Table of Contents:

1. Introduction-------------------------------------------------------------------3
2. About--------------------------------------------------------------------------4
3. Market Overview------------------------------------------------------------9
4. Product Mix-----------------------------------------------------------------12
5. Segmentation, Targeting, Positioning Strategies-----------------------13
6. Swot Analysis---------------------------------------------------------------17
7. Marketing Strategies--------------------------------------------------------18
8. Recommendations for Indian Furniture Industry-----------------------20
 Introduction
The furniture and home decor industry have witnessed a significant transformation in recent

years, largely driven by the emergence of e-commerce platforms that offer consumers

unprecedented choices, convenience, and accessibility. IKEA, a SWEDEN-based furniture

and home decor retailer, has emerged as a prominent player in this evolving landscape with

it’s online and offline presence across the globe. This report aims to provide an in-depth

analysis of IKEA's product mix, segmentation strategies, targeting approaches, and

positioning in the market.

As consumers increasingly turn to online & offline

channels for their furniture and home decor needs,

IKEA has strategically positioned itself to cater to a

diverse customer base with a wide range of products.

Understanding the unique characteristics of

IKEA’s product mix is crucial in comprehending how the company

effectively caters to the needs and preferences of its customers.

Additionally, the report delves into IKEA's segmentation strategies,

examining how the company divides its market into distinct customer groups based on

various criteria.

Moreover, this report sheds light on IKEA's targeting strategies, illustrating

how the company selects specific customer segments to focus on and tailor

its marketing efforts. Lastly, it explores IKEA's positioning in the market, dissecting

how the company positions itself to create a distinct and compelling identity in the minds of

its target customers.

 By examining these key aspects of IKEA's business strategy, we aim to gain valuable

insights into the company's approach to staying competitive in the dynamic world of offline

and online furniture and home decor retail. This analysis will not only provide a deeper

understanding of IKEA's operations but also offer insights into the broader trends and

challenges facing the industry.

About
IKEA is a Sweden offline & online marketplace for furniture and home décor which
provides ultimate experience to the users. The company was founded in 1943 by Ingvar
Kamprad, and is headquartered in Netherlands, Europe. The group is primarily known for
its modernist furniture designs, simple approach to interior design, and its immersive
shopping concept, based around decorated room settings within big-box stores, where
customers can interact with products onsite. In addition, the firm is known for its attention to
cost control and continuous product development, notably, the ready-to-assemble model of
furniture sales, and other elements which have allowed IKEA to establish lower prices than
its competitors. It has 3 stores in India till 2024.

IKEA is one of the leading offline and online furniture retailers in India and has been credited
with helping to revolutionize the furniture shopping experience in the country. The company
offers a wide range of services to its customers, including free delivery, easy returns, and
in-store shopping experience. IKEA also offers a variety of financing options, making it easy
for customers to purchase furniture and home décor items.
In addition to its offline presence, IKEA also has an online presence. The company's
experience studios allow customers to browse and purchase furniture and home décor items
in person. IKEA's experience studios also offer a variety of services, such as interior design
consultations and home styling assistance.

IKEA is a leading player in the Indian furniture and home décor market, and is
well-positioned for continued growth. The company has a strong brand presence, a wide
range of products and services, and a growing offline presence.

Some numbers related to the brand:

Fig: Company financials

 Fig: IKEA’s Revenue growth over years

Fig: Customer diversity

Rise of IKEA

In 1943, then-17 year old Ingvar founded IKEA as a sales business related to mail-order
and began to sell furniture after 5 years. The first store was opened in Älmhult, Småland.
The first stores apart from Sweden were opened in Norway and Denmark in 1960s which
was quite successful as it was the original and new concept to the people. IKEA further
expanded in different parts of the world in 1980 like the USA, Belgium, Germany,
France, Spain with 55 stores making it one of the greatest achievements of IKEA. It
entered America in late 2000s, opening in Dominican Republic, Mexico city and also in
INDIA opening in Hyderabad. Now they also have stores in Mumbai and Bengaluru. The
company aims at opening new stores in many more countries for the expansion all over
the globe.
Initial Challenges

IKEA encountered issues concerning the integrity of its wood supply chain, with reports of falsified
documentation about the origins of the wood used in its products. This controversy underscores the
difficulties of maintaining a balance between cost-efficiency and ethical, sustainable sourcing practices
IKEA encountered issues concerning the integrity of its wood supply chain, with reports of falsified
documentation about the origins of the wood used in its products. This controversy underscores the
difficulties of maintaining a balance between cost-efficiency and ethical, sustainable sourcing practices.

Innovative Solution

To address this, the company implemented a thorough due diligence system with regular audits to
ensure legal and sustainable sourcing. When non-compliance was detected, IKEA promptly ended
relationships with the offending suppliers. It has committed to sustainable sourcing, aiming to become
circular and climate-positive by 2030. This goal involves close collaboration with suppliers to meet
strict environmental and ethical standards, enhancing the sustainability of its entire supply chain.

