Digital Media & Communications: IKEA Global Marketing Plan

This report, prepared by a Digital Media & Communications student, provides a comprehensive analysis of IKEA's global marketing plan. It begins with an executive summary and introduction, followed by an examination of the pandemic's impact on IKEA's revenue and a detailed stakeholder analysis. The report utilizes various analytical tools, including Ansoff's matrix, SWOT analysis, and PESTEL analysis, to evaluate IKEA's marketing strategies and its position in the global market. It explores IKEA's marketing mix, including the 4Ps, and examines various marketing activities such as experimental, content, and digital marketing. The report also covers segmentation, targeting, and positioning, along with ethical considerations. The conclusion compares IKEA's current practices with recommendations based on the analyses, offering insights for international market success. The report also analyzes IKEA's strategic environment in Europe, India, and China, and offers suggestions for improvement.

BUILDING A GLOBAL
MARKETING PLAN ON IKEA
GROUP OF COMPANIES
Prepared By: Sharon Ekong
Digital Media & Communications
Student ID: 1307476
MIM1

Executive Summary 2
Introduction 3
Pandemic Impact On Revenue 3-4
IKEA’S Stakeholders Analysis & Global Market 5
Ansoff’s matrix 6
SWOT Analysis 6-7
PESTEL Analysis 7-8
IKEA’S Global Market 9-10
4P’s Of IKEA’s Marketing Mix 10-11
IKEA’s Marketing Activity 12
Experimental Marketing 12
Content Marketing & Customer Engagement 12
Digital Marketing & Social Media Engagement 12
IKEA Catalogue & Diversity 13
Relationship Marketing 13
Employee & Customer Satisfaction 13
Segmentation, Targeting & Positioning 13-14
Focused Marketing & Ethical Hot Topics 14-15
Conclusion 15-16
References 15-18
1

Executive Summary
The Swedish retailer IKEA has been a phenomenon in the home furnishing
business with cost-conscious design furniture. The purpose of this case study
is to provide a better understanding of what the “IKEA Experience” is and how
it can be enhanced. The study reveals implications for retailers striving for an
improved customer experience, especially in retail environments Post COVID.
To build a brand, companies must create a differentiating vision, adapting the
brand according to different cultures, fully aligning all strategic elements,
maintaining an identity consistent, and building a team of believers is
essential (Robinson, 2019).
This study focuses on investigating and analysing the marketing strategies
and tactics used by IKEA to evaluate its marketing position and the business
environment they operate in (readymade furniture, home appliances, and
accessories). Firstly we discuss the vision, mission, values and business
concept of IKEA. Secondly, we will analyse its marketing strategy based on the
Ansoff growth matrix, Porters’ five forces model, Porter’s generic strategy, STP
principles and PESTLE environmental analysis for an external business
environment. Then we will discuss how IKEA translate their vision into reality
through different CSR or sustainability initiatives from social, environmental to
cultural perspectives. Finally, we will conclude this study by comparing what
IKEA is doing with what it should be doing according to these analyses.
2

Introduction
The Ikea Group was established in Sweden in 1943 by Ingvar Kamprad. The
company is one of the world’s largest furniture retailers, with more than 433
stores all over the 50 countries. It has built its reputation on stylish and
affordable products, best-known design-sell and ready-to-assemble furniture,
appliances and accessories retailer. The brand generated annual sales of
more than 41.3 billion euros in 2019 (IKEA, 2020).
Ikea generates $6.1 billion annually, approximately half that of top-ranked bed,
bath & beyond - roughly $12.2 billion. This is done in about 50 stores. Since
then, Ikea is the second strongest domestic retailer in the United States.
According to Forbes, Ikea ranks No 41 among the world’s most valuable
brands and is well behind Walmart (No. 24), Home Depot (No. 34) and H&M (No.
36)(Forbes,2022). In 1953, IKEA decided to adopt franchising as their business
model. As a result, the company has grown internationally, maintains an
entrepreneurial spirit, safeguards underlying concepts, and serves its
customers and individuals’ best interests(IKEA, 2020).
Figure 1: IKEA Logo Transformation (IKEA, 2020)
Pandemic Impact On Revenue
Despite the significant challenges the global pandemic caused - and will
continue to cause in FY22 - IKEA has improved its performance. Operating
income for the Inter IKEA Group decreased in FY21 by EUR 1,048 million
compared to 2019. The most significant impact was the cost of goods sold
which amounted to EUR 45,617 million in FY21. This is EUR 5,450 million more
than last year due to increased transport costs and raw material prices (IKEA,
2021).
3

