How we work – IKEA Global (2024)

FAQs

How does IKEA operate on a global scale? ›

Together, all over the world

The retail business is organised in a franchise system with 12 franchisees in 63 markets that – together with the franchisor and other parts of the business – continuously improve and develop the brand.

IKEA's remarkable success in expanding its global footprint can be attributed to its unwavering commitment to localization, a process of adapting products, services, and marketing strategies to suit the specific needs and preferences of a target market.

The desire to offer products with both a low price and good quality has always been a driving force at IKEA. However, in addition to price and quality, there are three other dimensions that are considered when developing IKEA products: function, form and sustainability.

Ikea realized it's about the revitalizing aspect(psychological, and neurological) of customer experience(magazines, store shopping experience, and food court) and to some minor level, the revitalization one receives(psychological) from product user experience, and product design.

The corporate structure is divided into two main parts: operations and franchising. INGKA Holding B.V., based in the Netherlands, owns the Ingka Group, which takes care of the centres, retails, customer fulfillment, and all the other services related to IKEA products.

In many countries, the Ikea business model has been subtly tweaked to fit local preferences and customs. Opening hours are altered, menu options are adjusted and very occasionally, women are airbrushed out of catalogs.

IKEA's supply chain strategy is a key component of its success in the retail market. The strategy is focused on leveraging global sourcing, automation of processes, lean manufacturing, and e-commerce to optimize the company's operations.

IKEA employs a mix of strategies, including affordability, sustainability, innovative product design, experiential in-store marketing, and a strong online presence to reach and engage its target audience.

IKEA has become the largest furniture retailer in the world through global expansion. It profits by pursuing low costs through sourcing from low-cost countries like China and pursuing differentiation through attractive design.

IKEA's success also lies in its low prices and how it engages and seduces customers. While affordability is a crucial factor, IKEA goes beyond that. The company offers a comprehensive customer experience that differentiates it from typical furniture stores.

How IKEA changed the world? ›

Before IKEA, North Americans living in urban areas largely purchased furniture from department stores or specialty furniture stores. IKEA changed the game by creating a carefully designed, maze-like array of showrooms that ultimately lead to a huge warehouse area where consumers can pick up the items they choose.

IKEA's biggest presence is in Germany, boasting of 55 stores in a country of 83 million people, or about one store per 1.5 million Germans. U.S. A 2022 survey found that 96% of Germans knew of the IKEA brand of which 64% actively bought furniture from them.

At IKEA, our mission is to offer a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.

IKEA's product positioning at a global level is based on its core values of affordability, functionality, and sustainability. The company's products are designed to be stylish and modern, yet practical and adaptable to different lifestyles and living spaces.

IKEA had to restrategize because of the global recession of 2008 and the general spike in prices. It repositioned itself for a long-term growth through a further reduction of product prices. Consumers were able to get the same high-quality products at lower prices.

Economies of Scale

By operating a vast network of stores worldwide, IKEA can negotiate favorable deals with suppliers, source materials at competitive prices, and streamline its supply chain. This enables them to maintain low production costs and pass on savings to customers.

IKEA is a multinational group of companies that designs and sells ready-to-assemble furniture (such as beds, chairs and desks), appliances and home accessories. As of 23 April 2024, there are 473 IKEA stores operating in 63 countries and 5 territories.

IKEA does not have a truly global strategy. The management team at IKEA has elected to use a series of regional strategies as reflected by their different marketing approaches and price points in different markets. The stores sell roughly the same items, but the prices the company sells for them differ. 2.