( Neos Chronos Business Model Canvas Word ) ( Neos Chronos Business Model Canvas Word ) ( Neos Chronos Business Model Canvas Word ) Designed for: Designed by: Date: Version: Business Model Canvas Key Partners Key Activities Value Propositions Customer Relationships Customer Segments Who are our Key Partners? Who are our key suppliers? Which Key Resources are we acquiring from partners? Which Key Activities do partners perform? MOTIVATIONS FOR PARTNERSHIPS: Optimization and economy, Reduction of risk and uncertainty, Acquisition of particular resources and activities What Key Activities do our Value Propositions require? Our Distribution Channels? Customer Relationships? Revenue streams? CATEGORIES: Production, Problem Solving, Platform/Network What value do we deliver to the customer? Which one of our customer’s problems are we helping to solve? What bundles of products and services are we offering to each Customer Segment? Which customer needs are we satisfying? CHARACTERISTICS: Newness, Performance, Customization, “Getting the Job Done”, Design, Brand/Status, Price, Cost Reduction, Risk Reduction, Accessibility, Convenience/Usability What type of relationship does each of our Customer Segments expect us to establish and maintain with them? Which ones have we established? How are they integrated with the rest of our business model? How costly are they? For whom are we creating value? Who are our most important customers? Is our customer base a Mass Market, Niche Market, Segmented, Diversified, Multi-sided Platform Key Resources Channels What Key Resources do our Value Propositions require? Our Distribution Channels? Customer Relationships Revenue Streams? TYPES OF RESOURCES: Physical, Intellectual (brand patents, copyrights, data), Human, Financial Through which Channels do our Customer Segments want to be reached? How are we reaching them now? How are our Channels integrated? Which ones work best? Which ones are most cost-efficient? How are we integrating them with customer routines? Cost Structure Revenue Streams What are the most important costs inherent in our business model? Which Key Resources are most expensive? Which Key Activities are most expensive? IS YOUR BUSINESS MORE: Cost Driven (leanest cost structure, low price value proposition, maximum automation, extensive outsourcing), Value Driven (focused on value creation, premium value proposition). SAMPLE CHARACTERISTICS: Fixed Costs (salaries, rents, utilities), Variable costs, Economies of scale, Economies of scope For what value are our customers really willing to pay? For what do they currently pay? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream ...

1. (
Neos Chronos Business Model Canvas Word
)
(
Neos Chronos Business Model Canvas Word
)
(
Neos Chronos Business Model Canvas Word
)
Designed for:
Designed by:
Date:
Version:
Business Model Canvas
Key Partners
Key Activities
Value Propositions
Customer Relationships
Customer Segments
Who are our Key Partners? Who are our key suppliers? Which

2. Key Resources are we acquiring from partners? Which Key
Activities do partners perform?
MOTIVATIONS FOR PARTNERSHIPS: Optimization and
economy, Reduction of risk and uncertainty, Acquisition of
particular resources and activities
What Key Activities do our Value Propositions require? Our
Distribution Channels? Customer Relationships? Revenue
streams?
CATEGORIES:
Production, Problem Solving, Platform/Network
What value do we deliver to the customer? Which one of our
customer’s problems are we helping to solve? What bundles of
products and services are we offering to each Customer
Segment? Which customer needs are we satisfying?
CHARACTERISTICS: Newness, Performance, Customization,
“Getting the Job Done”, Design, Brand/Status, Price, Cost
Reduction, Risk Reduction, Accessibility,
Convenience/Usability
What type of relationship does each of our Customer Segments
expect us to establish and maintain with them? Which ones have
we established? How are they integrated with the rest of our
business model? How costly are they?
For whom are we creating value? Who are our most important
customers? Is our customer base a Mass Market, Niche Market,
Segmented, Diversified, Multi-sided Platform
Key Resources

