For most people, life is a constant struggle to strike a balance between quality, ease, and affordability in just about every aspect of living. Luckily, IKEA took care of striking that balance for you when it comes to furniture, and the world has rewarded them with a great deal of success.
Affordable and Simple
The IKEA business model isn’t all that complicated: it aims to bring high quality but affordable furniture to the masses. In this way, they hope to improve the everyday lives of all of their customers. IKEA is well known for their ready-to-assemble items, a system that allows them to keep costs down.
With products for every room of the house, plus items like appliances, pet products, home improvement items, and even outdoor flooring, IKEA has become a global powerhouse for anyone looking to spice up their home without busting their budget, particularly those who love a clean and modern aesthetic.
The Darling of Sweden
IKEA was the brainchild of a rural Southern Sweden man named Ingvar Kamprad, who was only in his 20s when he first began developing the IKEA model in the 1940s. His business was revolutionary in that the furniture industry had never explored the option of self-assembly.
By the 1980s, IKEA had begun expanding into new markets, like the United States and much of the rest of Europe, after the success of flagship items such as bookcases in the previous decade. The ‘80s saw the introduction of many new famous products that helped launch IKEA into international stardom.
Throughout the next few decades, the IKEA product lines expanded dramatically, as did their number of locations around the world. They adopted a sense of responsibility for the environment, and took on projects to ensure the company was conducting business in a sustainable way.
Now with more than 400 stores around the world, it’s difficult to conceive that IKEA was once just a dream of a young boy in Sweden.
As more and more stores move into the self-assembly furniture space, IKEA has an increasing number of competitors with which to contend. Massive chains like Walmart and Target offer some of these options, as do online retailers like Amazon. Of course, comparing IKEA with any of these stores is a bit of a false equivalency, since they all sell a vast number of items outside of furniture (which isn’t really their main offering).
Though these stores do pose a threat, a better gauge of IKEA’s success is comparing them with more similar companies. Among other furniture companies (most of which have been around for about as long as IKEA), IKEA is the most established and successful of these brands.
In a creative ploy for visibility, IKEA recently teamed up with National Geographic to create a series of videos on “endangered sleep” which will feature IKEA “bedroom habitats.” The ads will be a fun, if somewhat kitschy, way to inspire viewers to get a better night’s rest with IKEA’s help.
Of course, IKEA could use some good press after they issued a 2016 recall following the deaths of several children. A dresser they sold proved to be at risk of tipping over, but apparently the chain only refunded a fraction of those dressers once recalled.
It’s unclear whether this or some other issue led to IKEA’s drop on the Fortune 100 Best list for 2017, where they now ranked at 72 as opposed to the previous year’s rank of 63.
After an unlikely start and a wild ride to success, IKEA will need to work hard to stay competitive in this modern market.