IKEA was founded in 1943 by Ingvar Kamprad in Sweden. It emerged as a leader in the home furniture industry by offering leading-edge design and functional home furnishings at extremely low prices. IKEA cuts costs by avoiding transportation and assembly costs, locating stores far from cities, and negotiating best value prices from suppliers. It reaches consumers through social media campaigns and provides services like delivery and optional assembly (for a fee) to improve customer satisfaction. While IKEA has experienced strong growth, its growth rate has slowed in recent years as it expands into new markets. Pros of its strategy include cheap prices and easy self-assembly, while cons include the lack of free shipping and difficulty finding specific items in large stores.

1. IKEA

2. IKEA is founded by Ingvar
Kamprad in the year 1943

3. What made IKEA
emerge as leader in
Home – Furniture
Industry?

4. College students
and
Families with children

5. MOTIVATION
Leading-edge design and
functional home
furnishings at extremely
low prices

6. HOW DID IT DO?
•Cutting costs
•Measures to save
electricity
•Avoiding transportation
and assembly costs
•Located far away from
cities
•Best value price from one
of it’s 1350 suppliers

7. •Redesigning Products to cater local and
regional tastes.
•Influencing regional life – style to international
level
GEOGRAPHIC SEGMENTATION

8. Reaching Consumers
•Campaigns – Ambassador of Kul
•Social Media – Facebook Page tag
•Customer Service

9. BEFORE

10. CRAZY IDEAS

11. ASSEMBLY - Instructions

12. COST
IKEA now provides,
•Delivery Service
•Online Delivery
•Assembly Service
(additional cost)

13. CUSTOMER SATISFACTION
•1 year easy return policy
•5 – 25 years of limited
warranty
IKEA RANKED “HIGHEST IN
CUSTOMER SATISFACTION
WITH KITCHEN CABINETS” –
2014 survey

14. Products are not coded
with numbers but in fact
they are given Swedish
names. This makes
customers perplexed with
the names.
UNIQUE

15. PRO’s CON’s
• Cheap and unique way of home –
furniture.
•Give a practical over view display of
furniture so that we can set accordingly
in our houses.
•Prompt and genuine customer service.
•Furniture bought are easy to assemble
and ship .
•Far off from cities.
•Some customer groups don’t like
assembly by themselves concept.
•No free shipping policy might be burden
for people who don’t have vehicles.
•Arranging the things makes it difficult
for customers who want to buy a
particular thing.

16. FOOD & BEVERAGES
•IKEA introduced Swedish and regional
foods in the IKEA Stores
•Cheap and mouth watering food
•Makes your stay at the store more
relaxing

18. GROWTH
•IKEA growth rate has reduced
from 8.9% over past years to 7.1 %
in 2017
•With the current rate it is
impossible to reach it’s 2020 target
i.e $56 billion
•The reason for the reducing of
sales growth is that it is expanding
its markets heavily

19. Pros and Cons of IKEA Strategy
in Asia
Do it your self doesn’t work in India/ Asia. People are willing to pay extra money
for assembling. Rooms in India are relatively very small and furniture
designing needs to be adjusted. Since the population in India and China are
huge, there will be very long queues and people are more likely to be irritated
People in Asia love cost – efficient and innovative goods. They tend to
compromise on quality for less money. So IKEA can reduce the price even
more and can increase the sales in India

20. RECAP
 Target Market
 Motivation
 Geographic Segmentation
 Reaching the customers
 Unique Ideas
 Customer satisfaction
 Pros and Cons
 Food Industry
 Growth
 Pros and Cons in Asia Market

21. DISCLAIMER
Created by Bitra Jyothi Srinivas,
studying BS-MS at Indian Institute
Science Education and Research,
Mohali. During a Marketing Internship
under the guidance of Prof. Sameer
Mathur