Notesmyfoot Logo Amu
Inside Ikea's small-format store strategy​

Inside Ikea's small-format store strategy

In the ever-evolving world of retail, companies are constantly seeking innovative ways to meet the demands and preferences of their customers. IKEA, a global leader in home furnishings, recently made a strategic move by building smaller format stores, bringing their products closer to customers. This case study aims to analyze the factors that influenced IKEA’s decision-making process, understand the concept of customer value proposition, and explore the factors that affect consumer behavior.

Section 1: Understanding the Concept of Customer Value Proposition

To begin our analysis, it is crucial to grasp the concept of customer value proposition (CVP). CVP refers to the unique set of benefits and values that a company promises to deliver to its customers. For IKEA, their CVP revolves around affordable, well-designed furniture and home accessories that cater to various customer needs and preferences. IKEA’s CVP is also backed by a commitment to sustainability, responsible sourcing, and excellent customer service. This has enabled them to become a successful global brand and remain a leader in the furniture industry. 

Section 2: Factors Influencing Strategic Marketing Decision Making

IKEA’s decision to build smaller format stores is backed by a deep understanding and analysis of various factors impacting strategic marketing decision making. These factors include market trends, customer insights, competition, technology advancements, and changing consumer behaviors. By carefully considering these elements, IKEA was able to identify the need to bring their stores closer to customers for enhanced accessibility and convenience. This move has paid off, with IKEA seeing increased sales and customer visits. IKEA has also been able to leverage its compact size to provide customers with a better shopping experience.

Section 3: Analyzing Factors Affecting Consumer Behavior

Consumer behavior plays a pivotal role in shaping marketing strategies, and IKEA recognizes this fact. By conducting extensive research and utilizing tools such as the PEST framework (Political, Economic, Sociocultural, Technological), IKEA gained insights into the factors influencing consumer behavior. This analysis allowed them to adapt their marketing strategies accordingly, ensuring alignment with customer preferences and needs. This allowed them to create an effective marketing strategy that was successful in creating a loyal customer base. This in turn increased their sales and profits.

Section 4: The Implementation of Smaller Format Stores

Having understood the importance of customer value propositions and the factors affecting consumer behavior, IKEA implemented the strategy of building smaller format stores. These stores are strategically located in urban areas, closer to their target customers. The reduced store size allows for a more intimate shopping experience while still offering a wide range of products. This approach ensures that IKEA remains accessible to customers while catering to their evolving lifestyles. IKEA has also implemented digital solutions such as virtual showrooms and online delivery services to ensure customers can access its products conveniently. These strategies have allowed IKEA to remain competitive and expand its customer base.


In conclusion, IKEA’s decision to build smaller format stores exemplifies their commitment to understanding and meeting customer demands. By focusing on customer value proposition, analyzing factors influencing consumer behavior, and making strategic marketing decisions, IKEA has successfully adapted their approach to align with the evolving retail landscape. This case study serves as a valuable example for companies seeking to enhance their marketing strategies and build stronger connections with their customers. Also check out Zara’s Logo Redesign: A Bold Step into the Future?