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Sustainability at ikea group description.

By 2014, IKEA Group was the largest home furnishing company, with EUR28.5 billion of sales, and planned to reach EUR50 billion by 2020, mainly from emerging markets. At the same time, IKEA Group had adopted in 2012 a new sustainability strategy that focused the company's efforts on its entire value chain from its raw materials sourcing to the lifestyle of its end consumers. The plan especially centered on wood, which represented 60% of IKEA Group's total procurement in volume and constituted a key lever for the company to increase its positive impact on sustainability. IKEA Group Management therefore had to decide how to manage its portfolio of wood sustainability initiatives, especially in the context of the company's aggressive growth plan.

Case Description Sustainability at IKEA Group

Strategic managment tools used in case study analysis of sustainability at ikea group, step 1. problem identification in sustainability at ikea group case study, step 2. external environment analysis - pestel / pest / step analysis of sustainability at ikea group case study, step 3. industry specific / porter five forces analysis of sustainability at ikea group case study, step 4. evaluating alternatives / swot analysis of sustainability at ikea group case study, step 5. porter value chain analysis / vrio / vrin analysis sustainability at ikea group case study, step 6. recommendations sustainability at ikea group case study, step 7. basis of recommendations for sustainability at ikea group case study, quality & on time delivery.

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Case Analysis of Sustainability at IKEA Group

Sustainability at IKEA Group is a Harvard Business (HBR) Case Study on Strategy & Execution , Texas Business School provides HBR case study assignment help for just $9. Texas Business School(TBS) case study solution is based on HBR Case Study Method framework, TBS expertise & global insights. Sustainability at IKEA Group is designed and drafted in a manner to allow the HBR case study reader to analyze a real-world problem by putting reader into the position of the decision maker. Sustainability at IKEA Group case study will help professionals, MBA, EMBA, and leaders to develop a broad and clear understanding of casecategory challenges. Sustainability at IKEA Group will also provide insight into areas such as – wordlist , strategy, leadership, sales and marketing, and negotiations.

Case Study Solutions Background Work

Sustainability at IKEA Group case study solution is focused on solving the strategic and operational challenges the protagonist of the case is facing. The challenges involve – evaluation of strategic options, key role of Strategy & Execution, leadership qualities of the protagonist, and dynamics of the external environment. The challenge in front of the protagonist, of Sustainability at IKEA Group, is to not only build a competitive position of the organization but also to sustain it over a period of time.

Strategic Management Tools Used in Case Study Solution

The Sustainability at IKEA Group case study solution requires the MBA, EMBA, executive, professional to have a deep understanding of various strategic management tools such as SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

Texas Business School Approach to Strategy & Execution Solutions

In the Texas Business School, Sustainability at IKEA Group case study solution – following strategic tools are used - SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis. We have additionally used the concept of supply chain management and leadership framework to build a comprehensive case study solution for the case – Sustainability at IKEA Group

Step 1 – Problem Identification of Sustainability at IKEA Group - Harvard Business School Case Study

The first step to solve HBR Sustainability at IKEA Group case study solution is to identify the problem present in the case. The problem statement of the case is provided in the beginning of the case where the protagonist is contemplating various options in the face of numerous challenges that Ikea Sustainability is facing right now. Even though the problem statement is essentially – “Strategy & Execution” challenge but it has impacted by others factors such as communication in the organization, uncertainty in the external environment, leadership in Ikea Sustainability, style of leadership and organization structure, marketing and sales, organizational behavior, strategy, internal politics, stakeholders priorities and more.

Step 2 – External Environment Analysis

Texas Business School approach of case study analysis – Conclusion, Reasons, Evidences - provides a framework to analyze every HBR case study. It requires conducting robust external environmental analysis to decipher evidences for the reasons presented in the Sustainability at IKEA Group. The external environment analysis of Sustainability at IKEA Group will ensure that we are keeping a tab on the macro-environment factors that are directly and indirectly impacting the business of the firm.

What is PESTEL Analysis? Briefly Explained

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in Sustainability at IKEA Group case study. PESTEL analysis of " Sustainability at IKEA Group" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

How to do PESTEL / PEST / STEP Analysis? What are the components of PESTEL Analysis?

As mentioned above PESTEL Analysis has six elements – political, economic, social, technological, environmental, and legal. All the six elements are explained in context with Sustainability at IKEA Group macro-environment and how it impacts the businesses of the firm.

How to do PESTEL Analysis for Sustainability at IKEA Group

To do comprehensive PESTEL analysis of case study – Sustainability at IKEA Group , we have researched numerous components under the six factors of PESTEL analysis.

Political Factors that Impact Sustainability at IKEA Group

Political factors impact seven key decision making areas – economic environment, socio-cultural environment, rate of innovation & investment in research & development, environmental laws, legal requirements, and acceptance of new technologies.

Government policies have significant impact on the business environment of any country. The firm in “ Sustainability at IKEA Group ” needs to navigate these policy decisions to create either an edge for itself or reduce the negative impact of the policy as far as possible.

Data safety laws – The countries in which Ikea Sustainability is operating, firms are required to store customer data within the premises of the country. Ikea Sustainability needs to restructure its IT policies to accommodate these changes. In the EU countries, firms are required to make special provision for privacy issues and other laws.

Competition Regulations – Numerous countries have strong competition laws both regarding the monopoly conditions and day to day fair business practices. Sustainability at IKEA Group has numerous instances where the competition regulations aspects can be scrutinized.

Import restrictions on products – Before entering the new market, Ikea Sustainability in case study Sustainability at IKEA Group" should look into the import restrictions that may be present in the prospective market.

Export restrictions on products – Apart from direct product export restrictions in field of technology and agriculture, a number of countries also have capital controls. Ikea Sustainability in case study “ Sustainability at IKEA Group ” should look into these export restrictions policies.

Foreign Direct Investment Policies – Government policies favors local companies over international policies, Ikea Sustainability in case study “ Sustainability at IKEA Group ” should understand in minute details regarding the Foreign Direct Investment policies of the prospective market.

Corporate Taxes – The rate of taxes is often used by governments to lure foreign direct investments or increase domestic investment in a certain sector. Corporate taxation can be divided into two categories – taxes on profits and taxes on operations. Taxes on profits number is important for companies that already have a sustainable business model, while taxes on operations is far more significant for companies that are looking to set up new plants or operations.

Tariffs – Chekout how much tariffs the firm needs to pay in the “ Sustainability at IKEA Group ” case study. The level of tariffs will determine the viability of the business model that the firm is contemplating. If the tariffs are high then it will be extremely difficult to compete with the local competitors. But if the tariffs are between 5-10% then Ikea Sustainability can compete against other competitors.

Research and Development Subsidies and Policies – Governments often provide tax breaks and other incentives for companies to innovate in various sectors of priority. Managers at Sustainability at IKEA Group case study have to assess whether their business can benefit from such government assistance and subsidies.

Consumer protection – Different countries have different consumer protection laws. Managers need to clarify not only the consumer protection laws in advance but also legal implications if the firm fails to meet any of them.

Political System and Its Implications – Different political systems have different approach to free market and entrepreneurship. Managers need to assess these factors even before entering the market.

Freedom of Press is critical for fair trade and transparency. Countries where freedom of press is not prevalent there are high chances of both political and commercial corruption.

Corruption level – Ikea Sustainability needs to assess the level of corruptions both at the official level and at the market level, even before entering a new market. To tackle the menace of corruption – a firm should have a clear SOP that provides managers at each level what to do when they encounter instances of either systematic corruption or bureaucrats looking to take bribes from the firm.

Independence of judiciary – It is critical for fair business practices. If a country doesn’t have independent judiciary then there is no point entry into such a country for business.

Government attitude towards trade unions – Different political systems and government have different attitude towards trade unions and collective bargaining. The firm needs to assess – its comfort dealing with the unions and regulations regarding unions in a given market or industry. If both are on the same page then it makes sense to enter, otherwise it doesn’t.

Economic Factors that Impact Sustainability at IKEA Group

Social factors that impact sustainability at ikea group, technological factors that impact sustainability at ikea group, environmental factors that impact sustainability at ikea group, legal factors that impact sustainability at ikea group, step 3 – industry specific analysis, what is porter five forces analysis, step 4 – swot analysis / internal environment analysis, step 5 – porter value chain / vrio / vrin analysis, step 6 – evaluating alternatives & recommendations, step 7 – basis for recommendations, references :: sustainability at ikea group case study solution.

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HBR On Strategy podcast series

How IKEA Evolved Its Strategy While Keeping Its Culture Constant

If you’re leading your team through big changes, this episode is for you.

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The Swedish furniture maker IKEA found huge success producing quality furniture at affordable prices. But in 2017, the company was at a crossroads. Its beloved founder had died, and the exponential rise of online shopping posed a new challenge.

In this episode, Harvard Business School professors Juan Alcacer and Cynthia Montgomery break down how IKEA developed, selected, and embraced new strategic initiatives, while fortifying its internal culture. They studied how IKEA made big changes for the future and wrote a business case about it.

They explain how the company reworked its franchise agreements to ensure consistency among its global stores. They also discuss how IKEA balanced global growth with localization, developing all-new supply chains.

Key episode topics include: strategy, growth strategy, disruptive innovation, emerging markets, leadership transition, competitive strategy, company culture, succession.

HBR On Strategy curates the best case studies and conversations with the world’s top business and management experts, to help you unlock new ways of doing business. New episodes every week.

  • Listen to the original HBR Cold Call episode: IKEA Navigates the Future While Staying True to Its Culture (2021)
  • Find more episodes of Cold Call
  • Discover 100 years of Harvard Business Review articles, case studies, podcasts, and more at HBR.org .

HANNAH BATES: Welcome to HBR On Strategy , case studies and conversations with the world’s top business and management experts, hand-selected to help you unlock new ways of doing business. The Swedish furniture maker IKEA found huge success producing quality furniture at affordable prices. But in 2017, they were at a crossroads. Their beloved founder had died, and the exponential rise of online shopping posed a new challenge. Today, we bring you a conversation about how to develop, select, and embrace a new strategic initiative – with Harvard Business School professors Juan Alcacer and Cynthia Montgomery. They studied how IKEA made big changes for the future while fortifying its internal culture and its external identity. In this episode, you’ll learn how the company reworked its franchise agreements to create a more managerial and modern culture, and ensure consistency among its global stores. You’ll also learn how they balanced global growth with localization – including new supply chains. This episode originally aired on Cold Call in June 2021. Here it is.

BRIAN KENNY: For some of the world’s most celebrated founders, the entrepreneurial drive kicks off at an early age. Mark Zuckerberg developed Facebook in his Harvard dorm room at the age of 18. Michael Dell made $200,000 upgrading computers in his first year of business, he was 19. Before Jack Dorsey founded Twitter, he created a dispatch routing platform for taxis in his hometown of St. Louis, while he was in middle school. But then there’s Ingvar Kamprad who began selling matches at the age of five to neighbors in his rural Swedish homestead. By the age of seven, he was buying matches in bulk in Stockholm and selling them at a profit back home. Ingvar learned early on that you can sell things at a low price and still make a good profit. A philosophy that fueled the success of his next business venture, IKEA. Today on Cold Call , we welcome professors, Juan Alcacer, and Cynthia Montgomery to discuss their case entitled, “What IKEA Do We Want?” I’m your host, Brian Kenny, and you’re listening to Cold Call on the HBR Presents network. Juan Alcacer’s research focuses on the international strategies of firms in the telecommunications industry and Cynthia Montgomery studies the unique roles leaders play in developing and implementing strategy. They are both members of the Strategy unit at Harvard Business School. And thank you both for joining me today. It’s great to have you on the show.

CYNTHIA MONTGOMERY: Thanks Brian.

JUAN ALCACER: Thank you for having us.