They are also turning a significant corner with new investments to secure
long-term digital and retail capabilities and growth, supported by a
strengthened financial position. The global pandemic affected operating
income in FY21. The biggest factor in this is the increased transportation and
raw materials prices in the second half of the financial year. You can see the
full impact of this in increased costs for goods sold, which reflect the cost of
sourcing, handling, and distributing IKEA products. As retail sales increased in
FY21, the income of 3% of the franchise fee rose accordingly.
Figure 2: IKEA Global Presence (Molly, 2014)
1 IKEA’s System B.V. and its subsidiaries. Inter IKEA Systems B.V., it is the
franchisor and owner of the IKEA Brand.
2 IKEA Supply AG, IKEA Industry AB and related businesses make IKEA
Core business range, which is responsible for developing and
designing the overall IKEA product range.
3 IKEA Supply AG to source and distribute IKEA products to IKEA
franchisees. IKEA Industry AB, a strategic IKEA manufacturer owned by
Inter IKEA Group, is closely integrated with Core Business Supply.
4 IKEA Group - This functions for legal, finance and other activities. To
support the Core Business, like IKEA Industry AB that owns and
operates the IKEA Hotel & Museum.
5 Other IKEA Group Support Businesses, that support group activities
locally and globally.
Figure 3: IKEA Group Activities and Sectors (Inter IKEA Systems B.V, 2020)
4

IKEA’S Stakeholders Analysis & Global Market
Stakeholder Analysis
What constitutes a stakeholder is a group or individual who can or is affected
by an organisation’s objectives (Freeman, 1984). Acknowledging and
understanding stakeholders is essential to developing credibility,
understanding different perspectives, and gaining buy-in and support
(Rabinowitz, 2020). IKEA is focused on building relationships with its
stakeholders, including the board of directors and all suppliers, employees,
customers, and community members. It must be able to identify its
stakeholders’ growing expectations by listening and communicating
effectively with them.
Direct (Primary)
Stakeholder
The stakeholders with a formal and direct relationship
with the organisation like owners, suppliers, employees
and customers.
Indirect
Stakeholder
The stakeholders with ongoing or abiding interests with
the organisation but there is no direct relationship
between citizens and society as a whole.
Secondary
Stakeholder
The stakeholders who would encompass public and
occasional interests in the organisation’s activities groups
like media, consumer advocates and local community
organisations.
Figure 4: Stakeholder Categories (Murphy et. al, 2012) and (EBEN Ireland, 2020)
Stakeholders List Stakeholders Category
Owners, Employees, Managers, Shareholders Internal Direct
Suppliers, Distributors, Intermediates, Agents &
Customers
External Direct
Competitors, Citizens, Society & Governments External Indirect
Public Media, Consumer/Community
Organisations, Regularity, NGO’s, Sustainability
& CSR Organisations
External Secondary
Figure 5: Stakeholder Board Register & Categories
In order to understand IKEA’s business position, we need to use tools like
Ansoff’s matrix, SWOT analysis, and PESTLE. These tools will help us better
understand how external factors influence their operations.
5

Ansoff’s matrix
The Ansoff Matrix, also known as Product-Market Expansion Grid, is a tool
used for developing business growth strategies by Igor Ansoff, a Russian
American mathematician and businessman. The matrix illustrates four growth
strategies: market penetration, market development, product development
and diversification (Ansoff & McDonnel, 1990). Ansoff’s matrix is used to analyse
IKEA’s marketing strategies below;
Market Penetration IKEA penetrates markets using its strong brand
name and selling cheap, high quality and
standardized products. They offer a wide range of
innovative designs and exploit economics of scale
with huge distribution networks.
Product
Development
IKEA is continuously developing new products to sell
to their existing markets; they have a 12,000 - Product
range with 2000 new products yearly. IKEA heavily
invests in R & D, using its unique franchising model
and strategic partnership.
Market Development IKEA seeks to find new markets for their existing
products; they plan to enter developing markets
soon. IKEA heavily invests in technological advances,
consumer engagement (Digital Marketing) which
helps them gain an advantage over competitors.
Diversification IKEA is developing new products to sell to new
markets, IKEA restaurants and children play areas
and day-care within furniture retail stores can be
stated as an example of diversification
Figure 6: IKEA Analysis using Ansoff’s Matrix
SWOT Analysis
The SWOT analysis entails the company’s strengths, weaknesses,
opportunities, and threats. This tool guides the business to determine its
position in the market (Schooley, 2019). An analysis of IKEA’s position is
provided below;
STRENGTHS Innovative and
functional designs;
Products
Standardization,
Sourcing and cost
advantages; Long-term
planning, huge
automated distribution
Low product quality
perception by
customers(Chia-Chen,
2009), Poor Marketing-
Advertising-Promotion
Techniques, Quality of
Low-Cost Products,
Limited Visibility, Remote
WEAKNESSES
6

