BCG Matrix of IKEA

IKEA is a Swedish furniture and home décor multinational conglomerate. Ingvar Kamprad founded the company in 1943. Today, we’ll discuss the BCG matrix of IKEA; it will focus on the four growth market share quadrants; stars, cash cows, question marks, and dogs.

Unique Products and Brand Features of IKEA

• Offers Guaranteed furniture products
• Customized furniture relevant to the customer’s spacing
• Renowned for ready-to-assemble furniture
• Achieved a cost leadership strategy
• Kitchen and household appliances and accessories
• Develops unique designs of furniture and earns patents for it
• Wide range of products and services

Best Selling Categories and Brands Market Share of IKEA

• Bed and bathrooms share of IKEA – 22%
• Living room – 19%
• Dining and kitchen – 15%
• Children furniture of IKEA – 5%
• Food furniture of IKEA – 5%
• Other furniture categories – 34%

Top Items with Increasing Growth Rate of IKEA

• Bathroom appliances
• Baby and kids accessories
• Mattresses and bed removal and recycling
• Ready-to-assemble furniture
• Kitchen Appliances
• Decorative products
• Furniture
• Lighting
• Textile

The BCG matrix of IKEA would focus on the four growth rate market share quadrants like stars, cash cows, dogs, and question marks. It comprises of following;

• Stars mean higher growth rate and higher market share
• Cash cows outline higher market share and lower growth rate
• The question mark means lower market share and higher growth rate
• Dogs outline lower market share and lower growth rate

Here’s IKEA BCG matrix growth share analysis as follows;

BCG Matrix of IKEA

Let’s discuss the four growth share quadrants in the BCG matrix of IKEA, and they’re as follows;

Stars of IKEA

The star quadrant in the IKEA BCG matrix growth share analysis comprises such products and services that have a higher market share and higher growth rate. They contribute significantly to the revenue and profitability of the furniture company. However, some of the star products and services of the furniture and home décor brand IKEA are as follows;

I-Ready-to-Assemble Furniture

IKEA generated an annual revenue of roundabout 45 billion Euros in 2022. Ready-to-assemble furniture is the star product of the company and they contribute significantly to the revenue and profitability of the company. They have achieved a higher market share and higher growth rate in the readymade furniture market.

II-Latest Trends

The other reason for the growth and success of IKEA’s ready-to-assemble furniture is its unique designs and latest trends. The company follows the latest trends and styles to keep up with customer’s demands and satisfy their needs and wishes.

III-E-commerce

IKEA has established an e-commerce platform to target online customers and its furniture is also available to more than 50 online stores. According to an estimate, approximately 882 million customers visited IKEA’s e-commerce. The furniture company has established a significant market share online with an increasing growth rate.

Cash Cows of IKEA

The cash cow quadrant in the IKEA BCG matrix growth share analysis outlines such products and services that have a higher market share and lower growth rate. They contribute significantly to the sales, revenue, and profitability of the furniture company. However, some of the cash cow products and services of the furniture and home décor brand IKEA are as follows;

I-Food Products

Along with furniture and home décor items, IKEA is also running a successful food business side-by-side. According to an estimate, more than 5% of the total sale of the company comes from food items. The company has earned a significant market share, but its growth rate is slower due to the tough competition from the retail chain food brands.

II-Home Appliances & Accessories

Approximately 30% of the total sales of IKEA comes from home appliances. The company offers a wide range of products in the home appliances category. It has allowed the furniture brand to earn a significant market share. The growth rate is slower because the home appliances market is over-saturated and the products are readily available without any differentiation from other brands.

Question Marks of IKEA

The question mark quadrant in the IKEA BCG matrix growth share analysis consists of such products and services that have a lower market share and higher growth rate. They have the potential to contribute to the revenue and profitability of the furniture company. It also goes by the name of the problem or troubled child that needs attention. However, some of the question mark products and services of the furniture and home décor brand IKEA are as follows;

I-Textile Products

IKEA also offers textile products under the home décor category. There is no doubt that textile and clothing holds great growth potential, but it comprises top competitors like Denim or Linens. However, if the company manages to deal with the tough competition, then the textile and clothing products have the potential to become the next stars and cash cows of the company.

Dogs of IKEA

The dog quadrant in the IKEA BCG matrix growth share analysis comprises such products and services that have a lower market share and lower growth rate. Instead of contributing to the revenue and profitability of the furniture brand; they consume a lot of capital resources of the company. However, some of the dog products and services of the furniture and home décor brand IKEA are as follows;

I-Children Toys

IKEA also used to offer children’s toys to customers at its stores. However, they weren’t contributing significantly to the revenue and profitability of the brand. Rather they were consuming the capital resources of the company; IKEA started shutting down the children’s toys category from all of its stores.

Conclusion: IKEA BCG Matrix Analysis 

After an in-depth study of the BCG matrix of IKEA; we have realized that IKEA is the world’s leading furniture and home décor multinational conglomerate. If you are learning about the IKEA BCG matrix growth share analysis; then you should keep in mind the abovementioned four quadrants; stars, cash cows, question marks, and dogs.