IKEA Business Model Innovations

Source of all images: Google Images, 2018

Timmers (1998) as cited in Breiby & Wanberg (2011) discussed that, “business model is “an architecture of the product, service and information flows, including a description of the various business actors and their roles; a description of the potential benefits for the various business actors; a description of the sources of revenues” (p. 2).

Source: Google Images, 2018

IKEA was founded in 1943 by Ingvar Kamprad, the concept of IKEA is B2B or B2C model and basically selling household and home furniture in worldwide based . IKEA came out with idea of low cost home furniture to be acknowledge by all consumers, IKEA (2018). In the early step of IKEA existence, IKEA applied business model that based on consumers preference which based consumer’s needs and IKEA will match with the suppliers, it makes IKEA get public's attention because consumers feel that all they need are available in IKEA.

IKEA like to brought up idea of house touring inside their store so visitors can enjoy all design from IKEA. As all physical stores does, IKEA also provide “Internet and IKEA” as one of new way to experience online shopping for around 9,500 collections furniture in 2015. Moreover, from 2014 online bases catalogue is also released in form of mobile app and it allows customers to shop and can use delivery service however, during 2014-2016 it’s only available for android and in 2017 IKEA success created the app for iOS, Farr (2016). It is make all users of mobile phone can access online shopping via IKEA app.

IKEA website used simple design and convenient to shopping and easy to follow. In 2017, IKEA has released new business innovations is by cooperated with third party to join the business such as Amazon.Com and Alibaba. Third party will basically help IKEA to promote and provide more range of e-commerce system for customers around the world. Moreover, a special VR and AR technology is the next idea that IKEA brought to the market. On the website, IKEA allows customers to arrange and put their own furniture that they chose into AR and VR technology (Turula, 2017). It is really handy system where consumers can actually design their own room onto online mode. The VR also available for iPhone and android which give access for consumers to do virtual shopping. This is a part of innovations and investing with Apple to the future project with better technology and consumers’ convenient.

Reference:

Breiby, E., & Wanberg, M. H. (2011). Successful business model innovation (Master's thesis, Institutt for industriell økonomi og teknologiledelse).

Farr, R. (2016). Case Study: IKEA.

IKEA.com retrieved from https://www.ikea.comis a website of home furniture online shopping.

Turula, T. (2017) IKEA is transforming into a full-fledged tech company – starting with its new Apple and Amazon partnerships.