BRIAN KENNY: You’re both here for the first time, so we’ll try and make it painless so we can get you to come back on. I think people are going to love hearing about IKEA and getting an inside view. Most of us have had that experience of being like mice in a maze. When you go into an IKEA store, you are compelled to walk through the whole place. It’s really brilliant, so many of the touches and things that they’ve done. And this case helps to shine a light, I think, on some of those decisions and how they were made. I had no idea how old the company was. So just starting with its history, it’s going to be good to hear about that. Juan, I want you to start, if you could, by telling us what would your cold call be to start this case in the classroom?

JUAN ALCACER: I like to start the case, bringing in the emotions of the students and their relationship with IKEA. So most of our students have had some experience with IKEA. So I’d just start asking how many of you have been in IKEA, and then I’d start asking why? Why did you go to IKEA? And this time telling you all the things that you just mentioned, for instance, walking through the maze, going to eat the meatballs. So they started bringing all these small, decisions that were made through the years, that made IKEA, IKEA.

BRIAN KENNY: Who doesn’t love the meatballs? Cynthia, let me ask you, you’re both in the Strategy unit at Harvard Business School, there’s a lot of strategy underlying this whole case. I’m curious as to what made you decide to look at IKEA and sort of, how does it relate to your scholarship and the things that you think about; the questions you try to answer?

CYNTHIA MONTGOMERY: I’m really interested in the choices firms make about who they will be and why they will matter? The core questions at the identity of a company. In 1976 Kamprad laid out very, very carefully. What IKEA would do, who it would be. He identified its product range. The customers it would serve, the company’s pricing policy, all in a document called, The Testament of a Furniture Dealer. And he described it as, “the essence of our work.” And 45 years later, it was still required reading for all of the IKEA’s employees. It’s probably the most compelling statement of corporate purpose I’ve ever seen.

BRIAN KENNY: Remarkable in a company that’s based on furniture. It was a very, sort of powerful thing. There’s an exhibit in the case that shows the whole Testament. Maybe we can dig a little bit into the history here. I alluded to the fact that it’s been around for a long time. Cynthia, just tell us a little bit about how the company came to be and how it evolved over time.

CYNTHIA MONTGOMERY: IKEA started actually as a mail-order business in Sweden and in the late 1940s Kamprad noticed that despite a lot of demand for furniture, agreements between the furniture manufacturers and retailers were keeping furniture prices real high. He was interested in a different set of customers. And he decided that to attract farmers and working class customers, he needed to be able to offer quality furniture at lower prices.

BRIAN KENNY: What were some of the early challenges that they faced. I’m also curious a little bit about the Swedish culture and how that sort of factors in here. Because there was definitely undertones of that factoring into the way they set this up.

CYNTHIA MONTGOMERY: It’s a virtue to be frugal and to be very careful about how you spend your money. And that made a huge impression, particularly given his background, growing up on a farm for Kamprad, he decided he really wanted to lower the prices of furniture and began to do so. And it turned out that there was a very, very strong response from other furniture manufacturers who basically said that they were going to boycott him. They wouldn’t allow him into their furniture fairs, him personally, as well as his company. And so in turn, what happened was that they also pressured local suppliers not to sell to a IKEA anymore, basically trying to force him out of the market. And what happened was that that actually drove Kamprad to Poland as a source of supply because local firms wouldn’t supply him anymore. And in the process, he discovered that Polish manufacturers could actually make furniture at far, far lower costs than Swedish manufacturers. And that essentially gave IKEA a cost structure that was more like a difference in kind, than a difference in degree. And that proved enormously important to building almost insurmountable competitive advantage for IKEA.

BRIAN KENNY: He was also really keen with innovations early on that things like the restaurant area and the childcare space, what were some of the insights that drove him to make those kinds of decisions?

CYNTHIA MONTGOMERY: One of the things that he decided quite early on is that he wanted to have the stores located out of town. And the reason is because land there was much, much cheaper. So he built these ,as you described earlier, Brian, these gigantic stores on the outskirts of town and they had lots and lots of square footage and lots and lots of merchandise, but you know, it took time to get there. It took time to shop there and what he wanted to do was make it worth it for the customers to make the trip, worth it for them to spend a lot of time in the stores. So he decided to add restaurants and the now famous meatballs, which come in several flavors, actually around the world, and to add childcare centers that would care for young children while the parents shopped. On the low cost front, he was innovative in other ways, he actually borrowed the idea of flat pack from another innovator, but he’s the one that actually brought it to life in such a big way. Then he discovered that if you let the clients go in and pick off the furniture packs themselves, they could even save more money and lower the costs in the store.

BRIAN KENNY: So they have a pretty complicated org structure, when we start to dig into some of the nuance of the case. Juan, could you describe for us, how they’re set up from an org structure standpoint?

JUAN ALCACER: You have to realize that coming from Sweden, which is one of the countries with the highest taxation for corporations in the world. So early on, they decided to find some organization structure and legal structure that would allow them to lower taxes. And that created basically an ownership based on foundations, based in the Netherlands. And they decided, early on, to separate the company into pieces. One is the franchise store, which is basically running the brand and running the management image of the brand. And then the operational part of the company, which is a franchisee. And for many years, those two things were separated. The franchisee was also in charge of manufacturing and so forth. So it was a very strange structure, that was put in place in part by the charisma and the leadership style of Ingvar Kamprad. If I can go back to your question about the Swedish culture. One of the things that, at least for me, is very striking is that when you look at multinationals, there’s a thing called the liability of being a foreigner, which means that when you go to another country, you have some disadvantages. And you try to mitigate that liability of being a foreigner, by pretending to be of that particular country. IKEA went with a totally different approach, they’re totally Swedish. Names of their products are impossible to pronounce. The fact that they have meatballs, they have their Swedish flags all over the place. They embrace the Swedish spirit as a part of the brand. You don’t see many multinationals with that. That makes IKEA what it is today.

BRIAN KENNY: I definitely think that’s part of the appeal here in the US, for sure, is people being exposed to the Swedish culture in a way they never had before. What is the culture of the company like, what’s it like to work there?

JUAN ALCACER: We went to both the Netherlands and to Sweden and we had a great time. It’s a very egalitarian culture. All the VP’s, high-level managers, none of them have an assistant. Only the CEO has an assistant. They don’t have offices, so everybody shares an open space. The whole place is decorated with IKEA furniture, everybody talks to each other by their first name. It’s very collegial, very friendly.

CYNTHIA MONTGOMERY: I would add to that. I think IKEA was incredibly generous to us, in the sense that they shared all kinds of confidential, internal documents and were really willing to talk in a very open and forthright way, about both their strengths and their challenges, which was incredibly refreshing. And as Juan said, that it was very egalitarian, and not surprisingly IKEA was one of the first companies to embrace democratic design. And that spirit was everywhere in the company.

BRIAN KENNY: Cynthia, what would you say are some of the keys to their success over the years?

CYNTHIA MONTGOMERY: I’d say that IKEA basically picked a lane and stuck with it. They had clarified, as I said at the top of the show, very, very carefully about what they wanted to do, who they wanted to be. And what they said is, look, this is what we’re going to be about. We’re going to offer an extensive range of practical, well-designed furnishings at low prices. And we’re going to serve the many, not the few. And the many are those with limited financial resources. When you have such clarity about what you want to do, then you can set out and try to maximize how you approach that. Essentially IKEA built a system, to do exactly that, extremely well and their distinctiveness made them truly an iconic firm. And it’s great when you talk with students about, what’s the purpose of your business?, What are you doing? What’s interesting is that oftentimes they can describe much more carefully what IKEA is doing, than what their own businesses doing. The last thing I would add, is that as Juan one said, they’re really synonymous with Sweden and they put that right out there. It’s almost like the way that Coca-Cola is synonymous with the US. And that has been a big part of their advantage.

BRIAN KENNY: Okay. So we’ve painted a very rosy picture for IKEA, but it’s an HBS case. So there’s tension, inevitably. So let’s dig in a little bit to where the case brings us. I’m going to mispronounce his name. I hope I don’t, but Torbjörn Lööf is that close?

CYNTHIA MONTGOMERY: Yeah.

BRIAN KENNY: He is the protagonist in the case. And he is stepping into a leadership role here really after an iconic leader has stepped back and that’s a challenge. Any time that happens, and a leader has to step in. And as he starts to sort of peek underneath the hood a little bit, he starts to see some of the challenges that IKEA is facing in this now seventh decade, I guess, of their existence. So Juan, maybe you can set that up for us a little bit.

JUAN ALCACER: It’s not only that he is stepping in the shadow of a leader that created the company. It’s that the company is still controlled by the family. So this is not a public firm, this is a private firm. So, he had to basically walk a very, very thin line, trying to take IKEA towards the future, but still preserving the past. And he had basically two main tasks, one is short term, that organization restructure that we were talking about, that was very complicated was created products. As I said before, the franchisee, which is basically the one that was running all the operations, was also the manufacturer. But there were other franchises. So for instance, the operations in Middle East are run by another company. So they wanted to create a system of transparency, that all the franchises are run the same way. When you have a franchisee that has basically represented 80% of your sales, and the ones that are representing 2% or 3%, there is an imbalance of power. So they tried to create a structure that is more managerial, that is more modern, that will allow to create incentives for new franchisees to come into the system. So that transaction was basically transferring production and transferring the functions that were in the franchisee back to the franchisor. There were 25,000 people that have to move from one place to another.

BRIAN KENNY: Wow.

JUAN ALCACER: They didn’t move physically, but in terms of the legal status they shift around. And the second is to bring IKEA to the world. What they observed is that there were some changes in demographics, they were targeting the low-income, what they call the thin wallets of the world, but it turned out that people that would go to IKEA are not thin wallets anymore. These people have already moved towards the middle-class and they also have this whole, to increase the number of consumers to three billion, and that meant that they have to basically grow globally, at a rate that they have never done, before they had two or three markets, like China and India. They also have the issue of eCommerce, to pick up and every retailer in the world is dealing with that. So, it’s two steps. One, getting the house in order, and second one, creating a path for the future for IKEA to become an icon for the next 75 years.

BRIAN KENNY: Yeah. And I also think at some level it’s hard to sustain that original mission that they set out with, when you’re trying to expand so rapidly and bring in a much larger audience. Cynthia, I don’t know if you have other observations about these changes they were facing.

CYNTHIA MONTGOMERY: Absolutely. Because one thing is that you can look at the challenges that came from expanding into new geographies. But the other thing that they found in a large study that they did, is that there were challenges in their core business as well, that the countries they’d been in for a number of years, and what I’ll call the big blue box stores, mostly in developed countries. What they found is that increasingly many of their customers in those markets wanted new conveniences. They wanted stores that were located closer to city centers because a number of people say in their late twenties, early thirties are not driving and don’t have cars. And they found that there was an increasing demand for delivery and assembly services for shopping online. These trends are worrying to a huge number of retailers, but particularly a challenge to IKEA because low price, low, low price, so low that that people can recognize the difference. That being at the heart of their strategy. And customers’ willingness to spend time getting to the store, hauling furniture about, ultimately assembling it. Those are at the very, very heart of their low-cost strategy and their very distinctive value proposition. It was a big challenge within the developed markets as well.

BRIAN KENNY: And depending on where they went in the world, a different set of challenges pops up almost everywhere. Juan, you mentioned earlier that they pushed back against localization, but is that a sustainable strategy? When you’re trying to go into entirely new markets like China and India.

