Analysis of IKEA's Furniture Rental Model: A Marketing Perspective

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MRKT20052: Marketing Management and Digital Communications
Term 1, 2019
Assessment 1a: Analysis of article 1
Rent a Billy: Ikea to test furniture rental in 30 countries
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In the article, the IKEA's issues were discussed relating to providing furniture on a rental basis.
According to the article, customers cannot change their furniture every time they switch their
places or homes. The CEO of the IKEA took efforts in responding to the changing business
model so as to attract more customers and provide them with furniture at affordable prices. The
issues faced by the IKEA is most of the people are taking things on rent and returning it once
they got a transfer from cars to home to music to everything (Thomasson, 2019).
The article provides a discussion on various stakeholders which will get affected by the
abovementioned issue. The customers will get affected in a positive way as the CEO of the
IKEA is planning to make strategic objectives of providing all the things to the people on rent so
that it becomes convenient on the part of the customers to use the things they like and return it
when they move to a different place. The customers are more likely to live a royal lifestyle but it
becomes difficult for them to buy everything and take it along when they move to a different
place. Taking everything such as cars, home, music, apparels, accessories, etc. on rent help them
in living leisure life according to their needs and desires. Next, the competitors will be affected
because providing things on rent is a unique and innovative idea which will attract a number of
customers especially those who moves on a regular basis from one city to another. It is
inconvenient and practically impossible on the part of the customers to take all their things like
furniture, car, etc. along with them everywhere they visit. The competitors’ business got affected
by the new idea proposed by the CEO of the IKEA. The employees of the company have to
adapt the changing objectives and strategies according to the changing business environment and
changing marketing conditions. The needs and preferences of the customers are changing and in
order to survive in the market, it is essential for the companies to adopt the changes and
influence its employees to work according to the changing objectives (ÇAMOĞLU, 2019).
The article proposed that IKEA has earned total sales in 2018 of $62 billion which is equivalent
to €39 billion. IKEA will conduct testing of leasing offers in approximately 30 markets by the
end of 2020 so as to ensure that the products can be reused before recycling.
The motive and aim of the company are to make its products from recycled and renewable
materials by the end of 2030 and it also aims to design its products so that they can be reused,
recycled and repaired. The testing of the products will help the IKEA in determining the
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product’s durability which will assist the designers in gathering feedbacks and producing of the
furniture which is easy to dismantle and take it from one place to another.IKEA in the
Netherlands is offering the students furniture such as a bed, table, chairs, and desk on a rental
basis and charging approximately €30 fee on a monthly basis.IKEA has started providing
furniture on a rental basis to attract more customers and increase its revenue, growth, and
profitability (Ciulli, et. al., 2019). It helps in gaining a competitive advantage against the
competitors of the same industry and improving the brand identity of the IKEA.
According to the article, IKEA is facing an issue of providing the furniture on rent to the
customers and various stakeholders are affected by the same, IKEA took measures to fulfill the
needs of the customers.
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References:
 ÇAMOĞLU, S.M. (2019).R&D and Technological Knowledge in SMEs: Furniture
Industry in Samsun Region.
 Ciulli, F., & Kolk, A. (2019). Incumbents and business model innovation for the sharing
economy: Implications for sustainability. Journal of Cleaner Production, 214, 995-1010.
 Thomasson, E., (2019). Rent a Billy: Ikea to test furniture rental in 30 countries. [Online].
The Sydney Morning Herald. Available at:
https://www.smh.com.au/business/companies/rent-a-billy-ikea-to-test-furniture-rental-in-
30-countries-20190404-p51amk.html. [assessed: 4th April 2019]
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Appendix
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