3. Channels
What Key Resources do our Value Propositions require? Our
Distribution Channels? Customer Relationships Revenue
Streams?
TYPES OF RESOURCES: Physical, Intellectual (brand patents,
copyrights, data), Human, Financial
Through which Channels do our Customer Segments want to be
reached? How are we reaching them now? How are our
Channels integrated? Which ones work best? Which ones are
most cost-efficient? How are we integrating them with customer
routines?
Cost Structure
Revenue Streams
What are the most important costs inherent in our business
model? Which Key Resources are most expensive? Which Key
Activities are most expensive?
IS YOUR BUSINESS MORE: Cost Driven (leanest cost
structure, low price value proposition, maximum automation,
extensive outsourcing), Value Driven (focused on value
creation, premium value proposition).
SAMPLE CHARACTERISTICS: Fixed Costs (salaries, rents,
utilities), Variable costs, Economies of scale, Economies of
scope
For what value are our customers really willing to pay? For
what do they currently pay? How are they currently paying?
How would they prefer to pay? How much does each Revenue
Stream contribute to overall revenues?

4. TYPES: Asset sale, Usage fee, Subscription Fees,
Lending/Renting/Leasing, Licensing, Brokerage fees,
Advertising
FIXED PRICING: List Price, Product feature dependent,
Customer segment dependent, Volume dependent
DYNAMIC PRICING: Negotiation (bargaining), Yield
Management, Real-time-Market
Designed for:
Designed by:
Date:
Version:
Business Model Canvas
Key Partners
Key Activities
Value Propositions
Customer Relationships
Customer Segments

5. Key Resources
Channels
Cost Structure
Revenue Streams
Designed by: The Business Model Foundry
(www.businessmodelgeneration.com/canvas). Word
implementation by: Neos Chronos Limited
(https://neoschronos.com). License: CC BY-SA 3.0
Table of contents
Executive summary
...............................................................................................
...................................... 1
Introduction............................... .............................................

6. ....................................................................... 2
A glimpse of past and present on
IKEA......................................................................................
............ 2
IKEA’s Business Model Canvas
...............................................................................................
................... 3
What is a market need in the furniture industry? What logic
should IKEA’s R&D department
follow in order to present a futuristic market pull?
.............................................................................. 6
About IKEA’s R&D lab
...............................................................................................
................................. 6
The service innovation concept
...............................................................................................
.................. 7
Possible innovation, processes, procedures and innovation
management of IKEA Virtual
Designer
...............................................................................................
........................................................ 7
Selecting a suitable innovation model
...............................................................................................
..... 7
Typology
...............................................................................................
....................................................... 8

7. Key Partners
...............................................................................................
.............................................. 13
Key activities
...............................................................................................
............................................. 14
Key resources
...............................................................................................
............................................ 16
Value proposition
...............................................................................................
..................................... 16
Customer relationship management
...............................................................................................
...... 18
Channels
...............................................................................................
..................................................... 19
Customer segments
...............................................................................................
................................... 20
Cost structure
...............................................................................................
............................................. 21
Revenue streams
...............................................................................................
....................................... 22

8. Conclusion
...............................................................................................
................................................... 23
REFERENCES
...............................................................................................
............................................... 26
Executive summary
This report aims to discuss and analyse different elements of
IKEA’s business model canvas.
IKEA is a furniture selling giant founded in 1943 in Sweden, by
Ingvar Kamprad. It is currently
2
Dutch-headquartered and manufactured its’ products in various
law-wage countries such as
western Europe and far east regions.
IKEA is known for its brilliantly practical and space-saving
design and its interior design work
is often eco-friendly and simple.
The study of the business model canvas will provide a bird’s

