This document provides an overview of IKEA, including its business, vision, mission, strategy, history, and PESTEL analysis. Some key points: - IKEA is an international home products company that sells ready-to-assemble furniture and home accessories. - Its vision is to create a better everyday life for many people. Its mission is to offer well-designed, affordable home goods. - It follows strategies of low prices, quality products, and flat-pack furniture packages for low-cost shipping. - IKEA has expanded globally since its founding in Sweden in the 1940s. It now has over 400 stores worldwide.

1. Didem ŞAHİN
Ahmet OCUK

2. IKEA’s Business
IKEA is an international home product company that
designs and sells ready to assemble furniture
appliances and home accessories
IKEA’s Vision
IKEA’s vision is to create a better everyday life
for the many people.
IKEA’s Mission
To offer a wide range of home furnishing items of
good design and function, excellent quality and
durability, at prices so low that the majority of
people can afford to buy them.

3. IKEA’s Strategy: Finding
Smarter ways to make
Furniture
Strategy followed by IKEA
Price
Quality

4. IKEA’s
Founded
Furniture
Introduction
Furniture Catalogue
IKEA TURKEY
2000s1990s1980s1970s1960s1940s1930s 1950s
IKEA designs its own
Furniture
IKEA introduces Flat
packages IKEA stores open at
• USA
• France
• England
IKEA’s Timeline
IKEA’s Company History*
*Source: www.ikea.com
Enterance to the new
market in
• Russia
• Japan
Signed a new partnership
with Maya Holding A.Ş

5. • I (Ingvar ) Founders first name
• K (Kamprad) Founders last name
• E (Elmtaryd) Farm where he grew up
• A (Agunnaryd) Home village

6. •IKEA’s political environment
is favourable. In Europe and
America, the political
systems have developed over
long time providing a very
stable environment. IKEA
does not operate in Africa
where most nations are not
politically stable.
Furniture
Market
Political
P
• Recession reduces disposable
income and hence the
demand (Low prices
advantage)
• Enjoys economies of scale
• High barriers of entry for
competitors due to low prices
offered to consumers
• Economic crises in Russia has
also effected Turkey’s
economy.
Economic
E
• Changing with social
trends
E.g. Many people associate
Sweden with a fresh
healthy way of life. This
Swedish lifestyle is
reflected in the IKEA
product range. The
freshness of the open air
is reflected in the colors
and materials
Social
S
• Innovative designs
• 3D mobile catalogs for
the customers
• Flat sized packaging
• Lots of assembling
videos on youtube
Technological
T
PESTEL Analysis
• Labor laws
• Taxes and duties
• Environmental Laws
• Lesser carbon
footprints
• Ecologically
sustainable
• Recyclable products
• Online tips on
reducing
environmental
impact (CSR)
Legal
Ecology
E
L

7. Competitive Analysis of IKEA
Comparing Chart of IKEA and It's Current Rivals
Name of the Company Number of stores Number of Employees Number of Product Variety Market Share Growth Targeting Plan Current Revenue
29000 employees More than 40000 products. 7%
Targeting to grow 100%
by using franchise
model in Mediternian
and Ege Areas.
235,76 million
euro
37 stores in 19 Turkey
cities
More than 3000
employees More than 40000 products. 45%
Targeting to open min.
5 stores in every year.
Approximately
1000000 TL
revenue.
Has 2000 employees in
Turkey Stores and
10000 employees in
other country's stores 12000 kinds of products. N/A
Targeting to grow 10%
in 2015 25,17 billion euro
87 stores in Turkey
More than 500
employees
3500 different kinds of
products Under 20%
Revenue target is 110
million TL 100 million TL
91 stores in Turkey
and 9 stores in the
other countries. 1200 employees
40000 different kinds of
products 5%
Targeting to increase
number of stores to
120. 120 million TL
27 tepe home stores
,12 Tepe Kitchen ,10
Tepe Furniture sellers
in Turkey
Approximetely 1750
employees 40000 kinds of products 25%
Revenue target is 184,7
million TL 168,3 million TL
13 stores in Turkey
and 8 stores in other
countries.
Approximately 800
employees
25000 different kinds of
products 11%
Targeting to grow 40%
in 2015 120 million TL
4 strores in Istanbul 22 employees
5000 luxury furnitures and
import furnitures 1%
Targeting to increase
number of stores to 18. 60 million TL
34 stores in 17 cities
in Turkey
More tahn 150
employees 14000 kinds of products. 14%
Targeting to increase
market share to%20 2500 million TL
22 stores in Turkey 363 employees 500 kinds of products. 10%-15%Targeting to grow 60% 120 million TL
244 stores in 43
different countries
More than 13000
employees
Approximately 311000
different kinds of products 30%
Targeting to be the
third big Furniture
Company in the world. 5,8 billion TL

