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ID : 5279953| Sep 2020| 20 pages


Business Sector :Retail (Furniture)

Operating Geography :Europe, Sweden, Global

About IKEA :

IKEA is a Swedish multinational retail giant that specializes in ready-to-assemble furniture, kitchen appliances and home accessories. IKEA, started first from Almhult, Sweden, it was founded in 1943 by Ingvar Kamprad, and currently has presence with over 430 stores across 50+ countries. The Company started off as a mail order sales business, which soon moved into selling furniture before opening its first physical store in Smaland in 1958 and thereafter expanded aggressively into Europe and other countries. Currently headquartered in Leiden, Netherlands, it is one of the world’s largest furniture retailers. IKEA is an acronym standing for Ingvar Kamprad Elmtaryd Agunnaryd, acquired from the initials of its founders and hometown. Today IKEA Co. has a global presence by providing franchises to companies and (or) individuals, with franchisee operations spread over 29 countries.
In Europe, Romania has the highest potential for IKEA Company, and it plans to have 9 stores in that region, which is the highest number so far.
IKEA Group’s vision is "to create a better day to day life for maximum people" and IKEA’s Mission is "to be able to provide great designs and huge range of home furnishing products at the lowest price possible so that maximum people can afford to buy them”. The USP or Unique Selling Proposition of IKEA is that they promote D.I.Y or Do It Yourself culture, by supplying ready to assemble furniture which can be easily constructed by a commoner or non-professional. This is how IKEA manages to cut down the cost and adhere to their vision and mission statements and give customers great value on every purchase they make.

IKEA Revenue :

EUR 24,945 million - FY ending 31st August, 2019 (YoY growth negative 2.2%)
EUR 25,516 million - FY ending 31st August, 2018

Ownership / Major shareholders :

The Dutch-registered Stichting INGKA Foundation is named after Ingvar Kamprad which owns INGKA Holding BV, the parent company for all IKEA stores. Feodor Ingvar Kamprad was a Swedish business magnate and the founder of IKEA. Most of IKEA's stores and factories were previously owned by INGKA Holding B.V., a holding company controlled by the non-profit Dutch foundation, Stichting INGKA Foundation, one of the 40 wealthiest foundations in the world. Inter IKEA and Interogo Foundation was established during the 1980s to secure independence and longevity of the IKEA Concept. Interogo Foundation is the ultimate owner of Inter IKEA Group, including Inter IKEA Systems B.V., the worldwide IKEA franchisor and owner of the IKEA Concept.

Competitive Analysis of IKEA


The SWOT analysis for IKEA gives insight about company’s strengths, weaknesses, opportunities and threats. SWOT analysis is a method of understanding the key internal and external factors that affect the company. The internal analysis illustrates that the D.I.Y. or Do It Yourself concept of assembling the furniture is a major strength of the company, as it minimizes the overall cost involved in manufacturing of furniture. That’s exactly why IKEA furniture is comparatively cheaper, bringing in competitive advantages. IKEA’s key performance indicators are the right usage of raw materials; focus on use of renewable materials and most importantly keeping great design products affordable yet never compromising on quality. IKEA's practice of offering high product quality at low prices is a part of IKEA's veritable strategy and key component for driving sustainable business growth. One of IKEA’S weaknesses is that their store designs needs to be lavish, because IKEA has approximately 10,000 products per store, and this requires high lead time to set up new stores. While DIY concept continues to be IKEAS’s strength it also has some adverse effects on the company. For instance in some Asian countries DIY culture has not interested the masses, leading to a very low or absolutely zero demand of IKEA furniture which is a clear threat to the company. However IKEA is setting up its stores in India and Serbia in 2018 and this is an opportunity as it can expand its base in other developing countries and emerging markets.

IKEA’s major competitors are rent based furniture or ecommerce platforms offering ready-to-use furniture, as they give IKEA high competition in terms of cost and contradicting concept of business model. These rivals are more likely to create adverse impact on people by creating a negative impression about DIYIKEA strategy when ready-to-use is available and can hurt IKEA’s USP posing an open challenge and a major threat to the IKEA Co. An insightful study of the internal and external analysis of IKEA, gives a neat picture about IKEA's business case and strategy.

1. Global brand reputation for low-cost sleek furniture
2. Vast and numerous networks of ultra-modern stores
3. Integrated approach to manufacturing and supply chain
4. Strong revenue growth and profitability
1. Stores located away from city centers
2. High lead time for planning of new stores
3. Standard product portfolio across the globe
4. Controversies regarding safety and durability of furniture
1. Expansion to emerging economies with potential for low-cost manufacturing
2. Exploring locally sourced raw materials
3. Popularity of e-commerce and pick-up formats
1. Competition from e-commerce and furniture rental services
2. Entry barriers, laws and regulations in unexplored markets
3. Price wars and diversification strategies of competitors
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Detailed SWOT Analysis of IKEA



1. Global brand reputation for low-cost sleek furniture: IKEA is one of the most successful global retailers and also a powerful brand featuring in Forbes Top 50 World's Most Valuable Brands. It is known globally for its low-cost, easy-to-assemble furniture that appeals to young middle-class families aspiring for stylish homes. It also focuses on sustainability, innovation and being at the lower-end of the spectrum it strives and succeeds in exceeding customer expectations and achieving customer delight. With continuous focus on innovations in architecture and interior design IKEA group has also established foundations of design and research to come up with better and better innovations in various areas, including interior design.