centres, ability to furnish
an entire home,
adapting to local market
tastes, aggressive
approach to
sustainability, economies
of scale, strong
franchising system, Long
term partnerships with
suppliers; Global brand
image, Direct interaction
between design and
manufacturing teams.
Locations, Relatively
Complicated Furniture
Assembly, High Delivery
and Assembly Prices.
OPPORTUNITES Long term partnerships
with suppliers; reduced
costs, Brand Visibility
Improvement;
strengthening their
marketing activities;
strengthening their
online shopping
experience; creating a
platform for furniture
assembly training,
worldwide demand for
greener products; Entry
into new countries
(South America) and
emerging markets
(China), Opportunities in
R & D and digital
innovation.
The Impacts of COVID-19;
financial crisis and
economic recession,
Emergence of substitute
products; increased
competition, increased
trade barriers, increased
cost of production; Shift
in consumers tastes;
shortage of skilled
workforce, lack of
differentiation, Damaged
reputation due to series
of incidents (Word-Of-
Mouth, Marketing Flops).
THREATS
Figure 7: SWOT Analysis of IKEA, Source: (Tyler, 2018), (Amine, 2015), (Leob, 2012), (Kelly-Detwiler,
2014), (PaulShepherd, 2020), (IKEA, 2020), (Frue, 2018), (Sahin, 2015), (Ringstrom, 2020) and (Clifford,
2019)
PESTEL Analysis
PESTLE helps companies review their strategic business position, determining
opportunities, future direction, and overall competitive advantage (CIMA, 2016).
IKEA’s external environment combines six factors, namely political, economic,
social, technological, legal and environmental. In order to formulate business
strategies that counter external threats and maximise the benefits of
opportunities present in the environment, these factors are crucial (Hall, 2020).
Here is a presentation of IKEA’s external environment through PESTLE;
Political Exporting foreign goods in unfriendly/friendly and
unstable/stable countries; countries attitudes towards
the foreign brand, corruption levels, bureaucracy,
decision-making process and decision maker’s mind-
frame and political events/initiatives. Examples are
7

Taiwan and China’s political issues, the Indian
approach “Made In India” for foreign investors and
BREXIT.
Economic Eurozone and Britain’s decision to exit the Eurozone
(Brexit) – IKEA fear a massive impact on its business
because they have UK as their biggest market in the
world. IKEA’s rapid growth is due to its low-cost strategy
that drives its success worldwide. This can be attributed
to the fact that the economies that these stores are
placed are growing at a relatively high rate for example
China.
Social Products can be standardised but culture can’t;
standardised culture cannot be forced on other
cultures. Issues like homosexuality acceptance, using
women in marketing in Islamic countries and marketing
materials translation issues are serious matters to
consider.
Technological Demand for online sales and customer interaction
platforms; Increased demand on E-commerce
platforms, mobile applications, Artificial Intelligence;
Robots; Its implementation into the core business
model.
Legal IKEA will have to maintain the diversity of its business,
as each country has its own laws and regulations with
different levels of global integration of common
interests subjects like safety, labour laws and human
rights in countries, state regulations, laws and
legislations. Indian regulation to source 30% of
originations inventories from local sources, bad labours
working conditions must be considered.
Environmental Environmental Challenges and Sustainability are
contemporary hot topics for all businesses right now!
Peoples awareness is increasing and their demand to
change organisations behaviour and account for them
more Brand Activism is at an all-time high. More
sustainable product range, higher demand online due
to COVID-19.
Figure 8: IKEA PESTEL analysis reviewed explained. Sources: (IKEA, 2020), (Sridharan, 2018), (Frue,
2018), (Limaye, 2018), (Shane, 2018), (Winsor, 2016), (Jeong-ho, 2018), (England, 2016), (BBC, 2015),
(France24, 2012), (Quinn, 2012), (Griner, 2020), (Duken, 2013), (Prabhakar & Bureau, 2012), (Miller,
2016), (Gibson, 2019), (Frankel, 2020), (Staff, 2018), (Popper, 2011), (Reuters, 2015) and (Doyle, 2015).
This report has analysed various aspects of IKEA’s strategic environment in
Europe, India and China, also globally and has come up with the following
suggestions based on findings after SWOT analysis and other marketing
strategies. Executives at IKEA should take the following steps to be successful
in the international market:
8

