Cover Sheet

Cover Sheet: Non-Anonymous Marking
Student Name: Darshan Nilesh Mistry
Student ID: 5995516

Degree Title: MBA Global Business
Level: Post graduate

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Module Title: Marketing in a global age
Module Code: M003LON
Seminar Lecturer:

Assignment Title: MARKETING PLAN (IKEA)
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Executive summary
This report provides the analysis of IKEA in the UK market and its micro and macro environments, the strategy the company adopts and the control plan it should take into action. They elements of analysis used in this marketing plan are PESTEL, Porter’s five forces, TOWS, Value chain, Marketing mix and a proposed control plan.
According to the PETEL analysis conducted IKEA faces a few factors that affect its market in the UK. With BREXIT being of the biggest concerns, IKEA had to rise their prices by 3.6% due to more costs on their imports. But IKEA stands back and does not want it to affect them and thus want to grow even more in the Uk with grasping opportunities.
Secondly, The Porter’s five forces analysis showing the competitor analysis, IKEA has a great market share with about 11% in the UK and competition seems to be quite less. This is a direct outcome of the type of products they provide and their aim of always providing low priced furniture. But, it does not prove that there is no threat in the market, with UK being a fast market IKEA can anytime come across threat of any new or current firm.
The analysis of TOWS, IKEA has many strengths and opportunities adapted from the PESTEL analysis, but with threats IKEA has various segments where it still needs to grow and be in the eyes of its consumers in the UK market, with more innovative ideas and products and to provide it to a larger section of the market.
The segmentation and target tables show that IKEA is majorly focused on a particular section of the market (Young couples, Urban, new generation), thus provided a solution on its target expansion.
Furthermore, the marketing mix in this content provides detailed information on how IKEA has used all the elements of the mix in the UK market to be in a position it is as of date. From products to prices to promotions IKEA has taken every opportunity to be in their consumer eyes.
Lastly, the control plan is provided in this content for IKEA to successfully accomplish the objectives they have set, and use the promotional aspect of the mix in order to reach out and gain them in a given time period.

Table of Contents

1.0. Introduction…….…………………………………………………………………………4
2.0. Situational analysis……………………………………………………………………..5
2.1. Market analysis……………………………………………………………….5
2.2. Competitor analysis………………………………………………………..8
2.3. Internal company analysis………………………………………………11
2.4. Strategic development…………………………………………………..12
3.0. Financial and marketing objectives……………………………………………14
4.0. Strategic marketing…………………………………………………………………..14
5.0. Marketing program…………………………………………………………………..18
5.1. Product…………………………………………………………………………18
5.2. Price……………………………………………………………………………..19
5.3. Place……………………………………………………………………………..20
5.4. Promotion…………………………………………………………………….21
5.5. People………………………………………………………………………….24
5.6. Process……………..………………………………………………………….25
5.7. Physical evidence…………………………………………………………25
6.0. Control Plan……………………………………………………………………………..26
7.0. Conclusion and recommendation……………………………………………..27
8.0. References………………………………………………………………………………..29

IKEA is known as a furniture dream come true for every individual. Originally founded by a 17 year old in 1943, named Ingvar Kampard. Today it is known as the world’s largest furniture retailer, known for its designs and unique style. Having a presence in the UK for nearly 30 years, IKEA has about 25 stores spread across the UK and over 355 worldwide with number of employees accounting to 149,000 as of 2017. Their concept is simply to provide affordable furniture to all not just “the few”. In 2017, IKEA had 2.3b visits on their website globally and 936m store visits. Their key strength is to enable as many people to live a much better life at home which is also the firm’s vision.
IKEA stores worldwide also provide, restaurants and cafes services for customers while shopping. The furniture retail store achieved a total of £1.814bn in 2017 with an increase of 5.8% compared to the previous year and marking its 6th sequential year of UK growth (BBC News, 2017).Their new website launch also accounted to 15% of their total sales. The firm also added 1,000 jobs during the year with an increasing number of workers to 10,900 (Bulletin, T., 2015).

The following content in this assignment would focus on evaluating the situational analysis which include micro and macro environments, Objectives of the company, tactics, action and control of the company IKEA in concerns of the UK market.

