Feb 20, 2022

A SWOT Analysis of the Furniture Giant: What are the Strengths of IKEA

Business Model Idea
by Stefan Lemmerer

What is Actually Ikea's Business Model?

IKEA is the world's leading home products retailer. Selling flat pack furnitures and further home accessoires in retail stores around the globe. While shopping, customers see the furniture in stylish and accurately designed rooms. The selected products can be taken home in modular kits to be assembled by the customers. As of June 2021, IKEA owns and operates 458 stores in 46 countries.

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The Strengh of Ikea's SWOT Analysis

IKEA SWOT Analysis ©Business Model Ideas

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Brand Value

Ikea stands number 6th in the top 10 organization in the retail sector.
The organization understands the purchasing factors that influence clients' decisions to purchase furniture and implements the prescribed procedures to facilitate that decision.

Financial Strength

The revenue of Ikea was around €39.6 billion in 2020. Its financial profits for the same were €1.7 billion billion.


Ikea’s biggest strength lies in the kind of product it manufactures and designs.
IKEA offers low prices and a wide variety of products, and is constantly introducing new items to the market that are trendy and eye-catching for customers.

Additionally, the organization provides an astoundingly diverse product selection and an enjoyable shopping experience. When Americans considered purchasing furniture, the brand IKEA was the first to come to mind.


They are on constant research and innovation to keep bringing the prices down for the customers and also to keep adding different furniture to their portfolio.
R&D falls into 3 main points at Ikea:

  • Research: Examining the major changes that are expected to affect people over the next few decades and attempting to identify opportunities for a better daily life.

  • Design: Taking action on identified opportunities to create more sustainable and better ways of life. By adopting a holistic perspective, we seek to create solutions that benefit both people and the planet.

  • Culture: Connecting with people from all over the world in order to exchange ideas, spark discussions, and empower individuals to effect positive change.


Ikea is known as a clever marketer and has fantastic product placements in their shops but also in films and on TV in some cases.

IKEA places a high premium on marketing and advertising campaigns. The brand advertises through both display advertising such as hoardings and billboards and print media such as newspapers, television, and online advertisements. In recent years, IKEA has launched several innovative advertising campaigns. The brand believes that social disarray and gender conflicts can be resolved and avoided. They have taken this concept and created advertisements around it. Their product catalog is available in print and online. Apart from that, an exhaustive version of the list is available on the IKEA website. Additionally, IKEA stores, local distribution channels, leaflets, and publicities are used to advertise the brand.

2 successful Strategies of Ikea

1. Involving customers in the product creation process.

The strategy, IKEA is pursuing, is to provide a range of home furnishing products that are affordable to the many people, not just the few. Therefore, the company focuses on combining function, quality, design and value, also involving the concept of sustainability. The company assigns its customers an important role integrating them into its created democratic design process. Both parties are assumed to take part in the process in order to save money. Customers get involved in activities such as assembling the flat-pack products or providing feedback. With its philosophy that higher volumes result in lower costs and consequently in lower prices, the company continues its expansion across the globe.

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2. Influencing the understanding of consumer products.

With its low-cost products, IKEA changed the understanding people had about furniture. If earlier buying new furniture was regarded an investment, it became a nondurable good which similar to cloths could be changed again and again. Consumers do not feel that much attached to their low-priced products as compared to more expensive pieces.

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IKEA Patterns ©Business Model Ideas

2 of 11 Business Model Patterns behind Ikea

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Direct Selling

Direct Selling is a business model in which a manufacturer or service provider sells their products directly to consumers rather than through an intermediary channel such as retail outlets. As a result, the company is able to eliminate retail profit margins and other expenses. The customer can benefit from the savings. Additionally, the business model pattern enables a more personalized sales experience for customers and enables the company to better understand their needs, resulting in new product and service improvements. Additionally, direct selling enables the company to maintain a more precise control over sales data and a safe and consistent distribution model. For their part, customers benefit from the distinct advantage of receiving more prompt service from the company, which is critical when the products in question require extensive explanations.

Experience Selling

The Experience Selling business model pattern increases the value of a product or service by including an additional experience. For instance, a bookstore may incorporate a variety of features such as coffee bars, celebrity book signings, and workshops to provide a more comprehensive experience. This business model pattern is inextricably linked with marketing. Beyond the design of products or services, we create experiences and impressions, going beyond simply offering another undifferentiated product in a saturated market to providing customers with an all-encompassing experience rather than just product functionality. The purpose of this model is for the company to actively shape the observable environment of its customers, thereby differentiating itself from competitors. Successful experience sales increase customer loyalty and willingness to purchase additional items at a higher price, provided the associated experiences are included. Experience Selling entails coordinating all activities that affect customers' experiences: promotions, retail design, sales personnel, product functionality, availability, and packaging. Additionally, it is critical for customers to have a consistent experience regardless of which branch of the business they deal with.

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