9. eye view on how IKEA managed
to become the seventh most valuable retailer in the world,
valued at almost 59 billion U.S.
dollars. However, and just like any other fortune 500 company,
IKEA’s management is anxious
about the future and focuses a high degree of attention to its
R&D operations. In fact, it has
subsidized the innovation activity to an entity known today as
SPACE10.
Therefore, this report will introduce one of many ideas that may
be considered by IKEA’s
innovation team, in order to cope with digital transformation
and rapidly changing world that
we currently live in. Which is a virtual web-based interior
design platform that will allow users
to consider various package IKEA product proposals to furnish
their new or renovated space.
That is, IKEA Virtual Designer
IKEA Virtual Designer proposed log
Introduction
A glimpse of past and present on IKEA

10. IKEA is a home furnishings company founded in Sweden, in
1943. IKEA has grown
exponentially since then due to its’ brilliant value proposition
which allows the target market to
be covering a vast majority of the people in most regions.
IKEA was initially founded in Sweden in 1943, by a man called
Ingvar Kamprad as a mail-
order sale then shifted their core business to furniture sales five
years later.
3
IKEA is now a Dutch-headquartered multinational company and
has been the world’s largest
furniture retailer since 2008.
As of 2019, IKEA was the seventh most valuable retailer in the
world, making it the most
valuable furniture retail brand, valued at almost 59 billion U.S.
dollars.
IKEA believes that home is the most important place in the

11. world and children its most important
people.
But the interesting questions about IKEA maybe be comprised
as: How does IKEA run this
massive operation? And What makes IKEA successfully manage
all activities of the firm’s value
chain? And lastly, how does it cope with the digital
transformation and innovations affecting all
industries in an extremely rapid fashion? What innovative, and
possibly disruptive innovative
service could it possibly adapt in order to maintain its’ position
as a market leader?
IKEA’s Business Model Canvas
In order to answer the first two questions, and to easily
understand from a bird’s eye view the
collective efforts and elements put in place to deliver IKEA’s
brand value proposition. The
below business model canvas has been created.
A business model canvas is an informative display of a firm’s

12. overall business model. It
describes the firm’s value proposition, key partners, activities
and resources, as well as
customer relationship management, sales channels and cost and
revenue streams.
Furthermore, the presented canvas will feature a proposed
service innovation idea, which we
believe may form a radical change for IKEA and later in the
furniture sales industry. That is,
IKEA’s Virtual Designer
4

13. 5
**IMPORTANT NOTE: This canvas does not reflect the items
related to the introduced service innovation. This will be added
later in the conclusion
6
What is a market need in the furniture industry? What logic
should
IKEA’s R&D department follow in order to present a futuristic
market
pull?
In order for a big company like IKEA to innovate and adapt to
the rapid changes and the
digital transformation happening in today’s word, it will need to
budget for and extensively
invest in the research and development activities.
About IKEA’s R&D lab
IKEA performs most of its’ research and design activities
through a subsidiary known as
SPACE10.

14. SPACE10 defines itself as a lab that’s supported by and
dedicated to IKEA that’s on a mission
to create a better everyday life for people and planet.
SPACE10 headquarters in Copenhagen, Denmark
SPACE10 prioritises the collaborative approach, brainstorming
then seeks and engages with
forward-thinking specialists to deliver radical innovations to be
exploited by IKEA.
7
Having said that, it is safe to say now that IKEA’s attention to
the importance of innovation
management to the extent that it performs the R&D lab
activities through a separate
dedicated and specialized creative entity, forms a solid
innovation infrastructure that
welcomes great ideas and is capable of investing in them.
The service innovation concept

15. The proposed service innovation concept that will be introduced
for future consideration by
IKEA is an online interior design platform which allows
customers to design their own space
from scratch using IKEA’s webpage or mobile app.
The customer will go through a pre-set online process and the
end result will be various interior
design and furnishing proposals to the customer’s required
space, using a compilation of IKEA’s
physical products sold as a package within the customer’s
chosen budget. The name chosen for
this service would be “IKEA Virtual Designer”
IKEA Virtual Designer proposed logo
Possible innovation, processes, procedures and innovation
management of IKEA Virtual Designer
In order for the R&D team to actuate this idea, they need to first
decide on which innovation
model should be followed; whether in this case to propose
through a technology pull or a
market push, and other aspects to be taken into consideration.