● Focus more on the use of clean energy sources and sustainably
sourced materials.
● Increasing brand and product visibility should revolutionise marketing
activities. This retains current customers and increases profits for you.
● Use the online sales platform, social media, and mobile applications to
reach more online sales; marketing channels like Facebook, YouTube
and Instagram.
● Use recycled materials and eco-friendly energy sources to maximise
sustainability.
● Understand and respect unique cultural characteristics and avoid
politics and sensitive subjects.
● Establish a long-term partnership with intermediates and existing
franchising systems to cover more geographic areas.
● Their long-term and close distant partnerships with suppliers will drive
increased economies of scale and lower prices.
● Extend investments in automation, R&D, and innovation.
● Enhance, train, and sustain local human resources.
● Actively participate in other CSR initiatives such as human rights, child
labour, poverty reduction...etc.
This report aims to evaluate the extent to which IKEA advances its market
position by keeping up with market trends to compete effectively and analyse
whether the company capitalises on its existing strengths and devises new
opportunities.
IKEA’S Global Market
IKEA is a global home furnishing retail company focused on sustainable
quality and customised design. The increased availability of online products
from IKEA has led to the growth of being one of the largest retailers in the
world (Kotler & Keller, 2017). An organisation creates, offers or exchanges
goods of value with others through its social process, by which they obtain
what they need and want. Global marketing enables businesses to minimise
redundancies, reduce costs and tap into a wider talent pool by accessing
cheaper labour with more expertise in specific fields. For a company to
engage in successful global marketing, it will require the standardisation of
ideologies in local markets and flexibility in accommodating unique
characteristics.
IKEA develops marketing concepts that are planned and created through
seven steps:
● Starting with the customer.
● Co-creating together.
● Expressing through strong brands.
● Spending less on production.
● Working together.
● Creating better life at home.
9

● Making IKEA accessible to many more people.
Our Global Marketing Department supports IKEA in growing sales, minimising
prices and assuring product availability. We have our finger on IKEA’s pulse –
understanding and responding to current trends, pinpointing where we
should do better and identifying opportunities for IKEA to improve
performance. In the end, that’s what we’re all working towards – a better
everyday life for many people.
Figure 9: Marketing Planning Stages (EZMarketing Team, 2018)
4P’s Of IKEA’s Marketing Mix
The 4Ps relate to the product or service the company is offering, your price or
charging for a product/service, your place, how and where you are selling it
and promotion or how you make people aware. IKEA’s marketing mix is an
integral part of the company. The marketing mix or “4Ps” involves product,
place, price, and promotion. The 4P’s are intertwined with IKEA’s marketing
strategy. The marketing mix is as follows:
Product:
IKEA’s product range falls into four categories: furniture, bathroom and
kitchen items, appliances and home accessories. The company estimates the
furniture segment to account for 78% of its sales, while 21% is generated by
other products such as décor, cookware and linens. IKEA has 12,000 products
in range, with 2,000 new and innovative products yearly. They are also
10

planning to use recycled materials in the future. Not only do they provide
products, but they have restaurants and playgrounds.
Price:
According to (IKEA, 2020), IKEA can achieve cost leadership without
compromising its quality through different approaches like economic of scale,
top-down pricing, flat packaging, long-term relationships with suppliers and
the use of smart technology, R&D and innovation.
Place:
IKEA is an international furniture seller which has 433 stores in 50 countries. Its
showrooms are large, with out-of-town facilities like restaurants, food shops, a
Swedish market, and a children’s play area (IKEA, 2020). IKEA’s supply chain
contains 1,800 suppliers in 50 countries and uses 42 trading service offices
worldwide (TradeGecko, 2018). About 22% of its products are made in China
(IKEA, 2020). The company also operates on the internet through online
purchasing and social media.
Promotion:
The company uses traditional and digital channels such as physical and
online catalogues, television, newspapers, social media portals, sponsorships,
and critical journalists’ reviews through a comprehensive promotion
campaign.
Figure 10: 4P’s Marketing Mix (University of York, 2020)
11

