University Report: Analyzing IKEA's Sustainability Approach

This report provides a critical analysis of a journal article focusing on IKEA's sustainable marketing and management practices. It begins with an executive summary, introduction, and an overview of the selected journal article, 'Green Marketing and Sustainable Development: A Statistical Survey on IKEA Customers’ Perception,' which associates sustainable marketing with company profits, using IKEA as a case study. The report examines key elements such as the rising importance of sustainable marketing, sustainability as a tool for stakeholder response, the evolving company-community relationships, and the impact of greenwashing. It discusses the impact of IKEA's sustainable marketing on its annual turnover and provides a critical analysis of the points mentioned in the article, highlighting the growing awareness of environmental exploitation and the potential for deceptive practices in sustainable marketing. The report concludes with a discussion of the article's strengths and weaknesses and suggests topics for further exploration.

Running head: ANALYZING IKEA’S SUSTAINABILITY APPROACH
Analyzing IKEA’s Sustainability Approach
Name of the University
Name of the Student
Author note

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ANALYZING IKEA’S SUSTAINABILITY APPROACH
Executive Summary
The chief purpose of the report is to provide a critical analysis of a journal article based on
sustainable marketing and management. The report introduces the article and the content and
then elaborates further in the overview of the article. Further, the report discusses the key
elements of the article that includes the company on which it has focused. The company is
IKEA, the leading manufacturer and seller of home furnishing items. It is also involved in many
social works and environment safeguarding initiatives. The report concludes with an overall
discussion of the article and its drawbacks while recommending the topics that could have been
included.

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ANALYZING IKEA’S SUSTAINABILITY APPROACH
Table of Contents
Introduction......................................................................................................................................3
Overview of the journal...................................................................................................................3
Discussion on key points.................................................................................................................5
Critical analysis of the points mentioned.........................................................................................7
Conclusion.......................................................................................................................................8
References:....................................................................................................................................10

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ANALYZING IKEA’S SUSTAINABILITY APPROACH
Introduction
The issue of sustainable development has troubled world leaders since the time it was
proposed. Sustainability is something that has been recognized as the most important aspect of
any work, be it economic or political. In the field of marketing and management, sustainability
has occupied an important role. Brindley and Oxborrow (2014), mentions that the scenario was
not the same some decades ago and large companies openly neglected environmental issues.
However, the scenario started to change after it was found that the environment was being
heavily damaged.
The journal article that has been selected to analyze critically is ‘Green Marketing and
Sustainable Development: A Statistical Survey on IKEA Customers’ Perception’ (Passaro,
Perchinunno and Schirone 2015). In the article, the authors have tried to associate sustainable
marketing with company profit by drawing example from IKEA, one of world’s top
manufacturers and seller of home furnishings. The report provides a critical analysis of the points
discussed in the journal article.
Overview of the journal
In order to find the major points mentioned in the article, the basic theme has to be
analyzed first. In the article, the authors have discussed the concept of sustainability and its
relevance in the field of management and marketing. Sustainability, argue the authors, refers to
the crucial transformation that defines the company and community relationship. They analyzed
the adoption of social responsibility policy of IKEA and its impact on turnover.
Further, the authors have provided an explanation of sustainability defining it as the
responsible use of non-renewable resources that would ensure development for present cohort

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without negotiating the future generation. Sustainability has recently been inducted into the
economic structure as the leading corporate gradually realized the importance of being
responsible. It not only helped the company contribute to society and environment but also
attracted consumers and revenues. However, in the past decades, economists greatly
underestimated the significance of natural resources in the end production. Adopting
sustainability as an objective fundamentally changes the method of productive activities. The
focus shifts to an awareness of the lack of natural resources and its consequences on the entire
system.
Many years since, large numbers of firms have implemented the sustainable marketing
strategy in order to make the most of the competitive edge. The competitive gain derives from
the rise in value proposal of consumers who demonstrate an increased awareness regarding eco-
sustainable politics. It is but imperative to note that this sustainability strategy has been
employed by companies to hide behind the veil of social responsibility and lure customers with
false campaigns and advertisements. In case of IKEA, they have strict rules regarding the
maintenance of sustainability at every stage from production to marketing and distribution. The
corporate social responsibility (CSR) policy framework of IKEA requires the company to
manufacture products that are environment friendly and that put minimum pressure on the
environment (Rastogi and Khan, 2015). With a view to maintain it, the company has
incorporated systems that create products that consume fewer natural resources and that are more
energy efficient.
The key points thus identified from the article include,
 The rising significance of sustainable marketing and management