JUAN ALCACER: The beauty of IKEA is that they found a segment across different cultures that was very similar. College students the United States, that needed to have furniture for a few years only, it could be young couples that are opening a new house, in some places it’s immigrants that are moving from one country to another country that need to buy furniture, but they don’t have the money to do so. So there was this very common segment across the world that they were able to then define, that allows them to have basically 80% of their line, of their range, is common across countries. And they have around 10% to 20% that varies by country. Now, when they go to China, and they go to India, they find that the changes have to be of a higher scale for three reasons. One, the tastes are different, also the materials, when you are going to India and you are going to houses that are in a high humidity environment, the type of wood that you can use is different. Now you start, not only changing the look of the product but you also have to change how you made it. And the third big challenge is when you look at what is defined as thin wallet, in these markets, is really thin. It’s not thin wallet in Sweden, it’s not thin wallet in the United States. So, you have to go to prices that are really, really low. And that means that you are already a low cost producer but you have to go even lower. That means that you have to change your supplier, so it starts changing the fundamental parts of the business model that they created through the years.

BRIAN KENNY: And it could probably, pretty easily, get away from you. So this does call for a strategy. Cynthia, can you describe for us what the three roads forward are? This was sort of underpinned their strategy going forward and how they were going to deal with some of these challenges.

CYNTHIA MONTGOMERY: Basically, the three roads, the first was affordability, as Juan said, this isn’t affordability in the way that they, at the level at which they’ve traditionally thought about it. This is affordability for wallets that are either very thin or actually where the willingness to pay just isn’t as high, because they’re accustomed to having goods that are at very low prices. So they wanted to attack affordability for people who could not afford IKEA today. They cared a lot about accessibility. They’ve got to reach and interact with people where they are. And the last is sustainability, and they felt really, really strongly about this. And I think much in line with what you see with a number of other countries in Europe, that they cared a lot about the sustainability of the products and wanted to make a positive impact for people, society and the planet. And they’re taking on all three of these aspirations at once.

BRIAN KENNY: You have written many cases, I’m sure that parallel this, what are some other firms that have faced similar challenges and maybe figured out a way to deal with the same sets of challenges?

JUAN ALCACER: The challenge of going overseas, we didn’t write cases about multinationals for many years. They always have this tension between coordination in headquarters and adaptability in each one of the subsidiaries. So IKEA was very good at playing that game for many, many years. In a way they were going to countries that were somehow similar to Sweden. Now that they are venturing to countries that are farther away in many dimensions, not only physically, but also in terms of economic distribution, in terms of taste. They are seeing this tension to be amplified. We have seen that in many companies, Procter and Gamble has been doing that for years and years, Unilever has been doing that for years and years. IKEA has done it for 75 years. They went overseas very early on. But now the challenge is a little bit higher. The other challenge is that Cynthia also mentioned, which is basically adapting to new technologies and new demographics. Every retailer is facing that. Any supermarket, any chain that has been selling in brick and mortar is facing those challenges. So, what is interesting about IKEA is that they are facing these all at the same time and they’re facing this during the process of transition from the leader that created the company to a new set of managers that are more professional and are not part of the family.

BRIAN KENNY: You mentioned technology. I’m just curious, the role that the internet plays in this, because now everybody can see, you know, through YouTube and other things, what the experience is like from one place to the other, and how important is consistency across all those geographies, versus a little bit of localization to make it feel a little bit more like this is the China version of IKEA versus the European version of IKEA. Cynthia, do you have thoughts on that?

CYNTHIA MONTGOMERY: That’s the real challenge here in the sense that, how do you take this whole model that has been developed over so many years? And it’s very, very hard to imitate, which has given them a lot of strength over the years, but when the environment changes, instead of responding in a piecemeal way to all kinds of external stimuli, it’s how do you take this whole model and evolve it in some coherent way that stays true to the iconic sense of who IKEA is? I really see it fundamentally, as an existential question for IKEA.

BRIAN KENNY: Such a great point. Look, I want to thank both of you. This has been a really interesting discussion about a brand that we all know and have experienced many times firsthand. I have one more question for each of you before we part ways. And that would be if there’s one thing you want people to take away from this case, what would it be? Juan, let’s start with you.

JUAN ALCACER: What I would like listeners to take from this, is we have this mentality of growth, growth, growth, and expanding and doing different things, and when you look at IKEA, you have to wonder, is it better that IKEA stays doing what they do well, or do they have to keep growing and entering all these markets and adapt to overseas. We have this basic assumption that growth at any cost should be the goal. I would like the listeners, when they look at the case and think about the cases, to question that very basic assumption.

BRIAN KENNY: Cynthia?

CYNTHIA MONTGOMERY: One of the things about IKEA that I think it’s really, really important to know is that they really brought something different to the world and they did it in a very compelling way. So at the heart, to do something that’s distinctive, that adds value. It comes through really strong in the IKEA story. At the same time, when the environment changes, how do you evolve, is really challenging. And so the fact that they’re being so open in how they’re confronting this, I think there’s a lot to learn there. It’s a challenge. I think it’s really important to remember what’s at the heart of this company, is that they’re really bringing something that’s very unique and they need to continue to do that.

BRIAN KENNY: Juan Alcacer, Cynthia Montgomery, thank you so much for joining me. The case is called, “What IKEA do we want?” Thanks again.

JUAN ALCACER: Thank you.

HANNAH BATES: You just heard Harvard Business School professors Juan Alcacer and Cynthia Montgomery in conversation with Brian Kenny on Cold Call .  We’ll be back next Wednesday with another hand-picked conversation about business strategy from the Harvard Business Review. If you found this episode helpful, share it with your friends and colleagues, and follow our show on Apple Podcasts, Spotify, or wherever you get your podcasts. While you’re there, be sure to leave us a review. We’re a production of the Harvard Business Review. If you want more podcasts, articles, case studies, books, and videos like this, find it all at HBR dot org. This episode was produced by Anne Saini, and me, Hannah Bates. Ian Fox is our editor. Special thanks to Maureen Hoch, Adi Ignatius, Karen Player, Ramsey Khabbaz, Nicole Smith, Anne Bartholomew, and you – our listener. See you next week.

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IKEA Case Study: IKEA’s Genius Business Strategy

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Are you looking for an IKEA case study according to Michael Porter’s Five Forces?

Porter’s IKEA case study shows one company’s success in fitting together business activities, business strategy, and operations. His analysis shows how the activities connect to create a uniquely competitive business.

IKEA’s Fit Between Activities

Good strategies depend on the connection among many things. Fit means the value or cost of one activity is affected by the way other activities are performed – in other words, “synergy.” If the activities fit together, they each meaningfully contribute to the company’s increased value or lower cost, and they work strongly together. The IKEA case analysis below is one example of fit between different activities.

This is a clear departure from the (mistaken) idea of the one core competence. If strategy truly is based on one core competence, then it becomes relatively easy to replicate. More often, industries compete fiercely to control the one key “resource” – distribution channels, product portfolios – thus driving up cost. In reality, strong strategies are built on many unique activities that fit together to deliver the unique value proposition. Later, you’ll see how fit works well in the IKEA case study, despite certain trade-offs.

Fit arises in 3 ways . Keep this in mind when you read the IKEA case analysis:

  • Example: many of Southwest’s activities are directionally pointed toward lowering cost and increasing convenience.
  • When activities are inconsistent, they cancel each other out.
  • Netflix’s large catalogue gives more chances to collect data points to make better recommendations.
  • IKEA’s room displays substitute for sales associates, thus lowering cost.
  • Dell will preload software onto PCs, substituting for the customer’s IT department.

Fit discourages rivals in a few ways:

  • With a large range of activities, it becomes unclear which of the company’s activities are most valuable to replicate.
  • As a simplistic example, say there are 5 activities that give a company a competitive advantage. If the chance of replicating one activity is 90%, then the chance of replicating all of them is 0.9^5, or 62%.
  • An activity that fits one value chain can punish a different value chain, if it lacks synergies with the other activities or contradicts them.
  • Activities with fit make it easier to see where the weak link in the chain is (think about this in the IKEA case analysis later).

The IKEA Case Study

Let’s examine a masterpiece of strategy in IKEA using the IKEA case study analysis. Their mission is to deliver stylish furniture at low prices. Their activities show clear trade-offs and strong fit:

  • Assembling furniture yourself also seems to increase your enjoyment of it, maybe because of endowment effect. 
  • Compact boxes reduce freight shipping costs from the manufacturer.
  • This means time from buying to having furniture in your house is much faster than shipped furniture.
  • IKEA stores are huge warehouses in large suburban locations with highway access. With large parking lots and loading zones, they allow customers to self-service and deliver their own furniture.
  • IKEA showrooms have minimal staff, with the entire inventory laid out for buyers to peruse.
  • IKEA cafeterias are self-service and customers are encouraged to bus their own trays.
  • IKEA designs its own products, allowing trade-offs in styling and cost.
  • Furniture has few customization options, allowing production in bulk and bargaining at scale.
  • A narrower catalogue also allows IKEA to keep its warehouses fully stocked, instead of requiring shipping.

Many of these activities fit together and reinforce each other to provide low-priced furniture. The furniture’s self-assembled design reduces manufacturing costs, storage costs, shipping costs from manufacturer, and shipping costs to customers. In turn, IKEA’s locations make the furniture’s self-assembled design even more effective. 

Note how each activity is distinctly a trade-off : you either have furniture disassembled or not. You either have salespeople on the showroom floor or not. This is one of the aspects covered in the IKEA case study analysis.

Many traditional furniture retailers practice the inverse of IKEA’s value chain. If they tried to adopt one of IKEA’s activities, they’d find it less compatible with their own value chain, and so they’d gain very little of IKEA’s competitive advantage.

Note too that, in making these tradeoffs, IKEA is deliberately alienating customer groups – those who want furniture ordered seamlessly to their homes, who want nice salespeople to guide them through options, who want unique and fancifully designed furniture. The IKEA case study analysis shows how trade-offs can sometimes have big strategic payoffs.

Activity System Map

To visualize the strength of fit between activities, place the activities on a map.

  • Start by placing the key components of the value proposition.
  • Make a list of the activities most responsible for competitive advantage
  • Add each activity to the map. Draw lines wherever there is fit: when the activity contributes to value proposition, or when two activities affect each other

Here’s an example for IKEA:

ikea case study solution

A densely interconnected activity map is a good sign. A sparsely connected map shows weak strategy.

The activity map isn’t useful just for description of your current strategy. It can also be used for ideation for new strategies:

  • Can you improve fit between activities? 
  • Can you find ways for an activity to substitute for another?
  • Can you find new activities or enhancements to what you already do?
  • Are there new products or features you can offer because of your activity map, that rivals will find difficult to emulate?

Porter’s IKEA case study is an example of a competitive business in a particular area of an industry. Porter’s IKEA case study shows business activities and strategy intersecting successfully.

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  • ← 5 Simple Steps: How to Do an Industry Analysis
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IKEA Harvard Case Solution & Analysis

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ikea case study solution

INTRODUCTION

The Ingvar Kamprad established IKEA in the year 1943. At its starting stage, the company was selling the catalog of household goods given the discount on it. Later on in the year 1947, Kamprad started to sell the furnishing goods and after six years of selling, furnishing, goods Kamprad opened its first showroom. Afterwards, IKEA started to sell its own designed furniture and charge lower prices from customers.

In 1958, IKEA opened its largest store in Almhult, Sweden and it was the largest store in all of Scandinavia.  Furthermore, IKEA opened its flagship store in the year 1965 in Stockholm and that flagship store became the prototype for all the retail outlets of IKEA.

IKEA become the prominent retail store in the world and this position was achieved by the year 2002. The brand of IKEA was one of the renowned brands, it creates value for the IKEA, and it was operating in 22 countries with the 154-retail stores in those countries. In the year 1985, IKEA opened its first retail store in America and it reached to 14 stores by the year 2002. However, IKEA wanted to establish 50 stores in America before 2013.

To identify that how IKEA would create the value for its customers, there is a need to analyze the IKEA’s value creation in terms of SWOT analysis.

SWOT Analysis:

IKEA’s cost effective business model is a key strength as IKEA is producing the furniture at lower cost and selling those furniture at lower prices that attract the price sensitive customers. IKEA’s distribution channel is very strong and it builds strong relationships with its suppliers and its customers.