IKEA’s Marketing Activity
Integrated marketing communications can be interpreted from a broad or
narrow perspective. The broad perspective is the holistic view of all aspects of
marketing, but the narrow perspective deals with external integration and
control (Payne, 2009; Schultz & Kitchen, 2011). The integrated campaigns tend to
be more effective when supported by internal integration and management
(Schultz & Kitchen, 2011). IKEA uses this method;
Experimental Marketing
Furniture can be purchased anywhere, but IKEA offers its customers a unique
experience. IKEA is making its marketing more experimental and whimsical by
using shoppable images to position and test its products on an online
platform (Leibowitz, 2020). IKEA customers can also experience their desired
interior design through the application that superimposes their products in
consumers’ homes. The group “I wanna have a sleepover in IKEA” replied by
providing people to spend a night in the warehouse ( Michon, 2019). IKEA’s
experimental product search features on its app have assembled a list of
some of our most popular products for consumers to browse through and get
design inspiration easily.
Content Marketing & Customer Engagement
Basically, content marketing, in essence, means that instead of interrupting
advertising (advertising products), the goal of this method is to generate and
distribute valuable, relevant, and consistent content that attracts and retains
a clearly defined audience and ultimately drives profitability among
consumers. IKEA uses content marketing very efficiently by telling the stories
that influence people to share their accounts through social platforms and
journal articles (Walgrove, 2014). Visiting people in their homes to understand
their real-life experiences and collect valuable data that aids proactive
marketing decisions (Goudreau, 2013).
Digital Marketing & Social Media Engagement
With its interactive website, online catalogues, and presence on social media
portals that are used to post promotions, discounts, exclusive giveaways,
events, and news, IKEA has maximised the use of digital and social media as a
core of its marketing activities (Duncan, 2019 and Dessy, 2017). In addition, IKEA
has invested in a mobile application where features like filtering products and
reviews can be done (Ikea Corp. 2019d). For example, after a month-long beta
test in the U.S. and Europe, IKEA is officially launching its “Shop & Go” service
that allows shoppers to scan, pay for items and skip the checkout line using
their own mobile device (Thomas, 2021). According to Cagle (2017), IKEA plans to
increase its social media marketing activities by 13% to 20% by 2021.
12

IKEA Catalogue & Diversity
In 1951 IKEA launched the first issue of their catalogue and had continued to
do so every year for the past 70 years. Last year 203 million copies were
printed and distributed in 35 different languages. The annual catalogue is one
of the most extensive marketing campaigns globally - accounting for 70% of
their marketing budget - and is known to boost profits dramatically each year.
Each issue is carefully crafted and reflects cultural differences as well as
product range and availability (Corner, 2018). Annual catalogues are printed
and distributed in 35 languages to reflect differences in cultural values,
product ranges, and the perceived importance of paper quality in each
market. IKEA has been criticised for excluding lesbian, gay, bisexual, and
transgender (LGBT) couples from their catalogues in many countries,
including Russia and Poland, but not in countries that do not expressly
prohibit same-sex displays of affection. A 2015 Russian catalogue showing
what appeared to be a lesbian couple was praised by LGBT rights activists but
scrutinised by Russian authorities (Anand, 2019). In addition to reviewing the
market perception of paper quality, IKEA uses five different types of paper and
also as an aspect of them going green (Quito, 2017).
Relationship Marketing
In order to maintain customer loyalty and build long-term relationships, IKEA
is moving away from transactional marketing to relationship marketing (Manz
et al, 2008). The main concern is not how effective marketing will be in the
future, but how it will achieve better customer relationships. IKEA understands
that customer satisfaction is based on the overall lifetime value of customers
(Neumann, 2003). This means a great need for a capable and informed
customer service team who understand how customers like to be treated and
the importance of having a genuine concern for customers.
Employee & Customer Satisfaction
The key to an organisations’ success is continuous customer happiness and
satisfaction. To accomplish this, IKEA employs employee initiatives that
improve morale, loyalty, and productivity (Lamba, 2018).In 2017, IKEA was voted
72nd best place to work (Fortune, 2018), ranked 31st world best employer
(Forbes, 2020) and certified as a top-five company to work in
(GreatPlacetoWork, 2018). After all, happy employees will lead to satisfied
customers. Employee and customer satisfaction are vital to the success of an
organisation. At IKEA, the company embraces employee initiatives to increase
their engagement and morale by offering excellent benefits and a robust
corporate culture.
Segmentation, Targeting & Positioning
Segmentation: The Variety Range, “Ability to assemble”, and the design of IKEA
are focused on the target market (Blome, 2015).
13