Some of the solutions being taken care by IKEA are –

Renewable Energy: Ikea is investing in Wind Energy, Solar Energy aiming to become climate-
positive by 2030. In FY’23 IKEA was able to contribute to 22% reduction of carbon footprint
compared to FY’16.

Customized Logistics: Understanding the complexities of delivering furniture, IKEA set up

its own logistics network. This ensured timely and safe delivery of products.

Alternative Packaging: IKEA’s phase out packaging technology is quite astounding as per the recent
audits conducted.

Growth and Expansion

The IKEA Group operates in 43 countries, with 315 stores across 27 of them. In 2014, IKEA Group
stores welcomed 716 million visitors, while their website saw over 1.5 billion visits, marking a 15%
increase from the previous year. IKEA offers a product range of approximately 9,500 items, launching
around 2,000 new products each year. The company has 12 in-house designers and 60-70 external
designers working on contracts. IKEA’s strategy of continuously lowering product prices became key to
sustaining its growth, transforming this approach into a hallmark of its success. They carefully assess
production costs before starting any project, allowing them to offer high-quality products at lower prices
by keeping production expenses minimal.

In response to the 2008 global recession and rising costs, IKEA re-evaluated its strategies, doubling
down on price reductions to ensure long-term growth. Customers continued to enjoy the same quality
products at reduced prices, made possible by IKEA’s thorough research and removal of unnecessary
production costs. Unlike other companies that reinvest a smaller percentage of savings, IKEA reinvested
100% of its savings into key business areas, allowing them to sustain low prices. This approach, even
during the economic downturn, helped the company maintain a 10% year-to-date growth rate. Prior to
the recession, IKEA's profitability was strong across most markets, with less focus on cost
inefficiencies. However, despite the economic challenges, IKEA upheld its customer-centric philosophy,
refusing to cut back on employee-related expenditures. Instead, it focused on reducing negative cost
factors in its operations, enhancing its pricing strategy and gaining goodwill and market share.

Competition and the future

As the e-commerce market in India grew, IKEA faced stiff competition from other players
like Pottery Barn, Walmart, and Ashley. However, with its strong brand identity and
customer-centric approach, IKEA continued to hold its own.

Today, IKEA stands as a testament to the potential of specialized offline and online
platforms and the power of understanding urban market needs.
 Market Overview

Indian Furniture Market

The Indian furniture market has witnessed significant growth over the past decade, influenced
by urbanization, rising disposable incomes, and changing lifestyles. As of my last update in
2023, the market is a mix of organized and unorganized sectors, with the latter holding a
considerable share. However, there's a visible shift towards branded furniture, spurred by
increased awareness and demand for quality and design.

Fig: Marketing channel overview

Fig: Social Media Network Distribution

KEY market Drivers

Fig. Key Market Drivers

Fig: IKEA’s Technology Stack

Buying Patterns

Fig: Buying Patterns

Challenges

Fig: Challenges
Product Mix
The home furniture company offers a diverse range of products designed to cater to different
segments of the market. The product mix ensures there's something for every customer,
irrespective of their taste or budget.

- Living Room Furniture: Sofas, coffee tables, TV Stands, Bookshelves.

- Bedroom Furniture: Beds, Side-Tables, Wardrobes, Dressing Tables and Mirrors.

- Dining Room Furniture: Dining tables, Chairs, Cabinets and Bar Stools.

- Outdoor Furniture: Patio sets, Hammocks, Garden Chairs and Swings.

- Home Office Furniture: Desks, Chairs, Storage Cabinets and Shelving Units.

- Decor: Rugs, Lamps, Wall art and Vases.

Fig: Product Mix of IKEA

 SWOT Analysis
IKEA’s SWOT analysis evaluates the brand by its strengths & weaknesses which are the
internal factors along with opportunities & threats which are the external factors.

IKEA can leverage its strengths to exploit the opportunities and minimize the threats. For
example, IKEA can use its strong financial backing to invest in technology to improve its
logistics and reduce shipping costs. IKEA can also use its strong brand presence and
innovative marketing campaigns to differentiate itself from the competition.

IKEA also needs to be aware of the threats and take steps to mitigate them. For example,
IKEA can partner with established portals to increase its reach and visibility. IKEA can
also invest in educating customers about the benefits of online shopping for furniture.

Fig. SWOT Analysis

In conclusion, IKEA has established a strong presence in the Indian furniture and home
decor market, capitalizing on its diverse product range and innovative marketing
strategies.
However, it faces challenges from both people like old aged and of older thinking still tends to buy
from their brands like Nilkamal etc and also from emerging online platforms like Amazon, Flipkart etc.
To maintain and strengthen its position, IKEA should focus on enhancing its online shopping
experience, expanding its product range, and exploring new partnerships and collaborations.