IKEA Case Study – Born in the Shadow of Conflict

IKEA Case Study

IKEA sees its origins in the town of Smaland, located south of Sweden. It was started in 1943 by a local lad, Ingvar Kamprad, who was a carpenter by profession. 

As with most entrepreneurs, Ingvar Kamprad’s vision began with a spark. The five-year-old’s entrepreneurial journey began by selling matches. 

At 14, Ingvar enrolled in a boarding school nearby. He kept a stock of pens, watches, wallets, and belts as they were in demand among his classmates. As he was too young to set up a business, his father gave consent and paid the registration fee as a graduation present.

IKEA is a combination of Ingvar Kamprad’s initials along with the family farm of Elmtaryd, and Agunnaryd, the farm’s parish in Smaland. But the 17-year-old IKEA founder wasn’t selling furniture yet. IKEA began to sell furniture five years later.

IKEA’s Business Model:

In 1956 IKEA’s inventory included flat-boxed furniture that allowed for assembly at home. The new range helped reduce shipping and labor costs and allowed easy transport to the customer’s home. 

The compact packaging meant that displaying them at retail outlets was an option. Thus advantage led to the opening of the first IKEA store in Smaland in 1958.

More IKEA stores followed, first in Europe and later in other regions. Currently, IKEA operates 300 stores around the world. IKEA stores are distinctive with their vibrant blue and yellow roofs in the colors of the Swedish flag. They stock more than 80,000 items and even have in-house Swedish restaurants.

Store Design:

IKEA stores are like large warehouses and are found outside cities. Increased urbanization and the popularity of e-commerce spurred IKEA to experiment with new formats. The introduction of pick-up points for online shoppers and small-format stores within city limits are examples. 

Target Market:

IKEA targets the middle class with its products. By ensuring its products are affordable and durable, it appeals to its customers. This facet of IKEA’s products is a driving reason behind its popularity. 

IKEA has adapted to the times and stocks contemporary designs that are a favorite with their customers. IKEA’s range of pocket-friendly products compliments its customer-friendly shopping experience. 

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Brand Localization:

Wherever IKEA went, it researched the taste and preferences in the local market. IKEA adapted its products and marketing strategies to local sensibilities, thus ensuring their popularity.  

Local culture influences everything from product design to catalogs when IKEA forays into a new market. The gambit of localizing their operations paid off and gained them a solid foothold in overseas markets. 

IKEA Revenue:

For two decades, IKEA’s revenue has been growing exponentially. From 10.5 billion euros in 2001 to 42 billion euros in 2021, IKEA has been a veritable success story. The only dip in revenue was in 2020, when like every other business IKEA too, was affected by the unforeseen events of the year. 


That is the story of how Ingvar Kamprad, the boy who grew up in the shadow of the great depression and WW2, began his journey by selling matches and grew to set up and oversee the rise of one of the most valuable firms today.   

IKEA is a successful brand in no small part due to its focus on quality and pricing. IKEA has paired these principles with exceptional customer service and engagement 

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