Abstract

In 2002, IKEA was one of the leading furniture retailers in the world. IKEA offered a range of items - furniture, cookware, tableware, kitchen utensils, gadgets, textiles, bedding, cushions, shower curtains and paint. IKEA had emerged as a global player in one of the most highly fragmented industries in the world. In 2002, Interbrand ranked IKEA 44th on its list of the top 100 global brands, ahead of Pepsi and Harley Davidson. IKEA's business formula had been built around high-quality, Scandinavian design, global sourcing of components and knock-down furniture kits that customers transported and assembled themselves. IKEA's cost leadership strategy had enabled it to pass on to customers lower prices, anywhere from 25% to 50% below those of its competitors. The case explains how a new business model can change the rules of the game even in a traditional industry.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

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Keywords

Case study of IKEA, Furniture retailer, Low cost leadership, Furniture at IKEA, Cookware at IKEA, Kitchen utensils at IKEA, Textiles at IKEA, Case study of leadership, Management, Furniture hall, Ingvar Kamprad, Furniture information, Fragmented industry