2. Vast and numerous networks of ultra-modern stores: IKEA has over 433 stores operated by 11 franchises in over 50 markets, with full-fledged displays, machine-controlled silos and additional facilities such as child-care area and restaurants as of Aug 2019. IKEA stores also have the reputation of having the longest average opening hours per day.

3. Integrated approach to manufacturing and supply chain: With continuous improvements and integrated design methodology, IKEA has succeeded in establishing a closely-knit, cost and energy efficient supply chain. IKEA’s furniture which is such uniquely designed that it can be sold in pieces which the customer can assemble. The pieces are placed in flat packages which help in efficiency and space optimization during transportation and helps in saving costs. IKEA has also directly invested in resources for establishing an independent source and strengthening its supply chain. A notable example is its ownership of 74,700 hectares of forest in Romania and other Baltic countries which helps it with a sustainable supply of wood. Moreover, it has acquired the Forest Stewardship Council (FSC) certification for its forests since FY16.

The remaining section of “Strength” is available only in the 'Complete Report' on purchase.


This section is available only in the 'Complete Report' on purchase.


This section is available only in the 'Complete Report' on purchase.


This section is available only in the 'Complete Report' on purchase.

Major Competitors :

1. Ashley Furniture 2. American Furniture Warehouse 3. Walmart 4. Target 5. Home Depot 6. Lowe’s 7. Amazon 8. TESCO 9. Sears

Major Brands :

Duktig, Oslo, Billy, Dinera, Kassett, Effektiv, Skarpt, Jerker, Fukta, Fartfull, Lyckhem, Faktum /Akurum, Smaland

Key Business Segments / Diversification :

FurnitureSmart Homes Houses and Flats Solar PV Systems Family shopping centers
Virtual mobile phone networkRestaurant and food marketKids play area

Recent Acquisition / Mergers / Alliance / Joint Ventures / Divestitures :

Open Table Preview
Business Segment
Objective/Synergy Achieved
TaskRabbitFreelance Job platform2017AcquisitionBy acquiring TaskRabbit, Ikea is giving its customers an opportunity to hire someone through TaskRabbit who can assemble their furniture so they can save themselves the struggle to assemble it themselves as many a times customers find the "simple" diagrammatic explanations not so easy to follow and some of the screws and nails go missing or the piece falls apart after being incorrectly assembled. The deal also permits Ikea to foray into the gig economy and ramp up its technological capabilities.
Inter IKEA Holding BVFurniture retailer2016DivestureThe IKEA Group sold subsidiaries to Inter IKEA Holding BV for 5.2 billion euros ($5.58 billion), a company based in Delft in the Netherlands. This will help them in concentrating on pure retail business and it is also gives a benefit from a taxation point of view.
Ox2Swedish wind power company2016AcquisitionIkea Group’s first wind power investment in the Finnish market, and the companies’ fourth joint project. The wind farm which previously operated with 10 wind turbines in Kemi was expanded to include 13 more to ramp up the estimated output to approximately 160 GWh per year, equivalent to the annual electricity consumption of around 32 000 households.
TCLElectronics2012Joint VentureThis is IKEA’s foray in the electronics market
Source: Company website and other reliable sources. The detailed table is available in the Complete Report.
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Check Out Analysis of Other Relevant Companies

The IKEA SWOT and PESTLE Analysis report will offer the following:
  • The SWOT and PESTLE analysis report of IKEA presents an understanding of the complex internal and external factors affecting the brand and its operations.
  • The report gives a brief overview about, IKEA’s history, founders, turnover, revenue and about who owns IKEA.
  • The SWOT and PESTLE report helps track key facts like, market value, market segmentation, diversification, mergers and acquisitions etc. about the IKEA Co.
  • The SWOT analysis report covers all the factors that describes the major strengths and weaknessesof world’s largest furniture retailer IKEA
  • The report lends intelligence on the external analysis, comprising the opportunities and low hanging fruits which can be harvested to achieve international growth and expansion. It also talks about some pertinent threats to the company that threatens to impede growth.
  • The analysis also shows appreciation in share price of IKEA Co.
  • Gives insight into IKEA's DIY strategy and business model that has helped it to has been a successful pioneer brand in providing ready to assemble furniture.
  • Interpretation of IKEA’s USP which has created the D.I.Y. Culture amidst its audience and has set a benchmark in the furniture industry.
  • Core competitive advantages enjoyed by IKEA group over its peers and competitorsin the furniture retail industry
  • Insights about micro and macro factors through internal and external analysis
  • In depth understanding of the effect of all external factors like, political, economical, social, technological, legal and environmental, on the operations of IKEA group.
References used in IKEA Analysis Report

1. Annual Report-

2. Revenue-

3. Competitors-

4. Ikea Counts Costs of Brexit-

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SWOT & (2021). IKEA SWOT & PESTLE Analysis - SWOT & [online] Available at: [Accessed 04 Mar, 2021].

In-text: (SWOT &, 2021)

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IKEA SWOT and PESTLE analysis has been conducted by and reviewed by senior analysts from Barakaat Consulting.

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