8. Potential Rivals
• Porta Möbel: One of the IKEA’s international rival determened to enter
Turkish Market with the partnership of Bodyak Holding.
• Walmart is the most serious rival for Ikea .At the same time a new maket
research for Tukey market is performed by Walmart.
• Conforama is a France orijined firm which is a strong rival of Ikea in
Europe, is deceded to open a new store in Istanbul Umraniye.
Substitues
– There is no specific product that can be a substitute for
the furniture but IKEA at least, have to keep up with the
latest trends, to avoid becoming out of style
– Problems faced due to distribution channels

9. Threat of Buyers growing bargaining power
– There is a little power because of the existing low-price options
– IKEA ensure that their customers in all aspects will be satisfied for quality
service they provide
– Focused their marketing approach on demands and needs of the buyer
– IKEA uses their corporate responsibility as a good public image to their
customers
– IKEA Family -card as a membership
– IKEA uses pull strategy to the customers.
Threat of Suppliers growing bargaining power
IKEA has its thousands of suppliers that set standards in delivering the materials
Because of the low-pricing, IKEA’s profit margin also affects the prices in raw
materials than by prices in labour
IKEA has a wide network of 1300 suppliers. They carefully select the
manufacturer of its products. The company has own production factories and
designers which makes it less dependent on others
Bargaining power of supplier could be threat for the profit of the company

10. DEMAND ANALYSIS
According to the some researches in Turkey,
Local furniture producers give affordable prices
to their customers, but they have limited
options and demonstration capability. IKEA
differs itself with their highly wide range and
colorful options and also aims to upper level
status with average and low income level
people. And this is an exception for Turkey in the
world.

11. INTERNALEXAM
EXTERNALEXAM
SWOT
W
O
T
S
STRENGTHS
• Wide range of products and styles
• Cheap and affordable
• One stop shop
• Easy shipping and transportation
• Eco friendly and recycling of
products
• Functional design of products
• Appealing shopping experience
OPPORTUNITIES
• Untapped markets like middle east
and Asian countries
• Better advertisements
• Online sales
• Demand for greener and
environment friendly products
• Conforama Company which has 3.3
Million Euro revenue abandoned
Turkey Market in one year.
WEAKNESSES
• Assembly of furniture
• Yet to invade upcoming global
markets
• Products don’t last long
• Product dimensions unsuitable for
global markets
• Advertisements in the form of
catalogues mostly
THREATS
• Organized sectors like Masko and
Mobesko Furniture
• Unorganized sectors like local
manufacturers and carpentry stores
• Competitors opting for similar
designs with a contemporary twist to
cater to upper class
POSITIVE INFLUENCES
NEGATIVE INFLUENCES

12. IKEA
THE
BRAND
• Iconic
• Sensible

13. Segmentation (Hybrid Segmentation)
• Young and fashionable people (20-35 ages
range)(Demographic Segmentation)
• Targeted middle class customers (
• Lovers of modern furniture and
accessories.(Behavioral Segmentation)
• Colorful and novel products

14. TARGETING
• They are aiming to appeal to people of all ages, sexes,
geographic, locations, all who have one thing in common:
Price preference.
• In Turkey, Single and who have High Income Level people
• Married and have Average Income Level couples
• Who likes simplicity and functionality together in every age

15. POSITIONING
A. Cost Leadership
B. Shopping Experience
C. Swedish Design Functional and Simple

16. • Low-cost modular ready to assemble furniture
• Get it delivered for a fee or by yourself
• Employees are trained to save electricity
• Fly in economy class
• Take buses instead of taxis
• Expensive wood is used only on top visible layers of the furniture
• Suppliers are chosen from a pool of 1800 to maintain cost leadership

17. B. SHOPPING EXPERIENCE
• Displays every products in rooms
• Give a message ‘’You Don’t need a decorator, you can get a
harmony in your flat just like that’’
• The Swedish Restaurant (as popular as its furniture) serves to
people who walk through 25.000 sq m. (average space of IKEA
store)
• Customers move along a predetermined path through a maze of
rooms aligned to its customers who are young but not wealthy

18. C. FUNTIONAL&SIMPLE
• Design is the last step, after choosing the price point
and manufacturer, in the process
• Designers mainly focus on simplicity and
functionality in IKEA

19. COMPETETIVE ADVENTAGE
• Low price and good quality more than competitors
• Good service
• High quality of design
• Wide varieties

20. BCG Matrix for IKEA
• Textile products were investigated to be an
example for BCG Matrix:
• Ikea’s Textile products are question mark on
BCG Matrix because of the strong rivals like
Linens etc.Decision is investing to make them a
star.

21. ANSOFF GROWTH MATRIX
• IKEA uses market
penetration strategy for
it’s current products.
• By the decision of
selling food and
openning restaurants
inside the store they
used conglomerate
diversification.
• By entering Turkish
Market Ikea used
Market Development
Strategy.

