IKEA is the largest furniture retailer in the world, founded in Sweden in 1943. It has 389 stores across 43 countries, generating €35 billion in revenues in 2016 with over 900 million store visits. IKEA analyzes consumer wants and offers great Scandinavian design products at low prices by reducing costs through bulk buying, DIY assembly, and distant store locations. While this strategy attracts price-conscious customers globally and limits the impact of local price changes, it can also be perceived as lower quality and cause inconvenience for some consumers. IKEA is looking to expand further in Asia and Africa while increasing services in urban areas and innovating in the furniture market.

1. “Home Is the most beautiful place”

2. • Founded – 1943 in Sweden
• 389 stores, 43 countries
• 35 Billion € revenues in 2016
• 915 million store visits in 2016
• Largest furniture retailer in the world

3. 2001 2010 2016
10.4 Billion €
23.5 Billion €
35 Billion €

4. BUT HOW?

5. “People have very thin
wallets.We should take
care of their interests”
- Ingvar Kamprad

6. Great Design
Low Price
IKEA’s analysis – What ConsumerWants?

7. IKEA’s Product Offering
Great Scandinavian Designs
DIY Shipping and AssemblyNew products every year
Economic Prices

8. Reducing Costs
Consumer Assembly and
Shipping
Distant Stores

9. Reducing Costs
Bulk Buying
Energy Saving

10. Social Factors
Cultural Factors Behavioural Factors
Consumer Behaviour

11. What is IKEA doing so well?
What more can it do?

12. • Engaged customers
through DIY
• Products based on local
and cultural needs
• Engaging store designs
• Promotion campaigns

13. Large King size beds in the US
Chinese style lamps
Home delivery and assembly in China

14. Inspirational room setting in store

16. Limited costs and management
of delivery network
Low price attracts consumers
Serves consumers across the
globe
Pros of IKEA’s Strategy
Limited impact of local price
surges on supply

17. Cons of IKEA’s Strategy
• Low price can be perceived as inferior quality
• Difficulty in attracting high end consumers
• Distant stores cause inconvenience
• DIY can get messy and irritating

18. What’s Next?
• Expansion in Asia and Africa
• More stores in urban centres
• Increased customer service
• Innovation in furniture market

19. • History
• Consumer Analysis
• IKEA’s Product Offering
• Reducing Costs
• What is IKEA doing so well?
• Pros and Cons
Recap

20. DISCLAIMER
• Created by Gautam Oswal, College of Engineering, Pune
,during a marketing internship by Prof. Sameer Mathur, IIM
Lucknow