How IKEA’s Competitive Strategies Worked

IKEA’s Competitive Strategies

How IKEA’s Competitive Strategies Worked

The success of IKEA emanates from the concept based on providing customers with a wide variety of well-designed and functional home furnishing products. Further, the aspect of affordability enables a wider population of individuals to enjoy these products. Selling products at lower prices with a wider customer base enables the company to penetrate markets. The Swedish company has provided a unique style and brand image appealing to customers. IKEA endeavors to provide customers with beautiful, practical, and pyretic furniture to capture a wide customer base (Yohn, 2015). It has also established a competitive edge over its competitors based on the following strategies:

The company sells relatively inexpensive contemporary Scandinavian style furniture to a wide base of customers all over the world. The primary target consumer group has occurred as white-collared individuals fascinated by the unique designs employed by IKEA. It has also invested in kids’ products with an additional kids’ club.

II. Price differentiation has enabled the company to design stylish and functional furniture at an affordable price range that caters for a wide customer base. The pricing strategy of selling products to many people enables it to enjoy profits based on the application of economies of scale. Its price penetration strategy focuses on establishing the company as a low-cost provider.

III. IKEA wins hearts of customers based on its recommendable job at environmental protection. Its main raw materials include cotton, wood, metal, plastic, rattan, and glass. The company works to utilize as many recyclable and renewable materials as possible. In doing so, it captures a wider market of environmental protection enthusiasts.

IV. The three areas of focus for IKEA include home storage, office, and the children. Clearly, the company depicts a wider target group, a factor that explains its position as a major furniture retailer enabling it to place products in stores in every major nation.

V. The company has targeted world’s largest markets such as China, India, and Europe thereby a significant customer base.

VI. IKEA ships unfinished products in flat boxes, a method, referred to as ‘flat package’, leaving customers to perform final assembly. The strategy cuts shipping costs largely. Consequently, it reduces the number of staffs responsible for packaging based on the presence of less work. As a result, it can manufacture a wide array of products and ships them to various parts of the globe.

VII. The company utilizes economies of scale in making significant amounts of sales all over the world. The cost leadership applied by IKEA depicts low costs of production and high volumes of products on sale thereby resulting in profits.

VIII. IKEA sources raw materials and manufactures products in countries such as Malaysia and China thereby reducing operational costs and later shipping them to other markets.

IX. IKEA’s marketing concept envisages customer orientation and relationship marketing. Customers have the opportunity in contributing towards co-designing and co-construction of new concepts. As a result, customers enjoy the experience of customizing and applying the concepts to match their living spaces. In efforts to maintain and bring home new customers, the company has a mobile loyalty program that depicts a database where interested consumers have a chance to receive discounts from the retailers.

X. IKEA also utilizes three primary promotional methods that include TV advertising, catalogs, and direct marketing. Social media platforms also come in handy, for example, utilization of Weibo in the Chinese market. IKEA has also utilized online presence in nations such as the U.S.

Competitors have had a difficult time to match IKEA’s strategies. Producing well-designed products at affordable prices does not occur as an easy task to perform. Competitors have failed to cope up with IKEA’s design, manufacturing, and shipping strategies.

How Ikea benefited from the application of these ideas/strategies and how they were applied.

Secrets behind IKEA’s success points to its efficient supply chain processes, design, and marketing strategies. IKEA stands at the 45th position in world rankings of the most valuable companies across the globe (Forbes, 2015). Operating 360 stores in 37 countries in the world, IKEA has surpassed its competitors in providing well-designed products at low and affordable prices. IKEA has managed to impress both customers and competitors of the world based on its unique supply chain and inventory management skills that caters for the large volumes of products.

Currently, the company is valued at $11.8 billion as of May 2015 (Forbes, 2015). The company continues to record rise in sales volumes. Markets such as Russia, Hungary, and China have occurred as fast growing countries that purchase IKEA’s products. All these successes attribute to the strategies employed by the company. The company designs low cost and unique products, an aspect that lowers its manufacturing costs. Additionally, it manages to meet strict requirements leading to efficient product distribution. It is reported that more 50% of IKEA’s raw materials emanate from recyclable and reusable products. The use of recyclable materials cuts down on costs of raw materials. The use of fewer raw materials enables the company to cut down on the transportation costs giving enabling it to ship products at low costs.