IKEA’s product designs are modern and it provides the smooth packaging. Its brand image is strong as its stores are unique and provides all kinds of services regarding furniture. It provides a variety of products that made IKEA one stop shopping store.

Weaknesses:

IKEA is a Swedish company that is different from the American companies and customers preferred to purchase from American furniture stores. It has the difficulty to identify the Americans preferences regarding the furniture. IKEA offered product with the limited style and it provides unassembled furniture products, which is not the preferred product of America’s furniture customers.

IKEA stores are operating with the self-service environment that reduces the salespersons existence in the store for guiding the customers. On the other hand, Americans wanted to purchase from the sales person. IKEA did not provide delivery services to its customers. Durability of furniture is lower as IKEA focused on a cost leadership strategy to produce furniture.

Opportunity:

IKEA has the opportunity to target the price sensitive market such as students and middle upper class, this market segment is technology savvy customers, and they wanted to use furniture that could easily be used and move as well. IKEA has the opportunity to expand its operation into emerging markets such as Asia.

IKEA has the threat in terms of competition from the low-end furniture retail stores such as Wall mart, Costco, as these stores are widely existing in the American furniture market. High-end furniture retail stores such as specialty stores are also the threat for the IKEA. IKEA would also expose to the risks that, different companies could adapt its business model. American customers are not willing to change easily and adopt the new culture where furniture is not considered to have the lifetime durability rather it has the lowest price.

PROBLEM STATEMENT:

The problem of the IKEA was to enter into the American furniture market where the market was distributed into different segments and customers were reluctant to buy new furniture, as they preferred the furniture those have more life. Further challenges those are identified are that Customers are reluctant to change, and How to create value for the customers.

Customers of the American furniture market had the mindset that furniture must be purchased one time and it would last for a lifetime. This mindset was not aligned with the IKEA, as their products were durable products. IKEA must change the mindset of American customers regarding the purchase of furniture in order to increase its market share.

On the other hand, American customers of furniture had the preferences that furniture must be delivered for free of cost and this was creating the problem for IKEA as free of cost delivery was not the motto of IKEA. On the other hand, IKEA’s motto was to produce furniture at lower cost and customers should purchase the furniture and take it to home on their own..................

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​Christopher A. Bartlett; Vincent Dessain; Anders Sjoman Harvard Business Review ( 906414-PDF-ENG ) May 03, 2006

Case questions answered:

Case study questions answered in the first solution:

  • How should Barner deal with the child labor issue in relation to its sourcing activities in India? For example, should the company continue to source their rugs from India, or should they leave? If they decide to stay in India, should they deal with the child labor issue through their own suppliers or allow Rugmark to monitor the issue on their behalf? Or is there another option, and if so, what? Answer these questions as though you are a member of an internal project team that is directly assisting Barner.
  • State the key problems that Barner has to address in relation to IKEA’s sourcing activities in India.
  • Evaluate possible, mutually exclusive options in solving the key problems.
  • Justify why your suggested option is the best possible option.
  • Propose a brief implementation plan that outlines what actions should be prioritized and why.

Case study questions answered in the second solution:

  • Should the company continue to try to deal with the issue through its own relationships with its suppliers?
  • Should it step back and allow Rugmark to monitor the use of child labor on its behalf?
  • Or should it recognize that the problem was too deeply embedded in the culture of these countries for it to have any real impact and simply withdraw?

Not the questions you were looking for? Submit your own questions & get answers .

IKEA's Global Sourcing Challenge: Indian Rugs and Child Labor (A) Case Answers

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EXECUTIVE SUMMARY – IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor (A)

This report is based on the Indian Rugs and Child Labour issues faced by IKEA. In this report, the Project Management Team will analyze the major issues faced by the company in relation to the involvement of its suppliers in child labor.

This report will evaluate whether IKEA should stay and source rugs from Indian suppliers. Simultaneously, it would deal with the child labor issues independently, rely on the Rugmark monitoring program, or leave the Indian market entirely. Additionally, it would also tackle whether IKEA should continue its partnership with Rangan Exports.

The report will, thus, directly assist the Business Area Manager, Marianne Barner, by outlining and evaluating the key issue of Child Labour in the Indian Rug market, analyzing potential solutions, and providing recommendations and a strategy to move forward.

The report will commence by identifying the underlying issues such as outsourcing, child labor, and negative publicity, followed by an evaluation of various options, as a result of which staying in India by forming a partnership with the Rugmark Foundation and incorporating certain initiatives on its own to mitigate the issues is recommended as the best course of action.

The report develops further by providing recommendations that could be used now or back in 1990, such as terminating its contract with Rangan exports, conducting surprise inspections, forming a new policy framework, and so on to help IKEA follow up on its decision to stay in the Indian market and later presenting an implementation plan to facilitate the process with well-defined short-term and long-term action plan.

INTRODUCTION

As the world’s largest furniture retailer, IKEA serves more than 1.6 billion people and employs more than 194,000 people across 49 countries (“IKEA 2017 by numbers”, 2018).

The Swedish company IKEA was founded in 1943 by Ingvar Kamprad with a vision to create a better life for many people. Therefore, the aim of the company is to provide affordable and inexpensive well-designed furniture to people while incurring the least possible costs.

Along with a few external factors, this cost-conscious objective of IKEA paved the way for outsourcing from international suppliers. IKEA aims to build long-term relationships. As a result, it invested in teaching its processes and know-how as well as providing machinery to its suppliers.

In the 1980s, IKEA was accused of having exceeded the limits for formaldehyde emissions. Although IKEA took quick measures to mitigate the issue, the damage was done.

In 1994, IKEA was again in the middle of a storm when the issue of child labor used by its suppliers in countries like India, Nepal, and Pakistan was brought to light by a Swedish Documentary. Due to the documentary’s emphasis and IKEA’s brand name, the corporate image of the company was further affected immensely.

Although the company actively took steps to alleviate the issues by creating contracts to prohibit child labor, a documentary was already in the process of broadcasting IKEA’s supplier’s – Rangan Exports – involvement in child labor.

SWOT ANALYSIS

IKEA, being a multinational company, has several notable qualities as well as weaknesses.

The following SWOT analysis will evaluate them:

IKEA SWOT Analysis

The SWOT analysis shows that IKEA has a very…

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  • Harvard Business School →
  • Faculty & Research →
  • March 2016 (Revised January 2017)
  • HBS Case Collection
  • Format: Print
  • | Language: English
  • | Pages: 16

About The Author

ikea case study solution

Eric J. Van den Steen

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  • IKEA  By: Eric Van den Steen and Alon Galor

Table of Contents

Ikea target audience, ikea marketing channels, ikea marketing strategy, ikea marketing strategy 2024: a case study.

Ikea Marketing Strategy 2024: A Case Study

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Ikea serves the unique functional needs of each target audience, with special attention to 16-34-year-old adults. It has solutions for:

  • Single people not living at home
  • Newly married couples
  • Families with the youngest child under six
  • Older married couples with dependent children
  • No children families
  • Labor force
  • Professionals 

Thus, it uses the following types of product positioning :

  • Mono-segment positioning. It appeals to the needs and wants of a single customer segment that is cost-conscious and prefers value for money.
  • Adaptive positioning. It believes in periodically repositioning products and services to adapt to changes in customer preferences. Its Swedish furniture chain considers the dynamic nature of customer preferences. For instance, its latest products reflect increasing minimalism on the global scale. 

Ikea utilizes the power of the following marketing channels: 

  • Mobile Application
  • WebEngage: Email, SMS, and Whatsapp Marketing
  • Social Media
  • Telecalling
  • Commercials

The Ikea marketing strategy contributes majorly to its success because it's original, imaginative, and distinctive while maintaining a transparent value proposition.

A Creative, Consistent Brand Theme

From the Swedish national colors on its buildings to rich meatballs in its store cafeterias, Ikea's marketing strategy reflects its cultural heritage proudly. It infuses all elements of their identity with a sense of self-assuredness that maintains their identity in the market of stiff competition. 

Emphasizing Affordability and Sustainability 

Understanding that a simple tiered strategy won't encourage repeat business, Ikea extends customization, flexibility, and mix-and-match furniture modules. It effectively combines the elements of affordability and sustainability in its marketing strategy to ensure success.

While the furniture options don't pledge a lifelong guarantee, the products are built to last. Even its reusable shopping bags reflect its commitment to sustainability.

Sponsorship and Influencers 

IKEA-sponsored comedic series Easy to Assemble. Its innovative content marketing was way different from a furniture product demo. Incorporating sponsored digital marketing campaigns and social media influencers have boosted the Ikea marketing strategy. 

Ikea_CS_1

Ikea’s Easy to Assemble Series

Exceptional In-store Experience

Ikea brilliantly displays products employing the best lighting systems to generate more sales. It strategically arranges best-matched items in mock rooms to encourage impulse purchases and inspire decor. The company also extends excellent customer service to provide a memorable experience and incite customers to come back for more.

Ikea_CS_2

Ikea’s Store Decor for Inspiration

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Website and Mobile Application Marketing

Ikea ensures an optimal mobile website's speed, button displays and gesture controls on its website and mobile app to retain and attract individuals to the site. It carefully invests in its UI/UX , enquiry-based chatbot, and regular updates on new offers, discounts, and promotions. 

One of the most successful marketing moves includes downloading its 3D modeling app to envision a dream home. It's one of its most successful marketing moves that allows IKEA to upsell its low-demand items by creating a desire in its customers to revamp the room.

Ikea_CS_3.

Ikea’s Website With Engaging Content

Ikea's SEO (Search Engine Optimization)

Ikea's marketing strategy aims at enhancing the site's visibility for relevant searches to attract the attention of new and existing customers. It includes the right product-specific keywords and Google advertisements to further augment its organic ranking .  

Ikea_CS_4.

Ikea Ranking for Bookcases on Google’s First Page

Ikea's SMM (Social Media Marketing)

Ikea's handles are very active on digital marketing platforms like Facebook, Instagram , Twitter, and Youtube . Their digital presence is impressive, with more than 30 Million likes on Facebook, 1 Million followers on Instagram, 5.3k followers on Twitter, and 41.2k subscribers on YouTube.

Ikea_CS_5

Ikea’s Instagram Profile

Its Instagram bio links to its website. The website also has links to its various social media posts. Its 'view shop' and 'call' options for product catalog and direct assistance, respectively, are a testament to a well-crafted Ikea marketing strategy.   

Ikea_CS_6.

Ikea’s Youtube Advertisements 

IKEA also conducts free online workshops that lure lots of enthusiastic customers, resulting in gaining leads.

Ikea_CS_7

Ikea’s Online Workshop Ad

Content Marketing

Ikea relies on its content marketing strategy to create a distinguished presence amongst furniture brands. Its commercials, print ads, social media, and website stands out with attention-grabbing content. It combines innovation and humor to present the brand's core values and inspire people. 

ikea_CS_8

Ikea’s Captivating Commercial 

Ikea Marketing Strategy bears testimony to a well-thought and structured marketing venture. Sign-up for our Digital Marketing Specialist and learn more about marketing case studies published by Harvard Business. You will be taught by experts from facebook and Purdue University. Sign-up for the course TODAY!

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IKEA Case Study| History of IKEA| IKEA Business Model

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August 31, 2019

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Ikea Case Study- (Business Model)

2 Minute Summary

IKEA is one of the biggest furniture companies in the world founded by a carpenter named Ingvar Kamprad who was 17-year-old, in Sweden in 1943. Everybody knows that Ikea offers the products at a very lower price than any retail shop. Ikea has invested 800 crores in India, It has more than 9500 Products and has more than 350 stores in 35 countries. the new store is spread across 400,000 square feet in the southern city of Hyderabad & plans to invest 105 billion rupees in India. the company is a non-profit. IKEA employs about 135,000 people. Because of tax rules for non-profits, IKEA pays about 33 times fewer taxes than their for-profit competitors. The Ikea trademark and the concept is owned by another private company named Inter Ikea Systems. It acquired TaskRabbit on Sep 28, 2017. IKEA has many mobile apps. But the most popular app is IKEA STORE. The app is having almost 9,60,333 monthly downloads. IKEA is the lead investor in 4 companies. Full Detail in Blog.

