External Factors that have Impacted the Marketing Mix of IKEA

External Factors that have Impacted the Marketing Mix of IKEA

Introduction to the Business and Purpose

IKEA’s business objective is to simplify people’s daily lives in the hope that this would draw in more consumers. IKEA is a firm that provides a wide range of well-designed, functional home furnishings at prices that are maintained as low as possible to make them affordable to the largest number of consumers (Isaksson & Suljanovic, 2006). IKEA’s mission includes advancing society via positive leadership in addition to providing home goods.

The operations division and the franchising division are the two main divisions that make up the IKEA corporate structure as shown in figure 1 below. The majority of IKEA’s commercial operations are managed by INGKA Holding, a privately held, for-profit Dutch corporation (Dudovskiy, 2017). This covers the management of the vast majority of IKEA’s retail locations, the creation and production of its furniture, as well as services related to purchasing and supply. IKEA follows the corporate structure of a large corporation. The organizational matrix used by the IKEA Group focuses on the need for information flows in all three directions (forward, backward, and lateral).

Figure 1: The legal Structure of IKEA (Sourced from Dudovskiy, 2017)

Stakeholders are those who have an interest in a business. Investors, devoted customers, and employees are a few examples of stakeholders. IKEA’s stakeholders provide operational and monetary support. They raise the amount of community members who are interested in the organization’s success. The relationship between IKEA and its several stakeholders could be at its most positive and helpful. This connection is based on opposing wants and interests when things are at their worst, which makes decision-making difficult and time-consuming (Edvardsson and Enquist, 2002). The decision-making process, the organization’s goals and objectives, operational issues, sales, costs, and profits are just a few examples of areas in a corporation that are vulnerable to influence by stakeholders. The owners of a business have the most sway since it is their duty to decide how the business will run and to provide the funding required for its beginning and growth.

External Factors

Businesses often recognize unexpected events that have serious consequences. These factors have the potential to change an organization’s values, organizational structure, and strategic trajectory. These elements often relate to the surrounding environment of a business. Social, political, environmental, legal, technical, and economic considerations are a few of these. IKEA has expressed its opinion on a number of political topics. For instance, entry hurdles for Western businesses have recently been lowered in China and India, improving the brand’s visibility in these regions. IKEA operates in over 50 countries; thus it is crucial that local laws be observed in each of them (Grondelaers & van Hout, 2021). The primary factor influencing the earnings and sales that companies will generate in international marketplaces is the state of the global economy. Since they could have a significant effect on sales, cultural and societal trends should also be taken into account. IKEA is compelled to concentrate on a particular fashion trend when it emerges in order to compete in the market. Instead of building more physical shops, IKEA can reach customers and provide a better shopping experience at a lesser cost by embracing digital technologies. In addition, the business is using augmented reality to increase customer happiness. This is strongly related to the idea that greater customer service results from better customer experience (Grondelaers & van Hout, 2021). Since they are the outside variables that are now connected to sustainability, environmental concerns should be a company’s first priority. Given how often laws and regulations change, IKEA is continually in risk of running afoul of the law, which would impact its operations.


The most valuable aspect of IKEA is its clearly stated goal, which is to provide customers value independent of market circumstances.

The company’s clearly defined idea, which translates into a wide range of products that consumers can assemble themselves, results in enormous cost savings that are passed on to the customers as another key benefit. Weaknesses

It is challenging to maintain consistent standards across all of IKEA’s sites since the company is a large, worldwide enterprise with operations in several nations (Alrubah, et al., 2020).

IKEA fails to explain its environmental policies to its stakeholders and its activities have a negative impact on the environment.


The firm has a good chance of drawing customers who like buying such goods because to its “green” business methods (Alrubah, et al., 2020).

The company’s biggest potential is probably its cost leadership, which requires a singular concentration on cost at the detriment of all else.

The company’s entry into developing markets and new markets, where it has an untapped client base that can be used to increase profitability, is the second potential. Threats

IKEA’s competitors have often copied its low-cost business strategy, so the firm has to keep innovating if it wants to maintain its competitiveness.

IKEA’s distinctive selling concept, that DIY is a major factor in strategic success, has changed as a result of the rise of the internet and online purchasing.