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 Sustainability as a tool to respond to stakeholders
 Sustainability refers to a vital change between the company-community
relationships
 ‘Green-washing’ of consumers by companies in the name of sustainability
 Impact of adopting social responsibility on turnover of IKEA and
Discussion on key points
The first point that has been identified as an important factor to assess sustainability in
terms of management and marketing is its growing vitality. According to Rakic and Rakic
(2015), the changing paradigm of marketing from being profit-oriented to sustainability-oriented
has been one of the key features of the present generation. The authors also point out that this
paradigm of marketing has compelled economic leaders to include sustainability has an integral
part of their companies.
The second key point of the article is sustainability being used as a tool to respond to
stress from different stakeholders. In the article, it has been mentioned that sustainability in
marketing assists owners of various companies to satisfy customer and clients’ needs. When a
product does not yield desired outcome for a company, it utilizes the sustainable marketing
strategy to attract customers.
The third point identified in the article that draws attention is the changing dynamics
between company and community. The relationship between the two entities has witnessed a
change after the inclusion of sustainability within the economic horizon. Companies have
become more accountable to the community it is and communities have been bestowed with
more authority to decide the fate of companies in terms of sustainable marketing.

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Fourth, the article sheds light on the misuse of the sustainability concept by many to earn
profit. Many have been involved in false propagation of sustainability through misleading
advertisements and campaigns with hidden agendas. The term ‘greenwashing’ refers to the
process of deceiving the customers into believing that the company is promoting green
marketing that is sustainable marketing whereas the truth is the opposite of it.
The fifth and the most important point mentioned in the article is the impact of
sustainable marketing on IKEA’s annual turnover. IKEA has been in business since the early 20th
century and it has established an unbreakable reputation (Ikea.com 2018). In one of its recent
endeavors, the company’s inter-group has introduced a program that relates to sustainable
agriculture. Going by the figures of the last year, there is no doubt that the company has made
great profits both in terms of revenues and customers. According to its official site, IKEA earned
a profit of around 40 billion euro in 2017 with 2.3 billion website visitors and 936 million store
visitors. IKEA’s annual revenue for the year 2016 was at 35.7 billion euros, an increase of
almost three billion euros from previous year (Statista.com 2018). These statistics prove that
IKEA has been successful in employing sustainable marketing.
Critical analysis of the points mentioned
The article mentions the growing importance of sustainable marketing in the economic
world. The prime reason for making this statement is the evidences that are visible throughout
the globe. Aguinis and Glavas (2017), argues that people became more aware of the exploitation
done on nature in the name of development and they started protesting it. This awareness and
protests was viewed as an opportunity by the companies to attract and retain customers.
According to Johnson (2015), it is important to note that although the capitalists viewed

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sustainable marketing as a weapon to clear out their rivals, it did benefit the environment as a
whole. Organization and companies took initiatives to contribute to the society and the
environment that helped many unfortunate human beings and the environment in general.
Marquis, Toffel and Zhou (2016) counter this view stating that the capitalists have not
even shied away from tricking the customers in the name of environmental sustainability and
social responsibility. They have applied every trick in the book to top the race and beat their
rivals in market competition even if it meant making false claims and declarations concerning
sustainability. In Australia, many companies claimed that they produce organic food whereas
their products failed to meet industry standards. Many surveys have found that companies that
sell their products claiming it to be purely organic do not even have the certified logos labeled to
their product (Abc.net.au 2018). This brings to light, the dangerous picture of fraud sustainable
marketing. Apart from Australia, other countries to have similar cases where big companies do
not shy away from playing with the lives of people in the name of sustainability just to earn
profit (Theguardian.com 2018).
The journal article mentions IKEA and its sustainability policy and its impact on the
company’s annual turnover. The company has managed to maintain its customer base and in fact
even increase the number by manifold with its innovative and responsible initiatives. IKEA leads
in home furnishing and it has been in business for quite a long time. Despite being a leader in its
field, IKEA decided to initiate campaigns like helping the handicapped children, encouraging
recycling of plastic materials and so on (Ikea.com 2018). These initiatives, although sound
marketing strategies have actually helped the company elevate its already strong position. The
annual turnover a s mentioned in the sections above lay proof to its success. Moreover, IKEA