Targeting: The products target consumers who have a need of space-saving
and a love for modern design in their homes (Steenkamp & Hofstede, 2002).
Positioning: through its “functional and affordable” offerings with design
statement furniture (Blome, 2015), this provides more reason for different
segments to consider buying from IKEA;
Figure 11: IKEA Segmentation, targeting and positioning (Source: dudovskiy, 2017)
Focused Marketing & Ethical Hot Topics
This unit will look at additional marketing and hot ethical topics that affect
IKEA as a corporation and solutions. Our discussion of IKEA’s marketing and
hot ethical issues will focus on public relations and green marketing. We will
also discuss IKEA’s approach to customer loyalty, in addition to the ethical
behaviours toward people IKEA already implements;
● IKEA uses the Focused Marketing strategy to pursue fairtrade and
ethical sourcing through the IKEA code of conduct for suppliers (IWAY).
For example, in India giving financial aid to women and providing
education for children (Child Labour Laws). IKEA’s code of conduct for
suppliers (IWAY) and social media management could be merged to
highlight the ethical issues related to IKEA products and further build-
up for IKEA’s fair trade campaign.
● Consumers use the internet to research products, read reviews and
purchase; hence, the data generated while performing these searches is
valuable for companies to sell on the dark web (Besong et al., 2018).
Personal information is identified as Personally Identifiable Information
(PII), which includes name, address, internet browsing history, financial
information, medical records, etc. The advancement in technology has
significantly impacted the amount of information collected by
researchers. Companies like Facebook and Google devalue privacy by
14

selling their customer’s private data to advertisers (MacMillan et al.,
2018). Other than selling confidential information, various breaches may
cause personal data loss. IKEA’s app TaskRabbit had a cyber-security
breach that left customer’s personal information exposed to
unauthorised third parties (BBC, 2019). As a result of this breach, IKEA
acquired TaskRabbit in 2017. Issues associated with data privacy in light
of the latest cyber-security breaches should be of top priority to IKEA.
● IKEA’s promising to have 100% circular products in 2030 using
renewable/recycled materials as a response to meet market demand
and increasing consumer awareness, who are looking for
environmentally friendly products (Bridges & Wilhelm, 2008). It uses rice
straws residue into products and packaging material, turning ocean
plastic waste into textiles, and using 100% sustainable cotton (IKEA, 2020).
This ensures that brand activism and the company’s ethical issues are
turned into strengths and not weaknesses.
● There have been issues of sexism, bad translations, shouting at workers,
animals welfare, etc., that caused unpopularity for IKEA. At this point, it
becomes a perfect opportunity for them to adapt their mistakes and
learn from them to excel in business and be ethically correct in
marketing strategies to avoid becoming disliked by any culture. Despite
its global reputation, the company continuously addresses unethical
issues that arise from cultural gaps. IKEA is the most significant global
household goods retailer globally, and it is Swedish owned. One of the
biggest challenges facing IKEA is adapting to cultural differences, for
example; Publishing a homosexual advertisement in Russia, which is
rejected by their culture (Anand, 2019).
● Lastly, IKEA needs to change its advertising strategies in response to
artificial intelligence (A.I.) and augmented reality (A.R.). On April 20, 2020,
IKEA announced a donation of 100 million euros in response to the
COVID-19 global pandemic. This donation includes monetary and
product donations as well as online consultations services that are
extended to customers and replace offline, face-to-face meetings
during times of social distancing. These online advisory appointments
can be booked online through the websites of IKEA’s different countries.
The features included augmented reality during online sessions and
kitchen design options. The customer gets to see kitchen design
solutions inspired by IKEA’s offline showroom settings (IKEA, 2020).
Conclusion
To maintain its position among prominent furniture companies, IKEA needs to
review its business activities and constantly improve its operational efficiency.
Its key components are productive suppliers, competitive advantage and
customer satisfaction competitiveness. In addition, IKEA needs to enhance
their visibility and online operations and revolutionise its marketing efforts to
keep ahead of other rivals. As a result, IKEA has set the benchmark for other
companies to follow and continues to pave the way for success.
15