16. Selecting a suitable innovation model
Since IKEA Virtual Designer is a brand new idea and a first
time offering by furniture
retailers, it may be best to consider progressing through the
design of the service while
conducting market research and surveys to obtain useful
feedback iteratively, and eventually
8
launch a product that is user friendly and satisfies a market
need. Thus, a coupling and
interactive model would be the best choice.
Typology
IKEA Virtual Designer combines various cutting-edge
technologies to create a new method of
virtually designing and furnishing a certain space. It also serves
a market need that has never
been fulfilled before. That is “design and furnish your home,
from home”
Furthermore, the cultural changes and the consumer behaviour
have radically changed after
the recent events caused by the COVID-19 pandemic.

17. Companies and people now understand
the capabilities of working, studying and running errands from
home using their personal
computers or smart phones.
9
5G outstanding
internet
capabilities
COVID-19 new
shopping
culture
AI, AR and data
management
capabilities
CAD and 3D
modelling design
capabilities

18. 10
This approach leaves us with the fact that IKEA Virtual
Designer is utilizing new methods to
satisfy a new market need, which could possibly become a
fundamental to the furniture
shopping industry in the future.
Hence, it is believed that IKEA Virtual Designer should
eventually present a radical-to-
disruptive innovation for IKEA, if the perfect set of innovation
processes and procedures are
followed and implemented for the entire lifecycle.
As SPACE10 wrote in its mission statement, forward-thinking
specialists whether company
employees or not, are a key asset in the innovatio n process.
Hence, the Diffusion of Innovation
(DOI) Theory, developed by E.M. Rogers in 1962 should be
considered.
By using the coupled model and adopting the diffusion theory,
the role of the early market

19. leaders, early adaptors or technology enthusiasts in providing
continuous feedback as the
product is being developed and tested, is of great significance in
creating a radical service.
11
Having said that, it is of no doubt now that the process of
transforming the service innovation
“IKEA Virtual Designer” from an idea to a service happily used
by thousands of people will
require extensive planning and months of research and
development then implementation and
actuation. However, one of many possible methods to provide
this service has been developed
and proposed as follows:
This virtual designer will take the customer through a
questionnaire that aims to gather
personal details about the user, such as lifestyle, status, budget,
taste and other, then requests

20. the customer to provide dimensional details, possibly using
Augmented Reality (AR), of his/her
space in order to create a 3D model of the customer’s space
using an embedded 3D
modelling software.
Eventually, IKEA Virtual Designer will share different interior
design proposals for the user
displayed in a 3D model identical to the customer’s home or
office, using IKEA’s products and
within the customer’s pre-set budget.
12
13
Now that we have introduced the proposed service innovation
that would be considered by
IKEA, let us revisit the business model canvas by looking at
each of its’ elements and studying

21. the impact and transformation that would occur should IKEA
design to go through with creating
and launching IKEA Virtual Designer
Key Partners
IKEA is a massive retailer that deals with tens of partners
around the world, from wood and
cotton suppliers such as WWF, to product design collaborations
with the likes of Lego and
Sonos.
Moreover, IKEA does not own its truck fleet, but instead it
partners up with delivery and
logistics companies like DHL and UPS. Other interesting
partnerships include ones with Paypal
and smart banks around the world that offer financial facilities
and instalment plans to IKEA’s
customers.
Lastly, potential collaborations with AI (Artificial Intelligence)
and AR (Augmented Reality)
specialists like Apple and NVIDIA then 3D modelling and CAD
(Computer-Aided Design) firms

22. will be needed to develop the new service “IKEA Virtual
Designer”
14
Key activities
IKEA’s makes money through selling modular furniture. Their
involvement starts from designing
thousands of furniture assemblies with different models, to
manufacturing the parts through its
subsidiary factories
15
IKEA is also involved in the entire supply chain and logistics
management, including distribution
to superstores around the world, quality control, franchise
management, and contracting
captive services like interior design consulting, delivery and
assembly.
Furthermore, IKEA, as most of the multinational retailers

