our team of writers built new engaging copy that scales no matter the country.

Category-specific experiences

From mattresses to lightbulbs to kitchens and beyond, the variety of products IKEA offers are presented and sold in a myriad of ways. The flexible digital designs enable a shopping experience optimized by category and use. Inspiration galleries, planners, guides, and other content can easily be added to help shoppers find their perfect option, plus accessories and add-ons to complete the look. With around 250,000 SKUs per market, this aspect of our work was essential.

Ethical data usage

Industry-leading contextual digital tools raise the bar on data transparency and give customers control over how data is collected, stored, and used. Customers can choose if and how the company uses information—such as their IKEA browsing history, previous purchases, and product preferences—to inform product recommendations in its app, and eventually on its website. To aid explanation of these abstract concepts to users, we explored evolving the iconic IKEA assembly character as an approachable guide.

Consistency at scale

To address the challenge of keeping consistent design across all of the different touchpoints, we worked with IKEA to build a new design system. Skapa is a single source of truth for global button styles, iconography, interaction patterns, and motion libraries brought to life in one React Storybook component library. Components are strategically added and removed over time, meaning the design system is treated as a product that will never stop evolving, while simultaneously keeping the brand universally aligned.

Branding and tone of voice

From a custom icon set to branded price presentation and rigorous color guidelines, each component infuses the IKEA branding into our digital platforms. To complete our design system, we also established a new, digital-first tone of voice with dynamic writing guidelines. Now, writers, designers, motion designers, and developers have everything they need to produce new work across the digital ecosystem.

Integrated accessibility

By including best practices for accessibility into design components, we ensure our digital products are natively inclusive. Solutions are defined once, and repeated throughout development.

Global adoption

A design system is only successful if it’s used globally by an organization. That’s why we helped IKEA establish strategies for training tailored to user types and knowledge levels, advocating for adoption, maintenance and upkeep of components and documentation, and hiring a team dedicated to its management. These critical pieces helped to ensure long term success.

New ways to shop

Part of IKEA’s transformation includes the introduction of new store formats—spaces dedicated to browsing, planning, and ordering—in addition to the traditional locations. The new ecosystem Work & Co delivered integrates digital and physical across all stores in new ways, enhancing the experience for both shoppers and co-workers. New digital tools and features provide more relevant product browsing and interactions, personalized recommendations and shopping lists, and seamless checkout processes—all tailored to the shoppers’ preferences and needs.

Digital touchpoints are integrated to bridge the omni-channel experience. In-store features give users the ability to scan products, explore options and accessories, then skip the checkout line while in the physical store, reducing customer stress and simplifying the path to purchase.

We helped create Upptäcka, a replacement for the aging digital in-store installations. These new kiosks integrate with each other and the overall IKEA digital ecosystem, reducing one-off solutions. Upptäcka adapts to each store and location, making it the most contextually relevant digital touchpoint at IKEA.

Employee tools

Fixa is a task management app designed to digitize time-consuming paper-based processes, making co-workers more efficient and effective, freeing up time to focus on customers. Co-workers have called it “the best product IKEA has ever given them.”

Partner with us

Work & Co, part of Accenture Song, is trusted by the world’s leading companies to drive growth and bring innovative solutions to market. Together we can build and scale your core digital products.

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    The following is an analysis of the IKEA case study found in the Strategic Management Text book. This analyses the strategies used by IKEA to gain competitive advantage in markets outside its original area. The report begins by providing a background into IKEA.