22. 7P's Marketing Mix
Marketing
Mix
Product
Price
Placement
Promotions
People
Physical
Evidance
Process

23. PRODUCT
• Flat sized packaged boxes
• Basic assembling guideline
• Modular storage
• Easy to assemble
• Food, with a European touch
• In-store restaurant
• Product extends to service
• Excellent Sweedish design
• Using different types of wood for a
single wooden product
• High quality materials on furniture
surfaces
• All IKEA products come with a 2 years
everyday quality guarantee
• Same day shipping with the online
shopping
• Sewing service for textile products
• Flexible return policy
• Has 24 hours open call center for
any questions. (444 0 532)

24. Product Line
• Bathroom
• Laundry
• Bedroom
• Lighting
• Children's IKEA
• Living room
• Cooking
• Secondary storage
• Decoration
• Small storage
• Dining
• Textiles
• Eating
• Workspace
• Hallway
• Youth room
• Kitchen

25. Reverse positioning
strips away “sacred”
product attributes
while adding new
ones.
“IKEA … innovative
marketing and
phenomenal growth …
brilliant reverse
positioning.”
PRODUCT
LIFE CYCLE

26. Product Price Mix (TL)
STYLE
PRICE
RANGE
Scandinavi
an (Sleek
Wood)
Modern
(Minimali
st)
Country
(Neo-
traditiona
l)
Young
Swede
(bare
bones)
High
Medium
Low
IKEA's Product Price Matrix
Pricing Strategy: Market Pricing

27. PRICING STRATEGY
Prices as low as $2.99 advertised

28. PROMOTION
• High profile advertisement campaigns
• Spending 70% of annual marketing budget in printing catalogs.
• Online shopping.
• Ikea providing home delivery service to its customers
• After sale service to the customers.
• Online advertisements.
• Mini designed homes in the stores
• Sale compaignies in winter and summer times.
• Kitchen planner tools (Design your own kitchen before you go)
• Gift cards for the friends.
• Ikea family card obtains discount. (Customer loyalty programme.)
• Advertising by using WOW

29. IKEA GUERILLA MARKETING IN
MANHATTAN

30. PLACE
• The vast majority of Ikea Stores are located out of city
center in Europe because of land costs and traffic
problem.
• There are 5 Ikea Stores in Turkey and most of them
located near Shopping Malls.
• The cities are:Istanbul-Bayrampasa,Ankara,Istanbul-
Umraniye,Izmir and Bursa.
• We can easily say that it’s an advantage for Ikea because
of the dense of population.
• Distribution Channel: Direct and Selective
• Distribution Channel for Online Shopping:Direct and
Intensive

31. Augmented Services

32. Customer Experience at IKEA
• Bright and inviting store atmosphere
• Resembles Modern Theme park with childcare centers
• Restaurants serving various delicious meals.
• One stop shopping experience
IKEA for kids: You shop, kids play
• IKEA provides clean feeding and changing rooms for small
children
• Restaurant has a special menu just for kids
Free parking place
IKEA without barriers
Free wireless internet access
PHYSICAL EVIDANCES

33. PEOPLE
• Knowledgeable and friendly staff.
• Technical support from experts.
• Design advice department
• Personal Selling Team (Staff and Other Customers)
• Ikea is a place where the people socialize with each other
PROCESS
The furniture is made by IKEA itself whereby IKEA makes its own
wood-based furniture and wooden components. So for example
the business owns forestry sawmills.
The customer drives to the store, selects a product, orders, it, and
then collect it, only then to have to drive the product home
themselves. This is all part of the low pricing commitment.

35. CONCLUSION
• IKEA is the biggest retailer furniture
company in the world.
• With their wide range options, they
want to reach as possible as more
people’s home.
• Additionaly ,Ikea is the biggest
catagory killer in the world. There is
no company to dare with them.

36. SOURCES
1. IKEA (2013). About IKEA. Available at:
http://www.ikea.com/ms/en_GB/about_ikea/index.html
2. The Times 100 (2012). Business Case Studies. Ikea case study. Available at:
http://businesscasestudies.co.uk/ikea/swot-analysis-and-sustainable-business-
planning/strengths.html#axzz2VB9TPpjz
3. Interbrand (2012). Best Global Brands in 2012. Available at:
http://www.interbrand.com/en/best-global-brands/2012/Best-Global-Brands-
2012.aspx
4. Wikipedia (2013). IKEA. Available at: http://en.wikipedia.org/wiki/IKEA
5. http://kevinrjohnson.weebly.com/uploads/5/6/3/7/5637086/marketing_paper.pdf
6. http://shazeeye.com/value-proposition-and-positioning-ikea-case-study
7. http://www.milliyet.com.tr/fransiz-conforma-turkiye-yi-
terk/ekonomi/detay/1842760/default.htm
8. http://www.milliyet.com.tr/ikea-nin-alman-rakibi-turkiye-ye-
geliyor/ekonomi/ekonomidetay/25.03.2011/1368892/default.htm