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marketing mix elements speak for themselves. IKEA believes in promoting products with
complete transparency in all the countries where it does business, keeping people above all.
Conclusion
A company must adhere to its claims and promises because people in today’s world
cannot be tricked into buying anything. They need to be honest with their products and services
and the claims they make. The customers have the right to decide which products or services fail
to meet their expectations in terms of sustainability. The article very concisely brings forth the
aspect of sustainable marketing and elaborates its meaning and relevance in the present
economy. However, it lacks the depth that was needed to understand better the nuances of
sustainable marketing. Examples from other companies in other parts of the world may have
been included to structure the article. It is but true that the journal article has successfully
managed to paint a clear picture of the concept, its use and misuse and its future relevancy.

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References:
Abc.net.au (2018). Producers 'greenwashing' food to claim organic label. [online] ABC News.
Available at: http://www.abc.net.au/news/2016-10-13/producers-greenwashing-food-to-claim-it-
is-organic-choice-says/7930532 [Accessed 20 Jan. 2018].
Aguinis, H. and Glavas, A., 2017. On corporate social responsibility, sensemaking, and the
search for meaningfulness through work. Journal of Management, p.0149206317691575.
Brindley, C. and Oxborrow, L., 2014. Aligning the sustainable supply chain to green marketing
needs: A case study. Industrial Marketing Management, 43(1), pp.45-55.
Ikea.com (2018). IKEA.com - International homepage. [online] IKEA. Available at:
http://www.ikea.com/ [Accessed 20 Jan. 2018].
Ikea.com. (2018). The IKEA Group approach to sustainability. [online] Available at:
http://www.ikea.com/ms/en_KW/pdf/sustainability_report/group_approach_sustainability_fy11.
pdf [Accessed 20 Jan. 2018].
Johnson, M.P., 2015. Sustainability Management and Small and Medium‐Sized Enterprises:
Managers' Awareness and Implementation of Innovative Tools. Corporate Social Responsibility
and Environmental Management, 22(5), pp.271-285.
Marquis, C., Toffel, M.W. and Zhou, Y., 2016. Scrutiny, norms, and selective disclosure: A
global study of greenwashing. Organization Science, 27(2), pp.483-504.
Passaro, P., Perchinunno, P. and Schirone, D.A., 2015, June. Green Marketing and Sustainable
Development: A Statistical Survey on Ikea Customers’ Perception. In International Conference
on Computational Science and Its Applications(pp. 130-145). Springer International Publishing.

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Rakic, B. and Rakic, M., 2015. HOLISTIC MANAGEMENT OF MARKETING
SUSTAINABILITY IN THE PROCESS OF SUSTAINABLE
DEVELOPMENT. Environmental Engineering & Management Journal (EEMJ), 14(4).
Rastogi, E. and Khan, M.S., 2015. An analytical study of online advertising and its co-
relationship with green marketing for facilitating sustainable marketing effectiveness. IJAR, 1(5),
pp.182-184.
Statista.com, I. (2018). IKEA: revenue 2016 | Statista. [online] Statista. Available at:
https://www.statista.com/statistics/264433/annual-sales-of-ikea-worldwide/ [Accessed 20 Jan.
2018].
Theguardian.com (2018). 5 products that claim to be sustainable, greenwashing all the way to
the bank. [online] the Guardian. Available at: https://www.theguardian.com/sustainable-
business/2014/aug/25/5-sustainability-greenwash-products-ecofriendly-boondoggles-design
[Accessed 20 Jan. 2018].