The external analysis shows that IKEA’s competitive advantage is mainly
derived through maintaining sustainability development, cost leadership and
customer satisfaction simultaneously. Internal investigation shows that they
have a strong brand recognition; consequently, they can attain higher
customer loyalty. At the same time, they have a culture of constantly
upgrading their product designs and sustainability strategies. They need to
institutionalise their continuous improvement from each new design through
their purchasing processes, especially in the era of COVID. Millennials
worldwide are especially concerned about their designs’ cost, quality,
sustainability, and creativity, and therefore IKEA should invest in social media
promotion to target that demographic. In addition, they can use their social
media channels and online platforms to promote innovative furniture
assembly education, making it less complex. Lastly, based on the Data
Analysis above and the conclusions drawn, IKEA has a lot of opportunities for
growth in many areas. An example is an expansion into the mobile market.
Through its online features, IKEA could also expand into new countries and
markets, eliminating physical locations and emphasising only distribution
channels to be more cost-efficient.
References:
● Akinsowon, P. (2013, November 7). Strategic Managment Lecture.
Strategic Managment. London, London, UK: Peter Akinsowon. - Amanda
Walgrove, A., 2014. How IKEA Became Kings of Content Marketing.
Amanda Walgrove, [Online]. Available at:
https://contently.com/2014/11/07/how-ikea-became-kings-ofcontent-
marketing/ [Accessed 19 February 2022].
● Amine, M., 2020. IKEA’s business and operating models: a match made in
heaven. The HBS Digital Initiative, [Online]. Available at:
https://digital.hbs.edu/platform-rctom/submission/ikeas-business-
andoperating-models-a-match-made-in-heaven/ [Accessed 19 February
2022].
● Anand, A., 2019. Importance of IKEA Catalogue. Medium, [Online].
Available at: https://medium.com/@avinashanandikea/importance-of-
ikea-catalogue446a94910d0e [Accessed 19 February 2022].
● Ansoff Matrix. 2020. What is the Ansoff Matrix?. [ONLINE] Available at:
https://www.ansoffmatrix.com/. [Accessed 19 February 2022].
● Bartlett, C., 2006. IKEA's Global Sourcing Challenge: Indian Rugs and
Child Labor (A). Harvard Business School, [Online]. Available at:
https://www.hbs.edu/faculty/Pages/item.aspx?num=33278 [Accessed 19
February 2022].
● BBC, 2015. Ikea closes website in Russia over 'gay propaganda' fears.
BBC, [Online]. Available at: https://www.bbc.com/news/world-
europe31879850 [Accessed 19 February 2022]. 22
16

● BBC, 2017. Ikea apologises for 'sexist' China advert. BBC, [Online].
Available at: https://www.bbc.com/news/world-asia-china-41757971
[Accessed 19 February 2022].
● BBC, 2018. Ikea app TaskRabbit reveals security breach. BBC, [Online].
Available at: https://www.bbc.com/news/technology-43796596 [Accessed
19 February 2022].
● Beth Michon, B, 2019. Increasing customer engagement with experiential
marketing. Michon, [Online]. Available at:
https://michoncreative.co.uk/news/increasing-customer-engagement-
withexperiential-marketing/ [Accessed 19 February 2022].
● Cain, A., 2019. Ikea's new app has a feature to rival Amazon, Target, and
Wayfair. Business Insider, [Online]. Available at:
https://www.businessinsider.com/ikea-new-app-shop-furniture-
augmentedreality-2019-5 [Accessed 19 February 2022].
● Alzghool, M. Z. (2020, October 27).
An evaluation of IKEA’s global
position and marketing standing. Research Gate. Retrieved February 20,
2022, from
https://www.researchgate.net/profile/Mohammed-Alzghool/publication/
346059671_An_evaluation_of_IKEA
%27s_global_position_and_marketing_standing/links/
5fb94628458515b7975d11a8/An-evaluation-of-IKEAs-global-position-and-
marketing-standing.pdf
● Burt, S., Johansson, U., & Thelander, Å. (2008, November 7).
Standardized
Marketing Strategies in retailing? IKEA’s marketing strategies in
Sweden, the UK and China. Research Gate. Retrieved February 20, 2022,
from
https://www.researchgate.net/publication/223947182_Standardized_mar
keting_strategies_in_retailing_IKEA's_marketing_strategies_in_Sweden_th
e_UK_and_China
● Stackpole, T. (2021, June 4).
Inside IKEA's Digital Transformation. Harvard
Business Review. Retrieved February 20, 2022, from
https://hbr.org/2021/06/inside-ikeas-digital-transformation
● Danziger, P. N. (2018, January 17).
Ikea gets no respect, but it should.
Forbes. Retrieved February 20, 2022, from
https://www.forbes.com/sites/pamdanziger/2018/01/17/ikea-gets-no-
respect-but-it-should/?sh=3dbe22f484d1
● Forbes Magazine. (n.d.).
IKEA. Forbes. Retrieved February 20, 2022, from
https://www.forbes.com/companies/ikea/?sh=5eb2ac5f2ad0
● Swant, M. (2021).
The 2020 world's most valuable brands. Forbes.
Retrieved February 20, 2022, from https://www.forbes.com/the-worlds-
most-valuable-brands/#115009dc119c
●
FY21 financial results. Inter IKEA Group. (n.d.). Retrieved February 20, 2022,
from https://www.inter.ikea.com/en/performance/fy21-financial-results
● The IKEA franchise system. (n.d.). Retrieved February 20, 2022, from
https://www.inter.ikea.com/en/this-is-inter-ikea-group/the-ikea-
franchise-system
●
IKEA stores across the world. IKEA. (n.d.). Retrieved February 20, 2022,
from https://www.ikea.com/gb/en/this-is-ikea/about-us/reaching-more-
of-the-many-people-pub3b03c401
● Haraldsson, T., Lilja, M., & Johansson, D. (2020, May 27).
The effects of
digitalization on the IKEA organization in Digitally Advanced Markets.
Diva Portal. Retrieved February 20, 2022, from https://www.diva-
portal.org/smash/get/diva2:1441998/FULLTEXT01.pdf
17

