Marketing and Operations Management at IKEA

This article discusses the competitive, marketing, and operational strategies of IKEA, focusing on its unique approach to store layout and product display. It explores how IKEA offers low prices by combining economies of scale and technological integration. The marketing strategies of IKEA target a wide range of households, while its operational strategies emphasize design, product delivery, and supply chain management. The article also highlights the relationship between these strategies and how they contribute to IKEA's success.

Running Head: MARKETING AND OPERATIONS MANAGEMENT
Topic- Marketing and operations management at IKEA
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Introduction
IKEA the Swedish Furniture giant is one of the examples of a successful retail business
enterprise. It has unique ‘IKEA Concept’ strategy support both in its marketing and operational
contexts. Its global presence has added to its competitive advantage over its equivalent market
competitors like Walmart, Amazon and Tesco Jonsson, Rudberg and Holmberg (2013, pp.337-
350). Here the main competitive strategies of IKEA are discussed first followed by marketing
and operational strategies. And lastly, the relationship between the three is defined.
Competitive strategies
The competitive strategies of IKEA focus basically on store layout and product display.
The unique approach of self-service and extensive furniture display makes it unique among its
competitors Jonsson, Rudberg and Holmberg (2013, pp.337-350). Also, its uniquely designed
warehouse next to the tills provide the customers the opportunity to take the unassembled packed
products home where they can assemble them on their own. Products are designed based on
consumer demand and ongoing market trends. IKEA is able to offer low prices to its’ customers
because of the right combination of economies of scale and technological integration in core
business processes Venter, Wright and Dibb (2015, pp.62-83). Daily needs of consumers are
emphasized and attractive, functional, affordable and reliable furnishing solutions are provided
to them. Long term sustainability is the main aim of IKEA and its business objectives are defined
in line with the main aim.
Marketing strategies
Focusing on the marketing strategies it is quite evident that in IKEA the best furnishing
solutions are provided at the lowest cost. Low prices of products are the key to IKEA’s global

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success. In addition to this the company continuously updates and improvises its products to
match the current customers’ expectations, preferences and lifestyles Jonsson, Rudberg and
Holmberg (2013, pp.337-350). The target market is quite large and it includes every household
ranging from middle-income groups to high-income groups. The marketing mix of product,
price, place and promotion are integrally designed so that the target market can be reached out
effectively Dibb and Simkin (2016, pp.251-279). The products are households’ daily essentials
ranging from furniture, bedroom accessories, kitchen appliances, bathroom accessories, children
need and many such items. Unassembled flat-packed products are provided to customers and
they can either assemble on their own or can take the help of IKEA technicians. The cost
effectiveness is one of its core success strategies, the prices of items are kept low so that larger
part of the community can afford them Gummesson, Kuusela and Närvänen (2014, pp.228-240).
Almost every country has one IKEA store and its global reach has made its business so
sustainable. The store sites are chosen keeping catchment area maximization approach in mind
where the convenience of the shoppers is also maximized. Popular areas are chosen for store set
up in order to grab higher attention of the public. Display name is quite larger and the unique
blue-yellow color combination help it to be better recognized among many others. The
promotional philosophy is based on ‘style without expense’ and the name ‘IKEA’. Its overall
marketing strategy is forceful and well-directed by the support of well-articulated marketing mix
required for managing its vast superstore operations.
Operational strategies
The operational management strategies in IKEA are also remarkable contributors in their
success map. IKEA is efficient in managing its operational networks that emphasis on design,
products and delivery of market fit products and services De Giovanni (2013, pp. 125-148). The

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major operational activities include process designing or store layout arrangement to support
effective and smooth customer flow, product designing that emphasis on stylish and readily flat-
packed product delivery, job design support where staffs can contribute their bit in company’s
success as a part of the whole IKEA family, supply network designing where stores are located
on the most effective places, improved supply chain management supporting smooth product
delivery, capacity management that help in coping up with demand fluctuations during crisis
situations, strong inventory management that avoid product shortage during sales, failure
prevention techniques for maintaining cleanliness and safety needs, quality management that
monitors and enhances service quality to end customers and last but not the least the factor of
operations improvement that emphasis on lean management and continuous improvement
examining approach in operational practices Hitt, Xu and Carnes (2016, pp.77-94). The
democratic operational design help IEKA achieve its business standards so effectively.
Relationship between competitive, marketing and operational strategies
IKEA’S business and operating model is a combination made in heaven. The vison of
IKEA is to create a better everyday life for the people. The business idea of furniture supply is in
line with the embedded vision statement of the organization. The IKEA brand is built on the
IKEA concept. The marketing communication strategy is the result of its brand name and its
operational strategy comes directly from its mission statement which aims to offer a wide range
of products and services for everyday home furnishing Jonsson, Rudberg and Holmberg (2013,
pp.337-350). Quality and durability are considered for the products and low price increase the
affordability of the products. The innovative strategy of functional furniture design is supported
by its strong operational process model support. The IKEA concept uses combination of
function, quality, design and value to its business sustainability objective. Designing, sourcing,

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packing and distributing of products all are carried out in line with the core business model. For
internationalization and business expansion the company is very cautious in its initiatives and
consider every aspect of competitiveness, marketing and operational strategies before final
decision making.
Conclusion
Thus, to conclude, it could be said that IKEA is one of the major market rulers in
retailing across the globe and its ‘IKEA Concept’ has differentiated it from the rest of its
competitors. In spite of all these strengths there are some major flaws in IKEA’s strategic
planning that need to be mentioned to have better understanding of its strategic effectiveness and
management capability. Its product design and operational design are strongly linked to each
other. As a result, loop holes in inventory management and warehousing is causing increased
cost of storage and product wastage. Old products need to be replaced by new innovative
products. The old unwanted products are shipped to other stores that has increased demand
which is causing shipping cost to increase considerably. In this context product recycling can be
helpful where old products could be re-assembled and recycled to new ones Slack and Brandon-
Jones (2018). As a result, competitive advantage will be regained and both product and
operational designing will have long run sustainability. But overall, the success story of IKEA is
worth considering its strong marketing, operational and competitive strategies will help it gain
long run sustainability in future.

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References
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Hitt, M.A., Xu, K. and Carnes, C.M., 2016. Resource based theory in operations management
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