2.0 Situational Analysis
2.1. Market analysis
This agenda is used widely to analyse the macro environment that could affect the organisation.
Table 1.
Factor impact
(Description) Potential
Political Factors • Brexit- This may affect all businesses in the UK, even though the uncertainty, IKEA stands behind the decision and believe there are enormous opportunities in the UK (, 2016) . Another reason being their fifth consecutive year of sale growth in the UK.
• Higher import costs due to fall in pounds. IKEA increased prices just by 3.6% though their cost increased to 13.7% (U.K, 2017).

Medium threat

High threat
Economic factors • Unemployment rate- Depreciation of the sterling due to the vote led to a slow decline in unemployment rate to 4.3% in 2017 (Statista. (2017)
• Stable economy- A business will do well in a country with a stable economy but with the brexit situation, UK seems unstable for firms (Allen. K, 2016), (Sky News. 2017).
Medium threat

High threat
Social factors • Spending habits- UK and Ireland managing director mentions increase of trend in British people spending more on experiences rather than products (Allen, K. and Butler, S., 2016).
• Rising number of internet usage- IKEA saw a high number of 2.1b visits on it’s website in 2017.

Medium threat

Low threat/opportunity
Technological factors • Technology advancement- IKEA space10 innovation lab to explore new ideas, technology for the future. .
• Going fully techy-Transformation into a fully technological company with apple ; amazon partnership (Turula, T., 2017).
• High machinery costs- Becoming technologically advanced would require latest equipment which could result to very high costs for IKEA.

Low threat/opportunity

Medium threat
Environmental Factors • Renewable energy concerns- Renewable energy investment of £471m by 2020 (Howard, E. 2016).
• Waste management-Plan to cut-off food waste by 50% in all IKEA stores by 2020 ( 2018).

Legal factors • Discrimination law- With strong laws in the UK, IKEA should follow all rules and regulations set. In 2017, the firm was pointed out for the dreadful conditions their drivers work in (Renney, J., 2017).

High threat

Table 1 illustrated above shows the effect of the external environment of IKEA using PESTEL. Main factor in UK being the BREXIT, having more cost on imports for IKEA, it has also decreased unemployment rates which could directly affect IKEA, though UK is a market that can pick up very quick. The firm’s plans to be fully advanced with technology could be very opportunistic having many of its consumers advanced with technology. Also, the need to adapt to the country’s laws and regulations is a very important aspect for IKEA.

2.2. Competitor analysis
The porter’s five force analysis is a powerful tool to examine the level of competition, and the five elements also help determine the attractiveness of IKEA in the UK.
Table 2.
Description Impact
Threat of new entrants • Large capital requirement- To enter the UK furniture market requires a lot of capital for set up. Few competitors but do not provide what IKEA is known for. Low
Threat of substitutes • Smaller distribution channel- IKEA has a narrowed distribution channel which could be advantageous to competitors.
• No specific products that can replace IKEA’s quality products. Keep up with latest trends to last in the market. Moderate
Bargaining power of suppliers • IKEA has a wide network of suppliers.
• Selected manufacturers
• Profit margin affects price in raw material than labor.

Moderate -high
Bargaining power of buyers • Pull strategy- Low prices attract more customers and loyalty.
• Needs- Focused of meeting consumer needs in the market thus hard for customers to switch.

Competitive rivalry • Main competitors in UK are Asda, Muji, Bo concept. But they are all different in their ways. IKEA has its competitive advantage of low prices and has less competition in UK.


(Statista., 2015)
The Graph above shows IKEA having the highest bedroom furniture market in the UK in 2015.

2.3. Company analysis (Internal environment)
2.3.1 Value chain Analysis.
This tool is used to analyse the internal activities of an organisation. Focused to recognise which activities are most valuable and which ones could be improved to gain a competitive advantage.

Table 3.
Infrastructure • Strong e-commerce with the launch of ‘click & collect’ for customer convenience (, 2018).
• Strong financial position in UK with consecutive success and double its turnover by 2020.
HR management • Great management team
• Good relation with employees
Technology development • Constant technology development (space10 platform) Launch of wireless charging furniture, new solar panels.
Procurement • Strong ; trusted relation with suppliers (, 2018).

