IKE

A
Presented By
Sereena Sohail
Nashmia Khurram
Rumaisa Azam

page 01
 IKEA's value Proposition is operational

Value Proposition
excellence because all designs and products are
made starting with a Functional need and price.
By using creativity and innovation low cost raw
IKEA's Strategy material is purchased and manufacturing costs
are lowered by purchasing in Bulks to create a
functional product. page 02
Vision IKEA's vision is to create a better everyday life for the

Statement
many people. Here you can discover what this means
and find out who we are, what we do and what we’re
working towards.

page 03
Mission
Statement
IKEA has become a global home
furnishing brand that brings affordable,
well-designed home furnishing to people
all over the world.

page 04
IKEA's Balance Scorecard
FINANCIAL

CUSTOMER

PROCESSES

LEARNING & GROWTH

page 05
 IKEA's Balance ScorecardIKEA's Bala
CRITICAL FACTOR OBJECTIVES
Financial • Affordability
• Cost Structure
• Revenue Stream
• Increasing Shareholder value
Customer • Achieve Customer Satisfaction
& Loyalty
• Acquiring New Customers
• Understanding Customers &
enhance Profitability
Process • CSR & Sustainability
• Efficient Supply Chain
• Product Portfolio
Learning & Growth • Training of Co-workers
• Equality & Tranquility
MEASURE
• Return on Capital Employed
• Expense control
• Inventory Turnover Ratio
• Cost per unit & new Products
• % of Growth in Revenue & Customers
• Customer Satisfaction in Target Market
• % of retained Customers
• Cost per Customer acquired new and new
• Asset Utilization
• Acquiring companies & vendors
• Productive Processes including time of
delivery, quality and cost
• Wage rate & Contracts
• Promotion of Employees
• Efficiency after Training
STRATEIES
• 12,000 products with 3 new retailers opened
• Measuring Costs to absorb for the customers
• Raise in Limited Sales Prices
• NPS (Net Promoter Score) for customer
focused metric
• Loyalty Cards
• Feedback Channels
• Energy efficient materials
• 50 % furniture manufactured by 3rd party
Vendors
• Vertical Supply chain
• Making Wage rate 50/50 independent of
gender
• Partnership, training programs &
Campaigns
 Financials

47% 40%

FY 21 FY 22

Adjusting prices to make sure the cost is covered with budget friendly
pricing for customer as well to enhance the existing customer value for
the strategy. page 07
IKEA
Revenue
Growth
• Currently having Sales of
44.6 Billion Euros in Retail
• 38 new IKEA Locations
opened recently
• 231,000 employees
working worldwide.

page 09
Customers
• The Net Promoter Score (NPS) is used to measure customers satisfaction.
• NPS aggregate of 25 points, showing as 52% people giving Ikea 9 out of 10, while 25% gave 7-8 out
of 10 and 27% rated it between 0-6.
• loyalty cards are issued over 10 Million family members joining their program.
• Customer retention rate 71/100 in 2022.
• during the Covid-19 pandemic resulting in a 10% decrease in online sales.
• Ikea launched a mobile app along with an e-commerce website
• With 472 outlets in over 64 countries, maximizing efficiency of shopping making it
easier for potential clients to navigate stores.
• Ikea achieved a 2% market share and ranked 11th in the US market.

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Ratios

Financials
• Revenue growth by sales is EUR 39.6 in 2020 to EUR 41.9 in 2021 to EUR
44.6 (amount in billions) in 2022 retail sales (Ikea, 2022)
• Change in % 2022 is 6.4% as compared to 2021 that is 5.8% this including
sales of Ikea products, food and services to customers.
• Total revenue including wholesale, franchise fees, and retail sales to 2021.
• The net income has decreased from EUR 1433 to EUR 710 (in millions)
• The Gross Profit measured 10.6%.
• Inventory turnover is 4.65 times and 78.3 days which means 2 months & 18
days.
• The equity went down from EUR 10.1 to EUR 9.8 (in billions) in 2022
• The equity ratio went down from 47% to 40%.
• Equity decreased by EUR 268M during 2022.
• The ROCE 9.45%.

page 08
 IKEA's Customer Ratings

Target Market
60 and above less than 1
Others 8.4% year
17% 10.5%
Negative 2-5
20-30
30% 50-60 years
years
years 28.6%
30.5% 1-2
16.7%
years
Millenial 19%
s
49%

Gen Positiv 40-50

Z e years 5-10
34% 70% 19.7% 10+ years
30-40
years years 18.1%
24.6% 23.8%

Preferences Customer ratings NPS by Ages NPS by Usage

IKEA's NPS was rated highest by customers of ages 26-30, and the lowest by customers of ages
66+.
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 Process
Furniture Design and Supply Chain

• vertically integrated supply chain.

• than 50% of furniture is manufactured by third-party
vendors based in Poland, China, Romania, and
Slovakia.
• The company operates with an extended chain involving
cross-border manufacturing and trans-shipment of
products through its own logistics facilities.
• To widen its product portfolio Ikea relies on building
alliances or acquiring companies that cater to a similar
market.
page 12
 CSR Strategies

Process
• IKEA aims to become a circular and climate-
positive business by 2030.
• Investing in their customers, employees, and CO2
emission-free transportation. Ikea secured 46.3
million euros through investments in convenient
delivery methods.
• For Energy Saving Ikea generates fully Wind
Power in its UK stores alongside Eco pilot another
technology for reducing energy consumption.

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Learning & Growth
• Ikea's vision is to make this ratio 50/50 wage rate being any gender.
• decrease of 3.79% in the median gender pay gap (IKEA, 2022)
• The real wage rate set by the Living Wage Foundation is 11.95 euros
(in London) and Ikea fulfills this by keeping it to 10.9 euros.
• IKEA is more respected by employees as
1. a leading retailer for 83%
2. 79% engaged in the business
3. being inclusive with 80% upholding their values
4. 82% feeling empowered.
• Ikea has invested 7.9 million euros in its employees by giving them a
wage up to the living costs, traveling expenses, utilities, and food.
• Offering interest-free loans at 10% of the salaries and giving 15% to
30% discount on 2000 furniture items.
• Encouraging Diversification in the environment.

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Learning
& Growth
Programs & Collaborations

• Ikea Donated 1.5 million euros to major and minor

resources, skills, and expertise to Barnado (the National
Lottery Community Fund and UK’s refugee council) for
home collaborations in its 4th year.
• a National Education Program accompanied by
“Independent Review of Children’s Social Care”.
• The UPPNA program in UK & Ireland (launching in
2021) is a partnership with the British Council in
England.

page 15
 References
PRESENTED TO WEBSITE

Sir Azam Anwar www.ikea.co

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