● Isaksson , R., & Suljanovic, M. (2006, June).
IKEA Experience . Diva Portal.
Retrieved February 20, 2022, from
https://www.diva-portal.org/smash/get/diva2:1032639/FULLTEXT01.pdf
● UKEssays. (November 2018). IKEA's Strategy Formation Process. Retrieved
from https://www.ukessays.com/assignments/ikeas-strategy-formation-
process-8254-2021.php?vref=1 [Accessed 19 February 2022].
● PA, L. (2018, December 11).
6 steps to build a successful marketing plan.
EZ Marketing. Retrieved February 20, 2022, from
https://blog.ezmarketing.com/6-steps-to-build-a-successful-marketing-
plan-with-template
● Fallon, M. (2014).
IKEA: A Review of Recent International Expansion and
Opportunities within Mexico’s Urban Cities. Retrieved February 20, 2022,
from https://auislandora.wrlc.org/islandora/object/auislandora
%3A10407/datastream/PDF/view
● Kullnig, I. (2020).
The image of IKEA’s online portals in Times of COVID19
With Regards to its CSR and Experiential Marketing Exemplified by IKEA
Austria. Retrieved February 20, 2022, from
https://www.diva-portal.org/smash/get/diva2:1482601/FULLTEXT01.pdf
● IKEA. 2019. About social and environment. [ONLINE] Available at:
https://www.ikea.com/ms/en_JP/customer_service/faq/help/about_ikea/
soc ial_environment.html#1 [Accessed 19 February 2022].
● Hall, M., 2020. Porter's 5 Forces vs. PESTLE Analysis: What's the
Difference?. Investopedia, [Online]. Available at:
https://www.investopedia.com/ask/answers/041015/whats-
differencebetween-porters-5-forces-and-pestle-analysis.asp [Accessed
19 February 2022].
● Hughes, T., 2012. Ikea left red-faced after translators reveal their product
names sound like Thai words for sex acts. Daily mail, [Online]. Available
at: https://www.dailymail.co.uk/news/article-2156445/Ikea-left-red-
facedtranslators-reveal-product-names-sound-like-Thai-words-
sexacts.html [Accessed 19 February 2022].
● Ingka Group. 2020. Ingka Group launches data promise to customers.
[ONLINE] Available at: https://www.ingka.com/news/ingka-group-
launchesdata-promise-to-customers/ [Accessed 19 February 2022].
● Inter IKEA Systems B.V. 2020. IKEA VISION, CULTURE AND VALUES.
[ONLINE] Available at: https://ikea.jobs.cz/en/vision-culture-and-values/
[Accessed 19 February 2022].
●
18