Question:

Who are IKEA’s competitors?

 Answer:

There aren’t any real competitors.

IKEA revolutionized both the retail and furniture industries.

Previously the furniture industry had always been an amalgamation of small scale manufacturers and separate retailers.

IKEA was the first to unify manufacturing, distribution and retailing on a global scale.

IKEA’s innovations were so radical that they completely disrupted traditional business models.

Some of these innovations included:

Redefining home furnishings as a “lifestyle” instead of individual products. This lifestyle approach expanded the product mix into both furniture and non-furniture items.

IKEA was the first to design, produce and market products based on a unified model that combined form, function, cost, marketing and materials.

The basic modern designs were simple and inexpensive. IKEA expanded these design principles into many different categories of home products.

They recognized that product design could address and resolve systemic inefficiencies that had become ingrained into furniture manufacturing and distribution over the previous century. For example:

IKEA recognized that the most efficient worldwide manufacturing sites were far removed from the biggest retail market distribution locations.

Furniture was a bulky product that could not be shipped efficiently over long distances.

The use of low cost plastics and engineered wood products for furniture had been shunned by the majority of consumers due to a general perception of unacceptably inferior quality.

IKEA furniture has a very simple but distinctive style.

That styling is highly dependent on the requirement that it must be capable of being packed into flat rectangular boxes for inexpensive shipment worldwide.

To overcome the stigma of low-cost materials IKEA did something else that was revolutionary at the time.

They introduced floor displays that clearly described and highlighted the benefits of low-cost materials used in their furniture.

Previously, furniture manufacturers had been very careful not to draw attention to the use of plastics and particleboard in cheaper furniture products.

IKEA also introduced product testing to create confidence in the reliability of their inexpensive products and to ensure that the products could survive long distance shipping.

That was not a common practice in the 1960s.

The universal efficiencies that are built into IKEA’s global manufacturing, distribution and retail marketing systems make the company a formidable market force with no real competition.

Small or start-up companies may seem to be at a huge disadvantage in their attempts to compete against category crushers like IKEA.

This can be overcome by specializing in related niche markets that are too small or too complex for the larger competitors to enter.

For example, Simplicity Sofas of High Point, NC specializes in high end and custom-built self-assembly furniture.

These are two niche markets that are unattractive to large mass production oriented manufacturers such as IKEA.

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