Everybody knows that Ikea offers the products at a very lower price than any retail shop.

In this blog, we’ll talk about Ikea Case Study(Business Model) as the Swedish furniture company opened its first retail store in India.

Like Walmart acquired Flipkart and entered the Indian Market. Ikea can destroy the Whole Furniture Market in India.

Ikea has invested 800 crores in India, It has more than 9500 Products and has more than 350 stores in 35 countries.

According to CNN , the new store is spread across 400,000 square feet in the southern city of Hyderabad & plans to invest 105 billion rupees in India.

But have you ever wondered? How does Ikea work?

What is the meaning of IKEA?

How IKEA works?

How IKEA business model earns ?

You must have many questions regarding IKEA, like What is the meaning of IKEA?

What is IKEA?

How IKEA earns?

This will be the most detailed case study on IKEA.

I will be answering all of your questions.

Let’s START WITH

WHAT IS IKEA?

IKEA is one of the biggest furniture companies in the world founded by a carpenter named Ingvar Kamprad who was 17-year-old, in Sweden in 1943.

IKEA is a globally renowned furniture retailer that sells ready-to-assemble furniture, kitchenware and home accessories.

 The company started with selling pens, wallets, jewellery with the concept of meeting consumers demands at the most affordable prices.

After five years into the business, IKEA brought in the furniture. Since then furniture has been the mainstream for the business.

IKEA furniture is now a well-known multinational brand.

IKEA MEANING

You must be wondering that what is the story behind the unique name the brand has.

The name IKEA isn’t just a fun.. it stands for – Ingvar Kamprad Elmtaryd Agunnaryd.

Short-form is cooler to pronounce right? But it actually has a deeper meaning.

The first two letters of IKEA i.e. I and K are the initials of the name of the founder Ingvar Kamprad.

While ‘E’ comes from the name of the farm he grew up on – Elmtaryd.

And the last letter ‘A’ comes from the Swedish village, Agunnaryd,

where the farm was located.

HOW IKEA EARNS? – IKEA BUSINESS MODEL

They follow Price-leadership model. Low prices are the main concern stone of the IKEA vision, business idea and concept.

In the world of IKEA furnishings, the products are named after Swedish towns like Aneboda, Akurum and Anordna.

But the costumers worry less about the names and care more about how much they cost.

Ikea furniture is a beacon for bargain hunters. Its whole business model evolves around selling their product at the lowest price possible.

IKEA business model revolves around their vision which is – offering a very wide range of well-designed, functional home furnishing products at so low prices that as many people as possible will be able to afford them.

Anybody can make a high-quality product for a high price, or a poor-quality product for a low price.

IKEA follows a different approach, they have developed methods that are both cost-efficient and innovative. Before designing the product… they decide the price tag.

Their designers begin with designing of the product after keeping the price in mind. The IKEA Group has 31 distribution centres in 16 different countries, supplying goods to IKEA stores. It has about 45 trading service offices in 31 countries.

They have very close relationships with their 1,350 suppliers in 50 countries.

IKEA’S SMART SECRET

Is IKEA – a Non- profit organization. ?

You must be having a lot of questions by now, like if IKEA is a non

profit organization then –

How do they manage their running cost?

Where all the money goes away?

Where does all this money earned is utilised?

You will get all your answer right away as you continue reading.

I would say a big YES,

IKEA has a little known secret: the company is a non-profit

They grew with a vision that states ‘to create a better everyday life for as many people as possible. And on a mission to offer a wide range of home furnishing products at a price so low that as many people will be able to afford them.’

Besides the vision and mission, the main motive of showing itself a non profit organization could seem as business-driven.

IKEA employs about 135,000 people. Because of tax rules for non- profits, IKEA pays about 33 times fewer taxes than their for-profit competitors.

There is one more big hole in this whole IKEA non-profit organization.

Money is not trapped inside Ikea’s foundation.

The Ikea trademark and the concept is owned by another private a company named Inter Ikea Systems.

So, to operate Ikea stores and use the brand name, the non-profit Ikea have to make payments each year to the private company – Inter Ikea Systems.

This clearly means money is paid directly from IKEA profits to the owners of this private company to license the trademark.

The beneficiaries or we can say owners of this private company are not publicly recorded, but it’s not hard to speculate that the Kamprad family is on the receiving end of this loophole.

HISTORY – STARTING AND GROWTH OF IKEA

Let’s talk about the exciting history timeline of IKEA.

From the of how it is started to the story of how it evolved exponentially.

It all started in 1926 when founder Ingvar Kamprad is born in Småland

in southern Sweden.

The 1940s-1950s

In the year 1948 – Furniture was introduced into the IKEA range.

Local manufacturers produced the furniture for IKEA in the forests close

to Ingvar Kamprad's home.

In the year 1956 – IKEA came up with the idea of designing furniture for

flat packs. It started focusing on self-assembling furniture models.

In the year 1980s – IKEA expands dramatically into new markets such

as the USA, Italy, France and the UK.

In the year 1984,

Ikea family was introduced a new club for the customers was launched.

Today, Ikea family is in 16 countries (over 167 stores) and has about 15

million members.

FINANCIAL FACTS AND FIGURES

Categories – Consumer Electronics, Furniture, Retail, Shopping, Smart Home.

Headquarters –   European Union (EU)

Founded Date –   1943

Founders – Ingvar Kamprad

No. of Employees – 10001 +

Legal Name –  IKEA BV

Digital links

Website –  www.ikea.com/

Facebook- www.facebook.com/IKEAIndia

LinkedIn – www.linkedin.com/company/ikea-group/

Twitter – https://twitter.com/IKEAUSA

Till now IKEA has only 1 acquisition.

It acquired  TaskRabbit  on Sep 28, 2017

Mobile app and its downloads

IKEA has many mobile apps. But the most popular app is IKEA STORE.

The app is having almost 9,60,333 monthly downloads.

Website and its monthly traffic IKEA is ranked 166 among websites globally.

And having almost 146,040,680 monthly visitors.

Investments

IKEA is the lead investor in 4 companies. Those are –

XL HYBRIDS – IKEA announced its investment in this company on

October 12, 2017

MAT SMART – IKEA announced its investment in Massmart on Jan

TRAEMAND – IKEA announced its investment in Traemand on Dec

LIVSPACE – IKEA announced its investment in Livspace on Dec 19,

MANAGEMENT AND THE CORE TEAM

CEO – Jesper Brodin

CFO – Alistair Davidson

FOUNDER – Ingvar Kamprad

HEAD OF CORPORATE FINANCE & TAX – Krister Mattsson

HEAD OF DIGITAL – Christian Moehring

HEAD OF E-COMMERCE, SOUTHEAST ASIA – Koen Besteman

HEAD OF UK MARKETING PROCUREMENT – Maria Malpartida

HEAD OF INNOVATION – Jens Heitland

8 IKEA Marketing Strategy

Many people confuse marketing with promotion. People believe that marketing is something you do to sell your product. But, this is not completely true. Marketing begins even before the production stage, as designing a product based on the demand and needs of the customers is also a part of marketing. This is what IKEA Believes in. Everything in IKEA is from a customer’s point of view. Let’s dive deep into learning different strategies of IKEA.

1. Amazing Customer Experience

Have you tried shopping from IKEA? If not, then I would strongly recommend you to try IKEA next time you need a piece of furniture.SHopping at an IKEA store is a different experience than shopping from any other furniture store. Whenever adults go out shopping with their kids, both the kids and parents face issues.

IKEA has got an amazing solution for this where none of them would feel any type of burden and in fact, both of them would like to spend more time at the IKEA store. Yes, I am talking about the free childcare facility provided by the IKEA stores. You can just leave your child safely with them and enjoy hustle free shopping and the child will also spend some quality time playing and making new friends.

Another amazing thing is that instead of standing and having a long discussion about which product to buy and calculating your cost, you can have a seat ad enjoy your paneer butter masala meal while discussing the furniture.

These little things not only add a value to the customers shopping experience but also give them a reason to visit again and even suggest others to visit the store.

2. Brand Identity

In such a competitive environment, is it very important to stand out or be unique and creative to survive? You have to build your brand in such a way that customers prefer you over other companies.IKEA is very strongly working with this. Its goal is to become the leader of every home.

IKEA focuses more on the product and the customers which a lot of companies fail to do. If you create what your customers want then you can build a good brand identity. Your every action should be a signal of your brand.IKEA uses this technique in its advertising. If you have been following IKEA for a while then you will not have to think a lot you can recognise directly that this is an IKEA ad.

3. Content Marketing

With the growing digital environment, the content has become an important element of the digital industry. Content is used by most of the companies to promote their product digitally. From a picture art to a long written blog anything can be used as content in digital marketing.

One of the best strategies you can use in this digital era is to interact with your customers directly.IKEA uses all types of contents to reach out to their customers. From images, videos to textual content IKEA has it all. To reach your customers digitally, it is very important to identify your potential audience, basically defining who your customers are. Then the most important step is defining how your potential customers can find you?IS is through your social media handles or is it through your website or a combination of all these. And then you need to target them both organically and by paid promotion techniques.

4. Social Media

Social media is something which cannot be avoided. Everyone nowadays uses social media, thanks to the internet revolution and jio revolution in India. Your presence on every social media platform is must, it doesn’t matter if you are an old company or a new one. Social media allows you to be in constant touch with your customers. You can use various strategies across your social media platforms that can help you create trust and a good brand image in front of your customers and also develop new customers.

There are a few strategies which you can follow.

  • If you follow a consistent posting schedule, then you can have a good content interaction as regular posts can make your customers think about you.
  • You can also use promotional strategies provided by social media companies to reach a new audience and attract them by telling them about your new products and offers.
  • Another important feature of social media that you can use is to understand your audience. Understanding your audience is important because they are the ultimate consumers and having clarity about the consumers makes it possible for a brand to plan its products and marketing accordingly.

5. Innovation

IKEA is very famous for new designs and products. It keeps on constantly adding a new design or a new to product to its collection. This allows customers to visit the store even if they do not want to buy anything so that they can check the latest trends and products. If you check their social media handles, you will find a lot of different types of content that displays new and innovative products. This is a very good strategy as your customers stay updated with your products. Even if they do not add the products to their cark at the moment, they still add it to their wishlist. Which indirectly gets converted into sales. Thus, innovation in products and making innovation reach your customers is very important.

6. Creative Marketing Campaigns

IKEA is very creative when it comes to marketing. Their posts are so engaging that you want to click on it and see them that what is there. The example given below demonstrates how one will swipe right to see what they have for you. Isn’t it creative? If you observe, they have made good use of the present condition in a creative way. Similarly, a humorous and creative content strategy can help you get more engagements.

7. Amazing Use of Technology

Living in the 21st century, you can make amazing use of technology to provide a great experience to your customers. Augmented reality and virtual reality are some great examples of technology can you can use especially in such industries.IKEA makes use of both these augmented realities and the virtual reality

What is Augmented Reality?

This is the most amazing use of technology that IKEA could have done. With this, you can use your mobile phone to see how a piece of particular furniture would look at your home. You can also use this to decide at which corner of the house that particular furniture would look good. This is like a trial technology where you can try the products virtually at the comfort of your home without actually buying it. It is similar to something used by Lenskart.

What is Virtual Reality?