IKEA lays a stronger focus on the price component of the marketing mix than on any of the other parts due to its cost-effective business approach. This is shown by IKEA’s marketing strategy. The 4Ps marketing strategy (Product, Pricing, Place, and Promotion) incorporates a number of marketing methods into its marketing mix, including the product innovation, preferred pricing strategy, and the promotion planning applied to a market. IKEA sells a vast variety of products, all of which are part of the company’s marketing mix (Ye, 2021). IKEA distributes its items in three major categories: baby and children’s products, traditional home and workplace furniture, and outdoor furniture. IKEA’s aim, business philosophy, and vision all revolve around providing things at reasonable costs. IKEA is well-known for producing low-cost furniture that can be used in both household and business settings. It stresses expenditure containment as well as efficient operational components. IKEA has a terrific distribution and placement strategy as part of their marketing mix (Wichmann, et al., 2022). IKEA’s distribution network is one of the largest in the world, reaching every nation on the planet. Massive quantities of flat products are produced in the manufacturing process. IKEA’s items are transported directly from the suppliers to the retail outlets where they are sold. As a result, the expenses of handling, shipping, and carbon impact are all reduced. Regarding IKEA’s promotion and advertising strategy, the company’s marketing mix comprises a variety of promotion tactics such as billboards, social media, print, television, and internet promotions.

A product portfolio is a straightforward compilation of all the goods and services offered by a company. IKEA is able to reduce its exposure to risk by maintaining a diverse assortment of goods, since if demand for one of these products declines, another may rapidly fill the void. Product portfolio analysis is used to aid in planning product development and strategy by reviewing an existing portfolio to identify which goods should get more or less investment. This is done to enhance the productivity of product development and strategic planning. Before selecting whether to eliminate some items or suppliers from its lineup or to add new products to those it already offers, IKEA evaluates its whole product selection. IKEA utilizes a product range that plays to the company’s strengths and allows it to capitalize on the most alluring economic prospects (Ye, 2021). The business portfolio indicates the range of distinct companies and strategic business units that comprise the organization, as opposed to just the goods and services it offers. In studies of IKEA’s product line, several perspectives on stock types, the company’s development prospects, profit margin drivers, income contributors, market leadership, and operational risk are offered. This is vital for investors doing equities research and analysts assisting internal corporate financial planning.

The impact of external factors on the marketing mix

Marketing is a social and management activity that assists people and organizations in achieving their objectives by developing new products and trading them for items of equivalent or greater value. The marketing mix is a vital component of IKEA’s overall marketing strategy since it serves as a conduit between the firm and its target market. As a result, it evolves with the market and all connected parties. Three key worldwide dynamics have had a significant impact on IKEA’s ability to successfully promote its goods during the last decade. Changes in the natural environment, economic and geopolitical power shifts, and technology breakthroughs are examples of these external factors (Alrubah et al., 2020). Significant continuous and rapid changes in IKEA’s stakeholders, market, and marketing mix have resulted from external factors. These changes are the result of external factors. It is difficult to sell a brand successfully to a new market owing to a lack of brand exposure, unanticipated market circumstances, diverse economic and environmental constraints, and other difficulties. IKEA shares the stories of its customers and offers advice on how they might enhance their lives via content marketing. IKEA employees visit customers in their homes to learn about their actual experiences and gather vital data that helps the company to make more informed choices on its proactive marketing efforts. Considering the future, it is possible to infer that IKEA’s marketing mix has reached a crossroads with competing future possibilities along each of the outer dimensions. First, Wichmann, et al. (2022) highlight that the disparity between increasing complexity and enhanced simplicity will influence consumer purchasing decisions, and second, the furniture industry will be differentiated by more inter-firm cooperation rather than increased marketing mix protectionism. Thirdly, the ongoing use of automation vs a greater appreciation for the importance of the human touch is a dilemma impacting the whole furniture sector. As a final consideration, IKEA’s future expansion requires striking a balance between local adaptability and worldwide consistency in its marketing mix.

Reference List

Alrubah, S.A., Alsubaie, L.K., Quttainah, M.A., Pal, M., Pandey, R., Kee, D.M.H., Ling, L.K., Nadirah, N.A. and Aishan, N., (2020). Factors Affecting Environmental Performance: A Study of IKEA. International journal of Tourism and hospitality in Asia Pasific (IJTHAP), 3(3), pp.79-89.

Dudovskiy, J. (2017). IKEA Organizational Structure: Expecting Benefits from a Major Restructuring – Research-Methodology. [online] Research-Methodology. Available at: https://research-methodology.net/ikea-organizational-structure-expecting-benefits-major-restructuring/.

Edvardsson, B. and Enquist, B., 2002. ‘The IKEA saga’: How service culture drives service strategy. Service Industries Journal, 22(4), pp.153-186.

Grondelaers, S., & van Hout, R. (2021). From Big Brother to IKEA. Applications of Cognitive Linguistics, pp. 371.

Isaksson, R., & Suljanovic, M. (2006). The IKEA experience: A case study on how different factors in the retail environment affect customer experience. Available at: http://www.diva-portal.org/smash/get/diva2:1032639/FULLTEXT01.pdfWichmann, J.R., Uppal, A., Sharma, A. and Dekimpe, M.G., (2022). A global perspective on the marketing mix across time and space. International Journal of Research in Marketing, 39(2), pp.502-521.

Ye, C. (2021). IKEA’s Global Sourcing Challenge. Academic Journal of Business & Management, 3(7).