The IKEA Innovation stack: Constraints help too!

IKEA had to evolve through a harsh environment and boycotts, using a catalog to attract customers to their store and allowing them to roam freely and place orders via mail. However, they faced the challenge of not being able to manufacture their furniture in their home country.

  • They worked on an innovation stack, starting with sourcing labor from Poland due to low costs. But Polish factories had quality problems, so IKEA built efficient factories and created knocked-down furniture to save shipping space.
  • Self-assembled furniture eliminated labor and delivery overheads, and custom design lowered production costs.
  • Standardizing parts helped IKEA achieve economies of scale, and they built a global supply chain and warehouse showrooms to simplify logistics.
  • Winding paths helped customers find products, and IKEA offered food and child care to keep customers in stores longer.
  • IKEA’s low prices and trusted brand solidified their success.

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