23. around the world, highly and
increasingly relies on its E-commerce sales channel
Also, IKEA Virtual Designer, which would act as a interior
design consultant that offers various
furnishing options to customers using IKEA’s products.
16
Key resources
IKEA is worldwide spread, offering its products through more
than 420 showrooms and
superstores. This massive operation is driven by more than
200,000 employees between
directly hired and contracted through factory subsidiaries.
These factories and superstores
are also equipped with high-tech heavy machinery and
equipment.
IKEA’s website has also been a key resource mainly utilized for
marketing and sales of

24. products and services.
The provision of IKEA Virtual Designer would also require a
great deal of soft and intangible
resources such as CAD embedded websites and mobile apps.
Value proposition
17
As mentioned before, IKEA's mission is to provide a better
everyday life for people and
keeping the mission alive are their everyday employees.
IKEA’s value proposition seems to be the secret recipe behind
their success.
IKEA offers thousands of affordable furniture products, that ar e
well-designed, made of good
quality, durable raw materials that are wholesale purchased to
reduce product costs,
efficiently packed to save space and reduce logistical costs

25. therefore allow for these products
to be offered on attractive rates.
Moreover, IKEA’s standard showroom is designed to offer a
brilliant experience for all
generations and different parts of the society. For example,
IKEA’s restaurant and café offer
great food and beverages at affordable prices. Also, IKEA’s
kids play area is safe and well
designed to suit different ages and keep the kids distracted
while the parents enjoy their
shopping.
IKEA Virtual Designer will offer a one-stop shop solution and
inspiration for renovating
customers and proposes package furnishing within their pre-set
budgets. This solution will also
provide adaptation to the new shopping culture and consumer
behaviour caused by the recent
COVID-19 pandemic.
Also, the following mission statement may be added to cover
the purpose of this new feature i.e.
“design and furnish your home, from home”

26. 18
Customer relationship management
IKEA’s management work hard to provide extraordinary
customer experience while shopping
at their showrooms or even website.
IKEA FAMILY is a customers’ engagement and loyalty
membership tool that offers many
benefits to members, such as special discounts, reduced delivery
and assembly rates and in-
store free access to coffee and tea machines.
Studies have shown that IKEA FAMILY members spend 30%
more than non-members while
shopping.
Including a kids’ play area and a dining facility in every
showroom around the world

27. completes the management’s goal in providing ultimate comfort
and entertaining shopping
experience to their visitors.
IKEA Virtual Designer would also offer a great deal of options
to customers and increase
engagement and returning visitors to its’ E-stores.
19
Channels
IKEA sells its’ products through various channels, such as:
• Stores and showrooms where most of the sales take place
• IKEA’s official website which is an increasingly reliable sales
tool
• E-commerce through intermediaries (Amazon, Alibaba, etc.)
• Mobile application
• Catalogues

28. • Email subscriptions and
• IKEA Virtual Designer, which would be a great means of
facilitating package/bundle
sales and offering a one-stop shop solution to customers
20
Customer segments
IKEA’s mission implies that the company aims to increasingly
cover more levels of society,
whether businesses furnishing their offices or customers
furnishing their homes. However, IKEA
primarily focuses on selling to:
• Families, especially ones with kids or newlywed couples
• Students and furnishing student dorms for efficient space
utilization
• IKEA employees
• Small-to-medium businesses and office furniture

29. • Smart home and technology enthusiasts
• Cost conscious individuals
• And with the launching of IKEA Virtual Designer one-stop
shop seekers looking for
timely efficient solutions would definitely be attracted
21
Cost structure
IKEA’s product costing may be broken down into the following
categories:
• Raw Materials of which the modular product is made of;
IKEA’s strategy is to purchase
raw material such as wood and cotton through wholesale market
or via subsidiary companies
like WWF; in order to reduce material cost
• Manufacturing processes that resulted in bringing this raw
material to its present form;
these parts are also massively manufactured and produced for
the same purpose

