IKEA is a Swedish furniture retailer founded in 1943. It has annual revenues of $37.6 billion from 340 stores in 28 countries. IKEA cuts costs through supply chain control, bulk purchasing, efficient design, and requiring customers to assemble products themselves. Their target market includes young professionals and families. While IKEA has adapted stores and products for different cultures, their DIY model is not as successful in Asia. Moving forward, IKEA could further expand in emerging markets like China and India.

1. IKEA : Case Study

2. Founded 1943 by
Ingvar Kamprad
in Sweden.
FY2016 total
revenues were $37.6
billion, with 783
million visits to 340
stores in 28
countries.

3. To create a
better everyday
life for the
many people.

4. • Low cost
• Innovative design
• Functional
• DIY – the IKEA
experience

5. How does IKEA do it?
Reduce costs and
deliver quality
products at the
same time?

6. IKEA has implemented several companywide
strategies to keep operational costs low.
• Control the supply chain
• Buy in bulk
• Use lighter packaging material
• Efficient design, less waste
• IKEA’s unique DIY assembly
products

7. IKEA products come as DIY( Do It Yourself)
assembly kits which need to be assembled by
customers.
Customers do all the shopping , shipping and
assembly – another major way IKEA cuts costs.

8. This unique DIY feature of IKEA products has become a
definitive feature of the brand, increasing
consumer engagement and brand equity.

9. TARGET MARKET
• College Freshmen
• Graduates right out of
college
• Families with children
• New businesses
• Price sensitive people in
age group 18-35

10. Factors affecting Consumer Behavior
In the following slides, we’ll take a look at how IKEA has
adapted itself to take advantage of cultural and
psychological factors.

11. Customizing Stores and Products to
suit cultural and regional preferences .
IKEA developed larger glasses and designed
wardrobes with deeper drawers for the US
market .

12. IKEA China stocks specific items for each Chinese New Year ,
which attract local consumers and the stocks fly off the shelves
Even the stores are designed differently, set up in small spaces
to reflect the small apartment culture in the country.

13. Stores are designed to give consumers a great shopping
experience, with inspirational room settings, restaurant,
facilities for children, etc.

14. Quirky , targeted
Advertisements

15. In-Store promotions and sales

16. What more can IKEA
do to reach
consumers in
different markets?
Expand the brand in SE
Asia, specially China
and India(major
emerging markets) .

17. IKEA’s DIY concept is NOT a hit with consumers in China
,India and other SE Asia countries. Home delivery is
another major issue.
Assemble it Yourself !

18. • Shopping experience offered at IKEA stores is
good ; so good that people don’t mind making
50-mile round trips to visit an IKEA store.
• Low prices attract a vast target market to IKEA ,
from millennials to generation X.
• Product line is constantly innovated , to offer
consumers a wide, new range of products every
time they visit.
IKEA Strategy : Pros

19. CONS
• Shopping at IKEA stores is a time-
consuming process.
• Stores are located far from cities,
which increases travel time and
reduces motivation of consumers.
• IKEA stores are designed to give
visitors a full tour of the shop – quick
in and out shopping is not possible .

20. SUMMARY
• IKEA : Intro
• Vision
• Brand Positioning
• How does IKEA cut costs?
• Target Market
• Improvements in IKEA
• Marketing Strategies
• What more can IKEA do ?
• Pros & Cons – IKEA Shopping

21. Disclaimer
Created by Abhishek Parashar
(HBTI K )
during a Marketing
Management internship under
Prof. Sameer Mathur
IIM Lucknow