Created in December 2017 for a marketing internship under the guidance of Professor Sameer Mathur

1. Marketing Strategy

2. HISTORY OF THE COMPANY
➤ Ikea is an international home product company that designs
and sells ready to assemble furniture appliances and home
accessories
➤ It was founded in 1926 in Sweden by then 17 year old Ingvar
Kamprad.
➤ The company has been the world’s largest Furniture retailer
since 2008

3. “To create a better everyday life for
people
MISSION STATEMENT OF IKEA

4. ABOUT THE FOUNDER
➤ IKEA was founded by Ingvar Kamprad in Sweden
➤ He originally sold Pens, Christmas Cards and seeds from a
shed
➤ He is included in the Forbes List of the Top 10 Richest People
in the world

5. PESTEL ANALYSIS
Political
IKEA’s political environment
is favourable. In Europe and
America, the political
systems have developed
over long time providing a
very stable environment.
IKEA does not operate in
Africa where most nations
are not politically stable.
Economic
• Enjoys economies of scale
• High barriers of entry for
competitors
due to low prices offered to
consumers
• Economic crises in Russia
has also effected Turkey’s
economy.
Social
Changing with
social trends E.g.
Many people
associate Sweden
with a fresh
healthy way of life
which is reflected
in the IKEA product
range ie the colors
and materials
Technology
• Innovative
designs
• 3D mobile
catalogs for the
customers
• Flat sized
packaging
• Lots of
assembling videos
on youtube
Environment
• Environmental Laws
• Lesser carbon
footprints
• Ecologically
sustainable
• Recyclable products
• Online tips on
reducing
environmental impact
(CSR)
Legal
• Labor laws
• Taxes and
duties

6. SWOT ANALYSIS
Strengths
Wide Range of
products and styles
Cheap and
Affordable
Functional Design
Appealing Shopping
Experience
Weaknesses
Yet to invade
Global Markets
Products not
suitable for global
expansion
Not Long Lasting
Assembly of
furniture required
Opportunities
Untapped Markets
Online Sales
Demand for
Environment
friendly products
Threats
Organised and
Unorganized
sectors in Local
Areas
Competition

7. HOW DOES IKEA CUT COSTS ?
1. Stores are located at a good distance from the city
2. One way format floor
3. Stores optimised to save energy and open for long hours
4. Restaurants and Day Cares at the stores
5. Finds the right manufacturer for the right product

11. ➤ Ikea is an international home product company that designs
and sells ready to assemble furniture appliances and home
accessories
➤ It was founded in 1926 in Sweden by then 17 year old Ingvar
Kamprad.
➤ The company has been the world’s largest Furniture retailer
since 2008

12. MARKET SEGMENTS AND TARGETS

13. POSITIONING

14. PROMOTION MIX
➤ Creative Advertisements and Viral Marketing
➤ Additional Facilities lik Child care , Restaurants , Help Desks
➤ Promise of price drop of 2-3% annually
➤ Caters to the local tastes of each country
➤ Smart Product placement in stores
➤ Incentives during store launch

15. CREATIVE ADVERTISEMENTS

16. VIRAL MARKETING-OUT OF THE BOX PROMOTIONS

17. ADDITIONAL FACILITIES
Day care

18. WHAT ARE SOME OF THE THINGS IKEA IS DOING RIGHT TO REACH
CONSUMERS IN DIFFERENT MARKETS? WHAT ELSE COULD IT BE DOING?
It has affordable prices and looks after consumer interests . Since the stores are
located outside the city, it is cheaper to transport the goods and can source the
products from multiple companies in the world
To make the strategy more effective, IKEA
could influence reference groups of target
customers and can build stores for greater
accessibility . It could develop customisation
features for customers and eco friendly
products

19. IKEA HAS ESSENTIALLY CHANGED THE WAY PEOPLE SHOP FOR
FURNITURE. DISCUSS THE PROS AND CONS OF THIS STRATEGY.
Pros
- Good Quality furniture at a low cost
- Simple model
- Uniformity all over the world
- Customer Loyalty Programmes
Cons
-No product innovation
-Competition from local retailers
which provide convenient service
- Model will not work in south asian
countries because of the different
work culture

20. IN CONCLUSION
IKEA has most definitely changed the way people
buy furniture, but it has to review its core
business strategy so that it can be implemented in
all the countries in the world.

21. DISCLAIMER
Created by SHIVANI BAGARIA (St. Xavier’s
College ,Kolkata) during an internship under
PROFESSOR SAMEER MATHUR (IIM
Lucknow)