Yet another amazing use of technology. Where most of the people are busy using virtual reality for gaming purposes, IKEA has its smart use. Through virtual reality technology, IKEA allows its customers to feel the look of the furniture. For example, say you want to buy a modular kitchen, you can try the kitchen before actually buying it in a virtual reality headset. The most amazing part is that you can try cooking and get real experience.

8. Payments Methods

Consumers have become a lot more advanced than before. Customers need comfort. Since the evolution of the digital era, there are a lot of different methods of payment. Every consumer has different payment options. It becomes important to have all the options available so that the customers get a hustle free shopping experience. As already, IKEA is a price dominant company, best price with all modes of payments is like a cherry on the cake.

Unknown Facts About IKEA

  • Ikea is the third-largest wood consumer on the planet. Being the leading furniture company it should not be shocking.
  • IKEA is claimed to print more copies of its annual catalogue each year than the bible.
  • IKEA has very good food sales. Being known for its furniture has a very good taste when it comes to their restaurant. This can be a great contribution to their revenue as they have an approximate sale of 2 billion annually.
  • As in 2014, they have 716 million visitors to their store. This is a very huge number.
  •  The first IKEA restaurant was launched in 1956 to feed its customers that would feel hungry after spending the whole day shopping.

SWOT Analysis of IKEA

* Its vision – ‘to create a better everyday life for many people’

* Economies of scale

* Lowest Price

* Countless designs

* Bad press

* Low quality

* Difficulty to control standards across locations.

OPPORTUNITY

* Solutions for a sustainable life at home

* Developing social responsibility

* The recession slows down consumer spending

* More competitors entering the low price household and furnishings

IKEA is one of the biggest furniture companies in the world founded by a carpenter named Ingvar Kamprad who was 17-year-old, in Sweden in 1943.

The company started with selling pens, wallets, jewellery with the concept of meeting consumers demands at the most affordable prices.

IKEA KEY VALUES

They are very strict about their values.

They firmly believe that every individual has something valuable to

Let’s look at some of there core values –

1. Cost – Consciousness

Their first priority is to make their product affordable to as many

people as possible. They challenge themselves constantly to make

the product more affordable without compromising on quality.

2. Renew and Improve

They always challenge themselves to try something new and to find a

a better way out.

3. Caring for People and Planet

They believe in caring for people as well as for the environment.

They act as a force for a positive change.

IKEA IN INDIA

In 2006, Ikea first displayed an interest in the Indian market but back then

the Indian laws allowed only 51 per cent foreign ownership.

With the government of India relaxing the norms for foreign direct

investment (FDI) in single-brand retail, IKEA announced in October

their intention to open stores in India.

IKEA opened its first store in India on Aug 9, 2018.

It took IKEA 12 long years to enter the Indian market.

The first store in India was opened in Hyderabad.

Hyderabad, the southern Indian city gave it a roaring welcome.

So far, more than 3 million customers have visited IKEA Hyderabad

store and about 8 million have visited IKEA’s India website

In the year 2016, Ikea purchased land in Mumbai and said that it planned

to open stores in Bengaluru and Delhi too.

After Hyderabad, in 2019 IKEA has launched its first online store in

Mumbai is offering more than 7,500 products.

It will provide delivery to most of the locations in Mumbai and will have

a delivery time of four to seven days, subject to availability and distance.

In India, IKEA currently has more than 55+ suppliers.

Also, have more than 45,000 direct employees and 400,000 people in the

extended supply chain.

Now, the company plans to have more than 25 stores in India by 2025.

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IKEA Case Study Analysis

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Sustainability at ikea group case study analysis & solution, harvard business case studies solutions - assignment help.

Sustainability at IKEA Group is a Harvard Business (HBR) Case Study on Strategy & Execution , Fern Fort University provides HBR case study assignment help for just $11. Our case solution is based on Case Study Method expertise & our global insights.

Strategy & Execution Case Study | Authors :: V. Kasturi Rangan, Michael W. Toffel, Vincent Dessain, Jerome Lenhardt

Case study description.

By 2014, IKEA Group was the largest home furnishing company, with EUR28.5 billion of sales, and planned to reach EUR50 billion by 2020, mainly from emerging markets. At the same time, IKEA Group had adopted in 2012 a new sustainability strategy that focused the company's efforts on its entire value chain from its raw materials sourcing to the lifestyle of its end consumers. The plan especially centered on wood, which represented 60% of IKEA Group's total procurement in volume and constituted a key lever for the company to increase its positive impact on sustainability. IKEA Group Management therefore had to decide how to manage its portfolio of wood sustainability initiatives, especially in the context of the company's aggressive growth plan.

Marketing, Social enterprise, Supply chain, Sustainability

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[10 Steps] Case Study Analysis & Solution

Step 1 - reading up harvard business review fundamentals on the strategy & execution.

Even before you start reading a business case study just make sure that you have brushed up the Harvard Business Review (HBR) fundamentals on the Strategy & Execution. Brushing up HBR fundamentals will provide a strong base for investigative reading. Often readers scan through the business case study without having a clear map in mind. This leads to unstructured learning process resulting in missed details and at worse wrong conclusions. Reading up the HBR fundamentals helps in sketching out business case study analysis and solution roadmap even before you start reading the case study. It also provides starting ideas as fundamentals often provide insight into some of the aspects that may not be covered in the business case study itself.

Step 2 - Reading the Sustainability at IKEA Group HBR Case Study

To write an emphatic case study analysis and provide pragmatic and actionable solutions, you must have a strong grasps of the facts and the central problem of the HBR case study. Begin slowly - underline the details and sketch out the business case study description map. In some cases you will able to find the central problem in the beginning itself while in others it may be in the end in form of questions. Business case study paragraph by paragraph mapping will help you in organizing the information correctly and provide a clear guide to go back to the case study if you need further information. My case study strategy involves -

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Step 3 - Sustainability at IKEA Group Case Study Analysis

Once you are comfortable with the details and objective of the business case study proceed forward to put some details into the analysis template. You can do business case study analysis by following Fern Fort University step by step instructions -

  • Company history is provided in the first half of the case. You can use this history to draw a growth path and illustrate vision, mission and strategic objectives of the organization. Often history is provided in the case not only to provide a background to the problem but also provide the scope of the solution that you can write for the case study.
  • HBR case studies provide anecdotal instances from managers and employees in the organization to give a feel of real situation on the ground. Use these instances and opinions to mark out the organization's culture, its people priorities & inhibitions.
  • Make a time line of the events and issues in the case study. Time line can provide the clue for the next step in organization's journey. Time line also provides an insight into the progressive challenges the company is facing in the case study.

Step 4 - SWOT Analysis of Sustainability at IKEA Group

Once you finished the case analysis, time line of the events and other critical details. Focus on the following -

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Step 5 - Porter 5 Forces / Strategic Analysis of Industry Analysis Sustainability at IKEA Group

In our live classes we often come across business managers who pinpoint one problem in the case and build a case study analysis and solution around that singular point. Business environments are often complex and require holistic solutions. You should try to understand not only the organization but also the industry which the business operates in. Porter Five Forces is a strategic analysis tool that will help you in understanding the relative powers of the key players in the business case study and what sort of pragmatic and actionable case study solution is viable in the light of given facts.

Step 6 - PESTEL, PEST / STEP Analysis of Sustainability at IKEA Group

Another way of understanding the external environment of the firm in Sustainability at IKEA Group is to do a PESTEL - Political, Economic, Social, Technological, Environmental & Legal analysis of the environment the firm operates in. You should make a list of factors that have significant impact on the organization and factors that drive growth in the industry. You can even identify the source of firm's competitive advantage based on PESTEL analysis and Organization's Core Competencies.

Step 7 - Organizing & Prioritizing the Analysis into Sustainability at IKEA Group Case Study Solution

Once you have developed multipronged approach and work out various suggestions based on the strategic tools. The next step is organizing the solution based on the requirement of the case. You can use the following strategy to organize the findings and suggestions.

  • Build a corporate level strategy - organizing your findings and recommendations in a way to answer the larger strategic objective of the firm. It include using the analysis to answer the company's vision, mission and key objectives , and how your suggestions will take the company to next level in achieving those goals.
  • Business Unit Level Solution - The case study may put you in a position of a marketing manager of a small brand. So instead of providing recommendations for overall company you need to specify the marketing objectives of that particular brand. You have to recommend business unit level recommendations. The scope of the recommendations will be limited to the particular unit but you have to take care of the fact that your recommendations are don't directly contradict the company's overall strategy. For example you can recommend a low cost strategy but the company core competency is design differentiation.
  • Case study solutions can also provide recommendation for the business manager or leader described in the business case study.

Step 8 -Implementation Framework

The goal of the business case study is not only to identify problems and recommend solutions but also to provide a framework to implement those case study solutions. Implementation framework differentiates good case study solutions from great case study solutions. If you able to provide a detailed implementation framework then you have successfully achieved the following objectives -

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Step 9 - Take a Break

Once you finished the case study implementation framework. Take a small break, grab a cup of coffee or whatever you like, go for a walk or just shoot some hoops.

Step 10 - Critically Examine Sustainability at IKEA Group case study solution

After refreshing your mind, read your case study solution critically. When we are writing case study solution we often have details on our screen as well as in our head. This leads to either missing details or poor sentence structures. Once refreshed go through the case solution again - improve sentence structures and grammar, double check the numbers provided in your analysis and question your recommendations. Be very slow with this process as rushing through it leads to missing key details. Once done it is time to hit the attach button.

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Sustainability At Ikea Group Case Study Solution Analysis

Sustainability At Ikea Group Case Study Solution Analysis

by HBR Twenty One

Sustainability At Ikea Group Case Study Solution & Analysis. Get Sustainability At Ikea Group Case Study Analysis & Solution. Contact us directly at buycasesolutions(at)gmail(dot)com if you want to order for Sustainability At Ikea Group Case Solution, Case... More

Sustainability At Ikea Group Case Study Solution & Analysis. Get Sustainability At Ikea Group Case Study Analysis & Solution. Contact us directly at buycasesolutions(at)gmail(dot)com if you want to order for Sustainability At Ikea Group Case Solution, Case Analysis, Case Study Solution. V. Kasturi Rangan, Michael W. Toffel, Vincent Dessain, Jerome Lenhardt Less

Email us for Any Case Solution at: [email protected] Sustainability at IKEA Group Case Study Solution & Analysis Sustainability at IKEA Group Case Study Solution & Analysis. Our tutors are available 24/7 to assist in your academic stuff, Our Professional writers are ready to serve you in services you need. Every Case Study Solution & Analysis is prepared from scratch, top quality, plagiarism free. Authors: V. Kasturi Rangan, Michael W. Toffel, Vincent Dessain, Jerome Lenhardt Get Case Study Solution and Analysis of Sustainability at IKEA Group in a FAIR PRICE!! Steps for Case Study Solution & Analysis: 1. Introduction of Sustainability at IKEA Group Case Solution The Sustainability at IKEA Group case study is a Harvard Business Review case study, which presents a simulated practical experience to the reader allowing them to learn about real life problems in the business world. The Sustainability at IKEA Group case consisted of a central issue to the organization, which had to be identified, analysed and creative solutions had to be drawn to tackle the issue. This paper presents the solved Sustainability at IKEA Group case analysis and case solution. The method through which the analysis is done is mentioned, followed by the relevant tools used in finding the solution. The case solution first identifies the central issue to the Sustainability at IKEA Group case study, and the relevant stakeholders affected by this issue. This is known as the problem identification stage. After this, the relevant tools and models are used, which help in the case study analysis and case study solution. The tools used in identifying the solution consist of the SWOT Analysis, Porter Five Forces Analysis, PESTEL Analysis, VRIO analysis, Value Chain Analysis, BCG Matrix analysis, Ansoff Matrix analysis, and the Marketing Mix analysis. The solution consists of recommended strategies to overcome this central issue. It is a good idea to also propose alternative case study solutions, because if the main solution is not found feasible, then the alternative solutions could be implemented. Lastly, a good case study solution also includes an implementation plan for the recommendation strategies. This shows how through a step-by-step procedure as to how the central issue can be resolved. Email us for Any Case Solution at: [email protected] Note: This article is just a sample and not an actual case solution. If you want original case solution, please place your order on the Email.

