IKEA Ansoff Matrix

IKEA Ansoff Matrix is a marketing planning model that helps Swedish furniture chain to determine its product and market strategy.  According to Ansoff Matrix, there are four different strategy options available for businesses. These consist of market penetration, product development, market development and diversification.

IKEA Ansoff Matrix

IKEA Ansoff Matrix

Within the scope of Ansoff Matrix, IKEA uses all four growth strategies in an integrated manner:

1. Market penetration. Market penetration implies selling existing products to existing markets. IKEA uses market penetration strategy aggressively. Effective marketing strategy in general and IKEA catalogues in particular play an instrumental role in increasing the efficiency of market penetration for the furniture retailer.

2. Product development. This involves developing new products to sell to existing markets. Product development is one of the main growth strategies for IKEA. The home improvement and furnishing chain has more than 9500 types of products in its range and it launches about 2500 new products every year.[1] The company makes some of its products in-house, as well as, purchases from suppliers.

3. Market development. Market development strategy is associated with finding new markets for existing products. The world’s largest furniture retailer engages in market development extensively. IKEA Group operates 422 stores in 50 markets around the world.[2] 19 new IKEA stores opened in 2018 alone.[3] The company is forecasted to enter into more developing markets in short and medium term perspective.

4. Diversification. Diversification involves developing new products to sell to new markets and this is considered to be the riskiest strategy. IKEA experiments with diversification business strategy occasionally. IKEA restaurants within furniture retail shops can be mentioned as a stark example of diversification by the company. It has to be mentioned that although the furniture retailer has expanded its business strategies of cost advantage and no-frills products to foods offered at IKEA restaurants.

IKEA Group Report contains a full analysis of IKEA Ansoff Matrix. The report illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five Forces, Value Chain analysis and McKinsey 7S Model on IKEA. Moreover, the report contains analyses of IKEA leadership, business strategy, organizational structure and organizational culture. The report also comprises discussions of IKEA marketing strategy, ecosystem and addresses issues of corporate social responsibility.

IKEA-Group-Report

[1] IKEA Facts and Figures 2018 (2019) IKEA, Available at: https://www.ikea.com/ms/en_US/this-is-ikea/facts-and-figures/index.html

[2] IKEA Facts and Figures 2018 (2019) IKEA, Available at: https://www.ikea.com/ms/en_US/this-is-ikea/facts-and-figures/index.html

[3] IKEA Facts and Figures 2018 (2019) IKEA, Available at: https://www.ikea.com/ms/en_US/this-is-ikea/facts-and-figures/index.html