The key to the success of IKEA points to the presence of reliable suppliers. Efficient communication and relationship management with the manufacturers and suppliers of the materials enables the company to fetch good prices on the products it procures. The company has gained a competitive advantage in negotiating prices with suppliers and checking on the quality of supplied materials as a high-volume retailer. The ‘flat package’ strategy enables the company in significantly reducing shipping costs. Shipping of unassembled products takes less room to maximize some products on shipment. Placing the products on convenient and efficient packages lowers the transportation costs depicting returns in revenues.

The presence of the company online enables the company to impact a competitive edge over competitors. In 2014, IKEA managed to realize $10 billion sales volume. Projections indicate that the company will realize more than $14.2 billion by 2019 (Tabuchi, 2015). The company’s venture into the online platform promises to increase its sales. Investment in its presence online has enabled it to increase its sales. The improved supply-chain efficiency has accounted for a 1.5% gross margin increase in net income. In 2014, the company recorded a net income increase of 3.1% to $4.5 billion. The improving economies are strong indicators of growth of IKEA (Gustafsson, 2015).

Currently, the company targets renewable energy, a critical driver in propelling its market presence. In 2014, the company pledged to invest 2.5 billion euros in factories, stores, shopping centers, and renewable energy. The retailer planned to spend 1.5 billion euros on renewable energy by the installation of solar panels and wind turbines (Gustafsson, 2015). These recent developments on renewable energy endeavor to suffice the company’s image as an environment conservation enthusiast.

The company sources raw materials from countries such as China and Malaysia, countries that offer cheaper raw materials. Based on the large amounts of orders on raw materials, IKEA attains great deals from its suppliers thereby cutting down on production costs.

IKEA does not compete in the high-end furniture business. It focuses on providing customers good designs at affordable prices. The low price factor and the quality of design suffice the company’s presence in the market, an aspect that supersedes competitor prospects. Undoubtedly, the business model adopted by IKEA depicts a company that combines economies of scale, good quality, and an affordable price tag in capturing a significant market share.


Gustafsson, K. (2014, January 28). Ikea Sees ‘Positive Signs’ as Economies Start to Recover. Bloomberg Business.

Tabuchi, H. (2015, January 28). As Profit Slows, Ikea Notes Need to Move Online. The New York Times. Retrieved from

Forbes (2015, May). IKEA on Forbes Lists. Forbes. Retrieved from

Yohn, D. (2015, June 10). How IKEA Designs Its Brand Success. Forbes. Retrieved from

Get Professional Assignment Help Cheaply

Buy Custom Essay

Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?

Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.

Why Choose Our Academic Writing Service?

  • Plagiarism free papers
  • Timely delivery
  • Any deadline
  • Skilled, Experienced Native English Writers
  • Subject-relevant academic writer
  • Adherence to paper instructions
  • Ability to tackle bulk assignments
  • Reasonable prices
  • 24/7 Customer Support
  • Get superb grades consistently

Online Academic Help With Different Subjects


Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.


Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.

Computer science

Computer science is a tough subject. Fortunately, our computer science experts are up to the match. No need to stress and have sleepless nights. Our academic writers will tackle all your computer science assignments and deliver them on time. Let us handle all your python, java, ruby, JavaScript, php , C+ assignments!


While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.


Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.


In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.


Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.


We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!


We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.


Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.

What discipline/subjects do you deal in?

We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.

Are your writers competent enough to handle my paper?

Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.

What if I don’t like the paper?

There is a very low likelihood that you won’t like the paper.

Reasons being:

  • When assigning your order, we match the paper’s discipline with the writer’s field/specialization. Since all our writers are graduates, we match the paper’s subject with the field the writer studied. For instance, if it’s a nursing paper, only a nursing graduate and writer will handle it. Furthermore, all our writers have academic writing experience and top-notch research skills.
  • We have a quality assurance that reviews the paper before it gets to you. As such, we ensure that you get a paper that meets the required standard and will most definitely make the grade.

In the event that you don’t like your paper:

  • The writer will revise the paper up to your pleasing. You have unlimited revisions. You simply need to highlight what specifically you don’t like about the paper, and the writer will make the amendments. The paper will be revised until you are satisfied. Revisions are free of charge
  • We will have a different writer write the paper from scratch.
  • Last resort, if the above does not work, we will refund your money.

Will the professor find out I didn’t write the paper myself?

Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.

What if the paper is plagiarized?

We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.

When will I get my paper?

You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.

Will anyone find out that I used your services?

We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.

How our Assignment  Help Service Works

1.      Place an order

You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.

2.      Pay for the order

Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.

3.      Track the progress

You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.

4.      Download the paper

The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.

smile and order essaysmile and order essay PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A PERFECT SCORE!!!

order custom essay paper