IKEA is a globally recognized furniture retailer that offers a wide range of over 10,000 furnishing products across its 300+ stores. With an annual customer base exceeding 600 million visitors, both in-store and online, IKEA has become synonymous with Scandinavian design. The company excels by establishing long-term partnerships with suppliers to ensure access to high-quality materials at reasonable prices. Additionally, IKEA has achieved success through creating a strong global brand that delivers consistent quality and variety across all locations.
Committed to improving everyday life while being environmentally and socially responsible, IKEA takes a unique approach by providing well-designed functional products at affordable prices. This is achieved through democratic design principles that balance function, quality, design, and price while prioritizing cost-consciousness throughout the product design process. Another notable feature introduced by IKEA is their flat package concept which allows customers to assemble their furniture themselves.
However, as a global company, IKEA faces challenges in maintaining consistent product standards. To address these challenges, IKEA has implemented initiatives such as IKEA IWAY which serves as the company’s Code of Conduct.IKEA emphasizes meeting expectations and requirements set by suppliers, while acknowledging a potential trade-off between affordability and quality. The company asserts its commitment to uncompromising quality. As a global presence, engaging in dialogue with stakeholders is crucial for IKEA but demands significant time and effort. It is important to mention that IKEA China currently lacks its own CSR profile.
Opportunities for IKEA include the demand for cheaper and greener products, which shows customers’ desire to have less impact on the environment. IKEA also seeks greater globalisation and offers tips and ideas online for customers to create more sustainable homes. The company is developing strong social responsibility by giving to a wide range of different charities and reducing its carbon footprint through packing with less material. Additionally, an open dialogue with stakeholders helps create trust. IKEA is seen as an opportunistic business due to its control over a large monopoly in the market.
Threats for IKEA include direct competitors such as furniture stores, as well as indirect competitors. The aging population poses a challenge for key shopper segments. Mainstream retailers in growing competitive retail markets are starting to imitate the low-cost value flat packed furniture model. Concerns arise over rising living costs and lower disposable income during economic recessions. The expansion into the Chinese market may face setbacks, as Chinese middle-class families prefer more luxurious styles of furniture, such as those in the Ming Dynasty style. However, there are still people who are likely to visit IKEA even within this context.
