Free Paper Sample: IKEA Analysis Report

Published: 2022-09-26
Free Paper Sample: IKEA Analysis Report
Type of paper:  Report
Categories:  Strategic marketing Marketing plan
Pages: 7
Wordcount: 1728 words
15 min read

IKEA's marketing plan involves a wide range of strategies adopted by the company to address the changing market dynamics. IKEA produces its services and products with the aim of satisfying the needs of its customers. This method that involves service improvement and specific product designing for maximum satisfaction of customer wants are called a value proposition (Li, 2010). The value proposition is a plan, product or service that a company uses to attract customers. Also as a marketing strategy, IKEA differentiates what it provides from the competitive market to achieve the satisfaction of the customer.

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IKEA's value proposition involves the company focusing on the creation of experience and not just the provision of a product or service. IKEA ensures that to shop with them becomes a different experience from the normal shopping done by other companies. IKEA, for example, chooses to offer other services such as Swedish food dishes to its furniture customers. Ikea is out to change the customer's experience by improving the norm in purchasing of furniture. The company creates furniture that is based on changes in lifestyle such as making a bed that can be used as a sofa and also has a storage area.

In differentiation and positioning, IKEA tries to acquire a competitive advantage by producing products and services that are different from those from its competitors (Li, 2010). IKEA does market research and finds out what the customers would like to have and is not fully offered in the market by its competitors. Additionally, the company also uses positioning strategy by choosing to present itself as a company that is not just to the offering of products but to offering them with value. Thus, positioning itself as a value-based company.

IKEA value chain

The Ikea's value chain involves a framework of analysis that identifies activities of a business that creates a competitive advantage and value to competitors. IKEA' s value chain involves inbound logistics, operations, outbound logistics, sales and marketing and finally the services. The IKEA's value chain has three value sources which include the social economic and environmental. These core values lead to low prices, innovations either technological, leadership, and responsibility. What the sources of values may relate to customers' needs may originate from ethics, the value to provide good leadership and responsibility in society (Edvardsson, Enquist,& Hay, 2006). Also the values are co-created and can also be co-invented. IKEA's value chain is focused on achieving togetherness, care for the planet and the people. Caring for the planet is achieved by the company taking care of the environment and making a major positive impact on it.

Also, IKEA is cost conscious therefore making sure that many people can afford its products and services. Simplicity is another value and different products offered by the company. IKEA'' focus on customer value involves economic social and environmental. In economic the company ensures the pricing of commodities, For the company to achieve a competitive advantage, it provides manageable prices to its customers and not jeopardizing on the quality standards. Social is the focus on its people. Which is the development of the community and finally, on the environmental perspective, the company has to fulfill its responsibility to the environment. This also involves being accountable for the environment at all costs (Edvardsson, Enquist,& Hay, 2006). Also, the company through cooperate social responsibility may take up its responsibility towards participation on environmental protection. The focus of IKEA on these value chain process is to make sure that there is a smooth flow in all supply chain operations in the company.

Tangible and Intangible Products of IKEA

Tangible products are those physical resources in a company that can be seen physically and can be touched like materials. On the contrary, intangible products are those that have no existence in the physical; they may include human resources, patents, and labor. Intangible products provide services that have no physical existence. The IKEA's tangible resources include wood, waste, cotton, and food. These are the physical materials that the company uses to produce the end goods.

IKEA's intangible resources also include the human resources which are used to aid in the company's operation. The main aim of the IKEA offering intangible services is to make its customers to improve n their everyday life apart from just selling them furniture. Their way of making the customer have a good life was to lower the prices of the furniture so that they could be affordable to most of the customer (Czarniewski, 2014). This they offered as a service to increase their profit base. The company has also put its focus on the building of showrooms to offer the customer a chance to freely have a glance at what the company is generally offering. Additionally, the company also offers installation services to customers who purchase a product. Also, the company is offering delivery services.

Companies that need to erect barriers to entry of competitors always resort to adaptation to offering intangible products to its customers. They practice intangible services ranging from cost reduction strategy to attract more customers. Reduction of cost is made by companies to achieve a competitive advantage over other companies offering similar products. Also providing other services such as delivery and installation either as an after sale service or at a lower price. The companies that decide to adopt these services gain consumer trust, therefore, increasing on their profit base.