Email us for Any Case Solution at: [email protected] 2. Problem Identification of Sustainability at IKEA Group Case Solution Harvard Business Review cases involve a central problem that is being faced by the organization and these problems affect a number of stakeholders. In the problem identification stage, the problem faced by Sustainability at IKEA Group is identified through reading of the case. This could be mentioned at the start of the reading, the middle or the end. At times in a case analysis, the problem may be clearly evident in the reading of the HBR case. At other times, finding the issue is the job of the person analysing the case. It is also important to understand what stakeholders are affected by the problem and how. The goals of the stakeholders and are the organization are also identified to ensure that the case study analysis are consistent with these. 3. Analysis of the Sustainability at IKEA Group HBR Case Study The objective of the case should be focused on. This is doing the Sustainability at IKEA Group Case Solution. This analysis can be proceeded in a step-by-step procedure to ensure that effective solutions are found. In the first step, a growth path of the company can be formulated that lays down its vision, mission and strategic aims. These can usually be developed using the company history is provided in the case. Company history is helpful in a Business Case study as it helps one understand what the scope of the solutions will be for the case study. The next step is of understanding the company; its people, their priorities and the overall culture. This can be done by using company history. It can also be done by looking at anecdotal instances of managers or employees that are usually included in an HBR case study description to give the reader a real feel of the situation. Lastly, a timeline of the issues and events in the case needs to be made. Arranging events in a timeline allows one to predict the next few events that are likely to take place. It also helps one in developing the case study solutions. The timeline also helps in understanding the continuous challenges that are being faced by the organisation. 4. SWOT analysis of Sustainability at IKEA Group An important tool that helps in addressing the central issue of the case and coming up with Sustainability at IKEA Group HBR case solution is the SWOT analysis. The SWOT analysis is a strategic management tool that lists down in the form of a matrix, an organisation's internal strengths and weaknesses, and external opportunities and threats. It helps in the strategic analysis of Sustainability at IKEA Group Email us for Any Case Solution at: [email protected] Note: This article is just a sample and not an actual case solution. If you want original case solution, please place your order on the Email.

Email us for Any Case Solution at: [email protected] Once this listing has been done, a clearer picture can be developed in regards to how strategies will be formed to address the main problem. For example, strengths will be used as an advantage in solving the issue. Therefore, the SWOT analysis is a helpful tool in coming up with the Sustainability at IKEA Group Case Study answers. One does not need to remain restricted to using the traditional SWOT analysis, but the advanced TOWS matrix or weighted average SWOT analysis can also be used. 5. Porter Five Forces Analysis for Sustainability at IKEA Group Another helpful tool in finding the case solutions is of Porter's Five Forces analysis. This is also a strategic tool that is used to analyse the competitive environment of the industry in which Sustainability at IKEA Group operates in. Analysis of the industry is important as businesses do not work in isolation in real life, but are affected by the business environment of the industry that they operate in. Harvard Business case studies represent real-life situations, and therefore, an analysis of the industry's competitive environment needs to be carried out to come up with more holistic case study solutions. In Porter's Five Forces analysis, the industry is analysed along 5 dimensions. • These are the threats that the industry faces due to new entrants. • It includes the threat of substitute products. • It includes the bargaining power of buyers in the industry. • It includes the bargaining power of suppliers in an industry. • Lastly, the overall rivalry or competition within the industry is analysed This tool helps one understand the relative powers of the major players in the industry and its overall competitive dynamics. Actionable and practical solutions can then be developed by keeping these factors into perspective. 6. PESTEL Analysis of Sustainability at IKEA Group Another helpful tool that should be used in finding the case study solutions is the PESTEL analysis. This also looks at the external business environment of the organisation helps in finding case study Analysis to real-life business issues as in HBR cases. • The PESTEL analysis particularly looks at the macro environmental factors that affect the industry. These are the political, environmental, social, technological, environmental and legal (regulatory) factors affecting the industry. • Factors within each of these 6 should be listed down, and analysis should be made as to how these affect the organisation under question. 7. VRIO Analysis of Sustainability at IKEA Group Email us for Any Case Solution at: [email protected] Note: This article is just a sample and not an actual case solution. If you want original case solution, please place your order on the Email.

Email us for Any Case Solution at: [email protected] This is an analysis carried out to know about the internal strengths and capabilities of Sustainability at IKEA Group . Under the VRIO analysis, the following steps are carried out: • The internal resources of Sustainability at IKEA Group are listed down. • Each of these resources are assessed in terms of the value it brings to the organization. • Each resource is assessed in terms of how rare it is. A rare resource is one that is not commonly used by competitors. • Each resource is assessed whether it could be imitated by competition easily or not. • Lastly, each resource is assessed in terms of whether the organization can use it to an advantage or not. • The analysis done on the 4 dimensions; Value, Rareness, Imitability, and Organization. If a resource is high on all of these 4, then it brings long-term competitive advantage. If a resource is high on Value, Rareness, and Imitability, then it brings an unused competitive advantage. If a resource is high on Value and Rareness, then it only brings temporary competitive advantage. If a resource is only valuable, then it’s a competitive parity. If it’s none, then it can be regarded as a competitive disadvantage. 8. Value Chain Analysis of Sustainability at IKEA Group The Value chain analysis of Sustainability at IKEA Group helps in identifying the activities of an organization, and how these add value in terms of cost reduction and differentiation. This tool is used in the case study analysis as follows: • The firm’s primary and support activities are listed down. • Identifying the importance of these activities in the cost of the product and the differentiation they produce. • Lastly, differentiation or cost reduction strategies are to be used for each of these activities to increase the overall value provided by these activities. Recognizing value creating activities and enhancing the value that they create allow Sustainability at IKEA Group to increase its competitive advantage. 9. BCG Matrix of Sustainability at IKEA Group The BCG Matrix is an important tool in deciding whether an organization should invest or divest in its strategic business units. The matrix involves placing the strategic business units of a business in one of four categories; question marks, stars, dogs and cash cows. The placement in these categories depends on the relative market share of the organization and the market growth of these strategic business units. The steps to be followed in this analysis is as follows: • Identify the relative market share of each strategic business unit. Email us for Any Case Solution at: [email protected] Note: This article is just a sample and not an actual case solution. If you want original case solution, please place your order on the Email.

Email us for Any Case Solution at: [email protected] • Identify the market growth of each strategic business unit. • Place these strategic business units in one of four categories. Question Marks are those strategic business units with high market share and low market growth rate. Stars are those strategic business units with high market share and high market growth rate. Cash Cows are those strategic business units with high market share and low market growth rate. Dogs are those strategic business units with low market share and low growth rate. • Relevant strategies should be implemented for each strategic business unit depending on its position in the matrix. The strategies identified from the Sustainability at IKEA Group BCG matrix and included in the case pdf. These are either to further develop the product, penetrate the market, develop the market, diversification, investing or divesting. 10. Ansoff Matrix of Sustainability at IKEA Group Ansoff Matrix is an important strategic tool to come up with future strategies for Sustainability at IKEA Group in the case solution. It helps decide whether an organization should pursue future expansion in new markets and products or should it focus on existing markets and products. • The organization can penetrate into existing markets with its existing products. This is known as market penetration strategy. • The organization can develop new products for the existing market. This is known as product development strategy. • The organization can enter new markets with its existing products. This is known as market development strategy. • The organization can enter into new markets with new products. This is known as a diversification strategy. The choice of strategy depends on the analysis of the previous tools used and the level of risk the organization is willing to take. 11. Marketing Mix of Sustainability at IKEA Group Sustainability at IKEA Group needs to bring out certain responses from the market that it targets. To do so, it will need to use the marketing mix, which serves as a tool in helping bring out responses from the market. The 4 elements of the marketing mix are Product, Price, Place and Promotions. The following steps are required to carry out a marketing mix analysis and include this in the case study analysis. • Analyse the company’s products and devise strategies to improve the product offering of the company. • Analyse the company’s price points and devise strategies that could be based on competition, value or cost. • Analyse the company’s promotion mix. This includes the advertisement, public relations, personal selling, sales promotion, and direct marketing. Strategies will be devised which makes use of a few or all of these elements. Email us for Any Case Solution at: [email protected] Note: This article is just a sample and not an actual case solution. If you want original case solution, please place your order on the Email.

Email us for Any Case Solution at: [email protected] • Analyse the company’s distribution and reach. Strategies can be devised to improve the availability of the company’s products. 12. Sustainability at IKEA Group Strategy The strategies devised and included in the Sustainability at IKEA Group case memo should have a strategy. A strategy is a strategy that involves firms seeking uncontested market spaces, which makes the competition of the company irrelevant. It involves coming up with new and unique products or ideas through innovation. This gives the organization a competitive advantage over other firms, unlike a red ocean strategy. 13. Competitors analysis of Sustainability at IKEA Group The PESTEL analysis discussed previously looked at the macro environmental factors affecting business, but not the microenvironmental factors. One of the microenvironmental factors are competitors, which are addressed by a competitor analysis. The Competitors analysis of Sustainability at IKEA Group looks at the direct and indirect competitors within the industry that it operates in. • This involves a detailed analysis of their actions and how these would affect the future strategies of Sustainability at IKEA Group . • It involves looking at the current market share of the company and its competitors. • It should compare the marketing mix elements of competitors, their supply chain, human resources, financial strength etc. • It also should look at the potential opportunities and threats that these competitors pose on the company. 14. Organisation of the Analysis into Sustainability at IKEA Group Case Study Solution Once various tools have been used to analyse the case, the findings of this analysis need to be incorporated into practical and actionable solutions. These solutions will also be the Sustainability at IKEA Group case answers. These are usually in the form of strategies that the organisation can adopt. The following step-by-step procedure can be used to organise the Harvard Business case solution and recommendations: • The first step of the solution is to come up with a corporate level strategy for the organisation. This part consists of solutions that address issues faced by the organisation on a strategic level. This could include suggestions, changes or recommendations to the company's vision, mission and its strategic objectives. It can include recommendations on how the organisation can work towards achieving these strategic objectives. Furthermore, it needs to be explained how the stated recommendations will help in solving the main Email us for Any Case Solution at: [email protected] Note: This article is just a sample and not an actual case solution. If you want original case solution, please place your order on the Email.

Email us for Any Case Solution at: [email protected] issue mentioned in the case and where the company will stand in the future as a result of these. • The second step of the solution is to come up with a business level strategy. The HBR case studies may present issues faced by a part of the organisation. For example, the issues may be stated for marketing and the role of a marketing manager needs to be assumed. So, recommendations and suggestions need to address the strategy of the marketing department in this case. Therefore, the strategic objectives of this business unit (Marketing) will be laid down in the solutions and recommendations will be made as to how to achieve these objectives. Similar would be the case for any other business unit or department such as human resources, finance, IT etc. The important thing to note here is that the business level strategy needs to be aligned with the overall corporate strategy of the organisation. For example, if one suggests the organisation to focus on differentiation for competitive advantage as a corporate level strategy, then it can't be recommended for the Sustainability at IKEA Group Case Study Solution that the business unit should focus on costs. • The third step is not compulsory but depends from case to case. In some HBR case studies, one may be required to analyse an issue at a department. This issue may be analysed for a manager or employee as well. In these cases, recommendations need to be made for these people. The solution may state that objectives that these people need to achieve and how these objectives would be achieved. The case study analysis and solution, and Sustainability at IKEA Group case answers should be written down in the Sustainability at IKEA Group case memo, clearly identifying which part shows what. The Sustainability at IKEA Group case should be in a professional format, presenting points clearly that are well understood by the reader. 15. Alternate solution to the Sustainability at IKEA Group HBR case study It is important to have more than one solution to the case study. This is the alternate solution that would be implemented if the original proposed solution is found infeasible or impossible due to a change in circumstances. The alternate solution for Sustainability at IKEA Group is presented in the same way as the original solution, where it consists of a corporate level strategy, business level strategy and other recommendations. 16. Implementation of Sustainability at IKEA Group Case Solution Email us for Any Case Solution at: [email protected] Note: This article is just a sample and not an actual case solution. If you want original case solution, please place your order on the Email.

