Analysis Of IKEA as a Global retailer

Analysis Of IKEA

IKEA has always been considered as a fine example of a global retailer that employs a standardized approach in every market it pursues. This standardization is seen in four areas of its marketing activities namely the merchandise they deal in, how the stores are located and store format, their selling and service provision environment, and how they conduct their market communication.


The furniture industry has for a long time been operated in a localized system whereby the players involved have always dealt with the domestic market only. However, IKEA global reach has made it successful in adopting an ethnocentric approach. This has been made possible through the company’s style of shipping unassembled parts of furniture to different parts of the world. This aspect not only enables IKEA to have a global reach but also cuts down on costs considerably.

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Location and store format

With over two hundred outlets worldwide, IKEA is a giant furnishing retailer that can be found in over thirty-two countries mostly in Europe, the United States, Asia, Australia, and Canada. Currently, IKEA has stretched its reach in as far as China and India. IKEA stores in all these distant locations have an almost similar design of large blue boxes that characteristically have few windows. The design is aimed at creating a mandatory one-way layout that ensures that customers have to traverse almost every area in the store before reaching the checkout stands.

Selling and service environment

The company offers a wide variety of products that aptly fit with the furniture demands of every home. Its departments cover all areas of furniture including living rooms, bedrooms, kitchens, bathrooms, cooking, decorating, dining, textiles, and, of great significance, the children’s IKEA department among many others. In its pursuit of providing value for the customers, the company deals in high quality products that meet the demands of a global customer base.

Market communication

As stated in its vision, IKEA seeks to create an improved everyday life of people. This is the idea that the company’s marketing communication is based on. The company aims at establishing a relationship with its customers as shown by its advertising campaign. With various outside the stores, IKEA is able to effectively communicate with clients far and wide. These channels include the IKEA catalog developed in Sweden, IKEA websites, advertising, brochures, and good public relations among others.

IKEA in the United States

IKEA stores in the United States have been described as outlets that not only offer products but experiences as well. Their products are not only conveniently made for domestic use and rigid in structure but also involve the customers in the assembly process. This assembly experience has made them quite popular in international locations like the United States where many people take pride in basic expertise in home maintenance areas like plumbing and fixing home furniture. IKEA continues to maintain high quality products in all the countries it operates its outlets in.

The layout of the store format in IKEA outlets in the United States is designed to take the consumer through furniture showrooms where there are house-ware displays, and a warehouse of ‘flatpack’ products before getting to the cashier. This unique design creates an advantage of making the customers view products they might have otherwise have failed to see while shopping. However, to avoid inconveniencing shoppers out to look for specific products, shortcuts have been created in the stores. There are other services offered like Swedish food restaurants.

The selling and service environment IKEA has developed in the United States revolves around the creation of a fascinating and exotic store. IKEA stores are opened seven days a week all over the US in a bid to create time for every visitor. The stores always draw customer from out of state in many US cities leading to an increase in sales tax revenues. A major feature in IKEA stores are the traffic congestions that usually build up on all roads that lead to the stores. An example is the 1999 opening of the Emeryville, California opening of the IKEA store that created traffic congestion that was so severe that rendered traffic lights useless. For three months Emeryville police had to manually control traffic. The same case also happened in Tempe, Arizona in 2004.

For its marketing communication in the United States, IKEA uses several means like advertisements, its websites, and public relations but its most effective marketing instrument has always been its catalog. The catalog is international and is translated into over 40 languages and can be found in most American homes.

Figure 1. Examples of an IKEA catalog.

                              From: IKEA Marketing Strategy by Maguydayle May 3, 2005. Retrieved November 25, 2010, from

IKEA human resource policy for non-Swedish locations follows a similar pattern in all the countries the stores are located. The aim has always been to focus on similarities between all the locations and to have an effective provision of support and guidelines from the central management. This structure is not aimed at imposing policies but as a way of providing guidelines and business coordination.

This centralized human resource policy not only supports the corporate culture at the executive level but is also effective in managing IKEA’s decentralized approach in-store management. IKEA’s human resource policies provide a central philosophy for all human resource management activities without prescribing specific HRM procedures on each store (EWC Case studies, 2005). This then means that every store can hire local nationals for non-managerial and managerial positions. The company does not have to relocate Swedish nationals to fill positions in its international locations.

IKEA’s vision is “To create a better everyday life for the many people” includes its employees as well (IKEA). Its human resource philosophy recognizes the fact that employees become more committed and productive when the company is also committed to their needs. In this regard, the company promotes employee empowerment through standardized policies that are applied uniformly in all its international locations. This, therefore, makes it irrelevant to fly in Swedish employees in non-Swedish locations to work under conditions similar to those in Sweden. Hiring locally also has the advantage of tapping into the local culture and integrating the stores in the local community (Farndale & Paauwe, 2005).

IKEA recognizes the fact that different employees have uniquely different needs. For example, in the late 1990s the human resources at IKEA North America were Ms. Spears-Lopez who recognized the need for having human resource policies that matched individual employee needs. She felt there would be more benefit with more flexibility in administration. IKEA’s policies in North America are supported by a culture that promotes diversity and creativity among employees. She described IKEA’s culture as family-like and fostering strong and open relationships (Harzing & Ruysseveldt,2004).

In IKEA the emphasis has always been on human resource sharing knowledge between the employees and line managers. With IT-based tools, the exchange of support information is easily achieved in a global human resource set up. In its value-driven approach, IKEA has successfully managed to substitute a global human resource with a strong corporate culture in all the company activities.


Maguydayle. (2005).  IKEA Marketing Strategy. Retrieved November 25, 2010, from  

Farndale, E. & Paauwe, J. (2005).The Role of Corporate HR Functions in MNCs: The Interplay   Between Corporate, Regional/National and Plant Level. Visiting Fellow Working Papers.     Paper 12. Retrieved November 25, 2010, from  

IKEA Video. (n.d). Retrieved November 25, 2010, from      

EWC Case Studies. (2005). IKEA. Retrieved November 25, 2010, from  

Harzing, A., & Ruysseveldt, J. van (Eds.) (2004). International human resource management       (2nd ed.) London: Sage.






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