30. • Logistical costs incurred to avail these products at IKEA’s
stores and shelves; IKEA ships
its’ dis-assembled, efficiently packed products in bulk so as to
reduce shipping cost
• IKEA’s workforce whose collective efforts made these
products at the customers
disposal
• Outsourced expenditures spent to market and advertise their
products and services
• And costs related to the in-house and subcontracted efforts
spent to continuously
develop and provide IKEA Virtual Designer to customers as a
reliable tool
22
Revenue streams
Time and time again, IKEA consistently manages to close their
fiscal year as the foremost
name within the furniture market. In fiscal year 2019, the
company generated global revenues

31. exceeding 41 billion Euros.
These revenues are generated through:
• Furniture sales
• Food sales
• In-store restaurant and cafe’ sales
• Captive services, such as consultancy, delivery and assembly
through subsidiaries and
subcontractors, removal and recycling, and newly introduced
package sales tool, IKEA Virtual
Designer
23
Conclusion
Despite the fact that IKEA is the most valuable company in the
furniture industry worldwide, it
needs to be sustainable and strategies to cope with the digital
transformation and the rapidly

32. changing human culture and market need.
One of the key strategies that IKEA focuses on to maintain
growth is continuous innovation.
IKEA has subsidized its innovation activities to a company
called SPACE10.
Having said that, a new service innovation was considered
through a coupling model and by a
suggested application of market pull through implementation of
market diffusion theories in
the report and was incorporated with IKEA’s business model
canvas elements to see its’ impact
and transformation on each of these elements.
IKEA Virtual Designer is the name given to the virtual interior
designer proposed to offer a
complete home shopping solution to the customers home or
office. The analysis proved that
IKEA Virtual designer, if ideated and marketed then launched
professionally in collaboration
with technological specialists like AUTODESK. APPLE and
others, may not only act as a radical

33. 24
innovation boosting IKEA’s sales in the near future, but also
become a disruptive innovation
and end up being the main source of income for furniture selling
companies around the world.
25
IKEA’s business model canvas (IKEA Visual Designer
incorporated)
26
REFERENCES
SPACE10. 2020. About | SPACE10. [online] Available at:
<https://space10.com/about/>

34. [Accessed 20 July 2020].
Community.cengage.com. 2020. Cengage Resource Center.
[online] Available at:
<https://community.cengage.com/GECResource2/info/b/marketi
ng/archive/2013/10/15/i
kea-serious-about-r-amp-d> [Accessed 22 July 2020].
Sphweb.bumc.bu.edu. 2020. Diffusion Of Innovation Theory.
[online] Available at:
<https://sphweb.bumc.bu.edu/otlt/MPH-
Modules/SB/BehavioralChangeTheories/BehavioralChangeTheo
ries4.html> [Accessed 22 July
2020].
Gaubinger, K., Rabl, M., Swan, S. and Werani, T., n.d.
Innovation And Product Management.
Trott, P., n.d. Innovation Management And New Product
Development.
Estonia, C., Sweden, B., Plan, F., Colombia, T., The
Panamazónico Social Forum in Mocoa, 1.,
Estonia, C., Sweden, B., Colombia, T., Plan, F. and The
Panamazónico Social Forum in Mocoa,
1., 2020. Start. [online] Skyddaskogen.se. Available at:
<http://skyddaskogen.se/en>
[Accessed 22 July 2020].
En.wikipedia.org. 2020. IKEA. [online] Available at:
<https://en.wikipedia.org/wiki/IKEA>
[Accessed 20 July 2020].
Världsnaturfonden WWF. 2020. WWF And IKEA - WWF
Sweden. [online] Available at:

35. <https://www.wwf.se/ikea/> [Accessed 23 July 2020].