Email us for Any Case Solution at: [email protected] The case study does not end at just providing recommendations to the issues at hand. One is also required to provide how these recommendations would be implemented. This is shown through a proper implementation framework. A detailed implementation framework helps in distinguishing between an average and an above average case study answer. A good implementation framework shows the proposed plan and how the organisations' resources would be used to achieve the objectives. It also lays down the changes needed to be made as well as the assumptions in the process. • A proper implementation framework shows that one has clearly understood the case study and the main issue within it. • It shows that one has been clarified with the HBR fundamentals on the topic. • It shows that the details provided in the case have been properly analysed. • It shows that one has developed an ability to prioritise recommendations and how these could be successfully implemented. • The implementation framework also helps by removing out any recommendations that are not practical or actionable as these could not be implemented. Therefore, the implementation framework ensures that the solution to the Sustainability at IKEA Group Harvard case is complete and properly answered. 17. Recommendations and Action Plan for Sustainability at IKEA Group case analysis For Sustainability at IKEA Group, based on the SWOT Analysis, Porter Five Forces Analysis, PESTEL Analysis, VRIO analysis, Value Chain Analysis, BCG Matrix analysis, Ansoff Matrix analysis, and the Marketing Mix analysis, the recommendations and action plan are as follows: • Sustainability at IKEA Group should focus on making use of its strengths identified from the VRIO analysis to make the most of the opportunities identified from the PESTEL. • Sustainability at IKEA Group should enhance the value creating activities within its value chain. • Sustainability at IKEA Group should invest in its stars and cash cows, while getting rid of the dogs identified from the BCG Matrix analysis. • To achieve its overall corporate and business level objectives, it should make use of the marketing mix tools to obtain desired results from its target market. Email us for Any Case Solution at: [email protected] Note: This article is just a sample and not an actual case solution. If you want original case solution, please place your order on the Email.

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Defining and executing the vision for the next-generation customer experience

A busy IKEA living room setting with a grey 3 seater sofa with cushions and two plywood coffee tables

What we did

  • Vision for transformation
  • First e-commerce app
  • Global site redesign
  • Redefined in-store digital
  • Built a design system

Growth in e-commerce in 3 years

Increase in online sales in 2020

Star rating, up from 2.5

IKEA’s footprint is vast—over two billion people shop a range of 12,000 products in 500+ sales locations in 59 countries and online. But as digital becomes increasingly important—especially in the age of Covid—the retail behemoth needed to modernize and transform their business.

As their digital agency of record, Work & Co defined the vision of a future where technology holistically enhances the customer experience at every interaction. Of course, we didn’t stop there. We also helped bring it to life.

Our first challenge—creating IKEA’s first e-commerce-enabled mobile app—took just 6 months from concept to MVP. From there, we took on the entire multi-channel ecosystem of digital touchpoints, including the website, internal tools, and the stores.

The new experience led to greater efficiency, richer engagements, and incremental revenue.

Recognition & Awards

“It is a completely new experience. The app is combined with the store." Read more

"A bona-fide, full-featured shopping app." Read more

"The approach is sound and offers much to learn from." Read more

Shortlist, Design Week Awards, Best App Design. Read more

Winner, 6X Lovie Awards. Read more

Winner, 3X Platinum Awards. Read more

Finalist, FastCo Innovation by Design Awards, Data Design. Read more

4 Big Takeaways

Defining a vision for product and partnership.

Overhauling web & mobile commerce

A unifying design system

Redefining in-store touch points, bringing ikea into the “now”.

Already a worldwide leader in brick-and-mortar retail, IKEA’s leadership partnered with Work & Co to accelerate their digital transformation. Our team’s first task was to develop a cohesive and tech-savvy vision and strategy around which the global organization could align. We began a months-long process of research and brainstorming and problem solving.

From idea to execution

Once we’d identified effective solutions to the challenges, we drafted a new vision for the customer journey intricately detailed in animations and prototypes, which helped ensure all parties were aligned on the plan: aspirational and sophisticated, but also attainable. Together with IKEA, we established a strategy to work as partners with internal teams, sharing design and development labor, openly exchanging ideas and feedback, and even providing guidance on IKEA’s hiring strategies.

Overhauling web & mobile commerce

Personalized inspiration.

To bring IKEA’s famed catalog to life for the digitally native, the app leads with inspiration. Customers browse the app the same way they would IKEA’s showroom—imagining how products complement their home or aesthetic—but with technology enhancing the journey.

A new AI-powered API suggests images based on a customer’s interests and evolving taste. Our cross-platform CMS allows editors to create content once, then deploy them across both the app and IKEA.com. And to bring over 760 collections to life, our team of writers built new engaging copy that scales no matter the country.

Category-specific experiences

From mattresses to lightbulbs to kitchens and beyond, the variety of products IKEA offers are presented and sold in a myriad of ways. The flexible digital designs enable a shopping experience optimized by category and use. Inspiration galleries, planners, guides, and other content can easily be added to help shoppers find their perfect option, plus accessories and add-ons to complete the look. With around 250,000 SKUs per market, this aspect of our work was essential.

Ethical data usage

Industry-leading contextual digital tools raise the bar on data transparency and give customers control over how data is collected, stored, and used. Customers can choose if and how the company uses information—such as their IKEA browsing history, previous purchases, and product preferences—to inform product recommendations in its app, and eventually on its website. To aid explanation of these abstract concepts to users, we explored evolving the iconic IKEA assembly character as an approachable guide.

Consistency at scale

To address the challenge of keeping consistent design across all of the different touchpoints, we worked with IKEA to build a new design system. Skapa is a single source of truth for global button styles, iconography, interaction patterns, and motion libraries brought to life in one React Storybook component library. Components are strategically added and removed over time, meaning the design system is treated as a product that will never stop evolving, while simultaneously keeping the brand universally aligned.

Branding and tone of voice

From a custom icon set to branded price presentation and rigorous color guidelines, each component infuses the IKEA branding into our digital platforms. To complete our design system, we also established a new, digital-first tone of voice with dynamic writing guidelines. Now, writers, designers, motion designers, and developers have everything they need to produce new work across the digital ecosystem.

Integrated accessibility

By including best practices for accessibility into design components, we ensure our digital products are natively inclusive. Solutions are defined once, and repeated throughout development.

Global adoption

A design system is only successful if it’s used globally by an organization. That’s why we helped IKEA establish strategies for training tailored to user types and knowledge levels, advocating for adoption, maintenance and upkeep of components and documentation, and hiring a team dedicated to its management. These critical pieces helped to ensure long term success.

New ways to shop

Part of IKEA’s transformation includes the introduction of new store formats—spaces dedicated to browsing, planning, and ordering—in addition to the traditional locations. The new ecosystem Work & Co delivered integrates digital and physical across all stores in new ways, enhancing the experience for both shoppers and co-workers. New digital tools and features provide more relevant product browsing and interactions, personalized recommendations and shopping lists, and seamless checkout processes—all tailored to the shoppers’ preferences and needs.

Digital touchpoints are integrated to bridge the omni-channel experience. In-store features give users the ability to scan products, explore options and accessories, then skip the checkout line while in the physical store, reducing customer stress and simplifying the path to purchase.

We helped create Upptäcka, a replacement for the aging digital in-store installations. These new kiosks integrate with each other and the overall IKEA digital ecosystem, reducing one-off solutions. Upptäcka adapts to each store and location, making it the most contextually relevant digital touchpoint at IKEA.

Employee tools

Fixa is a task management app designed to digitize time-consuming paper-based processes, making co-workers more efficient and effective, freeing up time to focus on customers. Co-workers have called it “the best product IKEA has ever given them.”

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Work & Co, part of Accenture Song, is trusted by the world’s leading companies to drive growth and bring innovative solutions to market. Together we can build and scale your core digital products.

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Sustainability

Montenegro court delays extradition of Do Kwon

Terraform Labs and founder Do Kwon found liable in US civil fraud trial

A jury in Manhattan found Singapore-based Terraform Labs and its founder Do Kwon liable on civil fraud charges on Friday, agreeing with the U.S. Securities and Exchange Commission that they misled investors before their stablecoin's 2022 collapse shocked cryptocurrency markets.

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    The "Sustainability at IKEA Group" case study assesses the People and Planet Positive sustainability plan of the company. It discusses the program concerning its being aligned with IKEA's business model. V. Kasturi Rangan, Michael W. Toffel, Vincent Dessain, Jerome Lenhardt. Harvard Business Review ( 515033-PDF-ENG)

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    IKEA Harvard Case Solution & Analysis. INTRODUCTION. The Ingvar Kamprad established IKEA in the year 1943. At its starting stage, the company was selling the catalog of household goods given the discount on it. Later on in the year 1947, Kamprad started to sell the furnishing goods and after six years of selling, furnishing, goods Kamprad ...

  10. Sustainable supply chain management: a case study at IKEA

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  11. IKEA's Global Sourcing Challenge: Indian Rugs

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  12. IKEA

    Citation. Van den Steen, Eric, and Alon Galor. "IKEA." Harvard Business School Case 716-458, March 2016. (Revised January 2017.)

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    2 Minute Summary. IKEA is one of the biggest furniture companies in the world founded by a carpenter named Ingvar Kamprad who was 17-year-old, in Sweden in 1943. Everybody knows that Ikea offers the products at a very lower price than any retail shop. Ikea has invested 800 crores in India, It has more than 9500 Products and has more than 350 ...

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    Step 2 - Reading the Ingvar Kamprad and IKEA HBR Case Study. To write an emphatic case study analysis and provide pragmatic and actionable solutions, you must have a strong grasps of the facts and the central problem of the HBR case study. Begin slowly - underline the details and sketch out the business case study description map.

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    SecB_Group6_Case Sustainability at IKEA - Free download as Powerpoint Presentation (.ppt / .pptx), PDF File (.pdf), Text File (.txt) or view presentation slides online. case study solution

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    Ikea Case Study solution - Free download as Word Doc (.doc / .docx), PDF File (.pdf), Text File (.txt) or read online for free. Ikea solution

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    Step 2 - Reading the Sustainability at IKEA Group HBR Case Study. To write an emphatic case study analysis and provide pragmatic and actionable solutions, you must have a strong grasps of the facts and the central problem of the HBR case study. Begin slowly - underline the details and sketch out the business case study description map.

  22. Sustainability At Ikea Group Case Study Solution Analysis

    The case solution first identifies the central issue to the Sustainability at IKEA Group case study, and the relevant stakeholders affected by this issue. This is known as the problem identification stage. After this, the relevant tools and models are used, which help in the case study analysis and case study solution.

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    IKEA's footprint is vast—over two billion people shop a range of 12,000 products in 500+ sales locations in 59 countries and online. But as digital becomes increasingly important—especially in the age of Covid—the retail behemoth needed to modernize and transform their business. As their digital agency of record, Work & Co defined the ...

  24. IKEA stores owner Ingka seeks green energy expansion in S.Korea, Japan

    A man tries out a sofa at an Ikea store in Gwangmyeong, South Korea, February 3, 2016. Picture taken February 3, 2016. REUTERS/Kim Hong-Ji/File Photo Purchase Licensing Rights, opens new tab