IKEA's main aim is customer satisfaction. The company is majorly concerned with offering best experiences that will make the customer get back to shopping with them. By IKEA focusing on its customers, means that the customer preferences come first in their concerns. IKEA has put its focus on convenience (Czarniewski, 2014). This implies that the sale of products is made convenient for the customer. IKEA achieves convenience by offering an online shopping store that is accessible from where the customer is located at. The company also offers delivery services to the customers. Offering customers convenience makes the company increase in growth regarding increased customers thus cumulating the profits. ALSO, IKEA focuses on addressing the experiences and choice of its customers. Through choice, the company offers different shopping methods including the e-commerce site. This reason attracts many customers, therefore, leading to an increase in the growth of overall profits.

Addressing customer needs about demand and supply and economic value. Lower prices increase the purchase of products from many customers. A reduction in the price increase the demand of the product. Since demand is directly proportional to supply, therefore the line of supply also goes up. However, at some point, the demand for a certain product of customer preference may rise more than its supply. This scenario may lead to higher demand more than the supply. Also, a company focus on customers means there will be an increase in customers thus the rate of demand for products will increase therefore overriding the supply of the products in the market.

Performance measures

Operating performance methods are measures that are intended to measure the various aspects of the performance towards the achievement of a company's co-values of operation. Performance, measures are most powerful in the hands of those who can influence the outcomes The IKEA has its major customer values on social, economic and environmental values (Schaltegger, & Wagner 2017). As the vice president of IKEA, I will carry out the performance measure on my managers to find out whether the values of an organization are being attained. My approach to measuring their performance will include a measure of efficiency, productivity, output, and profit. I will measure the rate of efficiency of my mangers by looking at the quality and frequency of the production in performance. The output is to be according to the social values of the organization. Whether the relationships that my mangers have with other employees are healthy and proves efficiency in their work.

Also, as a leader, I will measure performance on the productivity of my managers. The productivity measurement is to find out the number of sales that are done per day. This connects with the economic value of the company. Also performance measurement through profit. The profit made per month will inform me of how the managers are performing on their work. The profit which relates to the company's economic value will show the value of work that my managers are involved in IKEAS (Czarniewski, 2014). Another performance measurement that I will do on my mangers is measuring the rate of output. The output rate can be measured by the number of products available for sale. The products should also be environmentally friendly or should be able to conserve the environment. As a vice president for the manufacturing of IKEAs, I will ensure that there is constant inspection of my managers' performance.

In conclusion, IKEA is a Swedish company that is specialized in the manufacture and supply of high-quality furniture. Every company has its values that are based on the social economic and environmental benefits. Often the companies align their growth, competition and overall market strategies towards achieving the core value of the company's profile. IKEA has its plans that satisfy the wants of its custo0mers. Just like any other companies, the IKEA company has to create a clear position in the market. The market position was taken by a company to determine its level of competitiveness. The produced benefits both tangible and non-tangible can always be used as a strategy for the increase of the profit base. The supply chain of IKEA supports its value proposition. The main way that IKEA managed to gain its competitive advantage in the market is through its focus on customer feelings and level of satisfaction. The level of loyalty that IKEA has managed to build over the years in operation is outstanding. The quality of products produced by the company is high and offered at a lower price; this is an example of a growth strategy that has been adopted by this company.


Czarniewski, S. (2014). Building Customer Value in Relationship Marketing. International Journal of Academic Research in Accounting, Finance and Management Sciences, 4(4), 88-94.

Edvardsson, B., Enquist, B., & Hay, M. (2006). Valuesbased service brands: narratives from IKEA. Managing Service Quality: An International Journal, 16(3), 230-246. doi:10.1108/09604520610663471

Li, Z. (2010). The Competitive Advantage of IKEA and IKEA in China.

Schaltegger, S., & Wagner, M. (2017). Managing the business case for sustainability: The integration of social, environmental and economic performance. Routledge.

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