Inbound Logistics Outbound Logistics Operations Marketing ; Sales Service
• Over 10,000 products produced by over 1000 suppliers (, 2018).
• Customers have the privilege of the ‘click &’ collect’. Easy delivery methods with discounts up-to 50% for its customers. • IKEA does not manufacture own products.
• • Affordable prices makes it more attractive for its customers.
• Family friendly store environment for all age groups. • Most information provided through catalogues (Online platform)
• IKEA provides assembling the product if wished by the customer.
• Variety of payment options desired to one’s need.
(, 2018)

2.4. TOWS Analysis (Strategic development)
Table 4.
Internal Factors

External factors Strength
• Global recognition ; Leader retailer in home furniture products.
• Good quality and affordable products compared to other retailers.
• Advancement in technology
• Locations not easily accessible (Stevens, B. 2018).
• Target of a single market.
• Fewer distribution channels.
• Demand for environment-friendly products.
• Online marketing.
• Current situation in the UK has increased the
Demand for low priced products. ? (S3,O2) Focus on developing products and services on the digital platform as wide as possible ( 2017).
? (S2,O1) Produce as many environment friendly products and services.
? (S1,O3) Focus on the current situation and keep their low price strategy for the consumers. ? (O2,W3) The online market platform will enable IKEA to have more distribution channels across UK.
? (O1,W2) Target and explore different markets to increase awareness.
• Competition from companies with similar products
• Economic factor- Decline in unemployment rate (Statista., 2017).
• Threat of new entrants in the market. ? (T1,S2) Having a higher percentage of being a low cost firm than its competitors, IKEA should use this as a tool to gain market share during the brexit period.
? (T3,S1) Make use of its Brand name and product differentiation to outgo its competitors with also creating job employment. ? (W1,T1) Make locations as accessible to customers as possible to have advantage over competitors who may be closer to customers with similar products (Ruddick, G. 2015).
? (T3,W3) New entrants may pose a threat due to the single market IKEA is focused on.

3.0. Financial and Marketing objectives
All organisations need to set objectives and be clear about them. One way to do it is through the SMART objectives. The following are two SMART objectives set by IKEA for the UK market categorised into financial and marketing objectives.
IKEA’s mission statement is to offer wide range of furnishing home goods at a good design, best quality and durability at such low prices that most can afford.
3.1. Marketing objectives:
-IKEA to increase overall market share to 4% by the end of one year.
-Brand awareness- A sustainable and healthy living Greenwich to be IKEA’s first full size store in London to be built after 13 years. To be IKEA’s most suitable store in the UK and set to open early 2019 (, 2018).
3.2. Financial objectives:
– Increase sales by 4% by the end of one year.
IKEA has set many aims and objectives for the growth of the UK market regardless of the BREXIT occurrence in the country. They still want to expand and grow in a given time frame as they see many opportunities. They should be able to accomplish the objectives in the given time frame with their marketing strategies.

4.0 Market strategy
Strategic marketing of IKEA in the UK would be related to the STP (segmentation, target and positioning). In regards of the Ansoff-matrix, IKEA uses the market penetration strategy for their current products and product development. They use market penetration to grow their customer base in the existing market. And for product development IKEA is trying to make most use to be technologically advanced with new products offered in the existing market.
4.1 Segmentation
In this strategy IKEA divides consumers by grouping them according to different criteria such that people in each group would respond in a similar way.

Table 5.

Age 16-20 Years old 25-35 Years old 40-50 Years old 55+ Years old
Occupation Student Young professionals/University students High professionals Retired
Income Low Middle-Class High- Class Upper-class
Lifestyle Explorer Aspirer Mainstream Reformer
Loyalty Low High Medium Low

From the segmentations table above IKEA classifies Demographic to age and occupation, Psychographic to Income and Lifestyle, Behavioural to Loyalty.

4.2. Targeting
Table 6.

Age 16-20 Years old 25-35 Years old 40-50 Years old 55+ Years old
Occupation Student Young professionals/University students High professionals Retired
Income Low Middle-Class High- Class Upper-class
Lifestyle Explorer Aspirer Mainstream Reformer
Loyalty Low Medium High

Based on the illustration in segmentation, IKEA’s main focus is the generation of today (urban and young people). Consumers who would like to furnish their house in a modern way yet at an affordable price. The UK market being very fast paced with constant technology advancements is for the benefit of IKEA. According to stats in 2017 it was shown that consumers aged around 24-50 at a rate of 50% used the means of online shopping to buy furniture. But IKEA should focus on targeting different segments who could potentially be attracted towards the brand such as high class people and provide some products according to their desires.

(ELLE Decor, 2017)

4.3. Positioning
Below is an illustration of IKEA’s positioning strategy in the UK.

IKEA has positioned itself in the UK market as a brand with furniture at affordable prices, best quality and available to all compared to its key competitor like MUJI, Asda, Bo-concept. IKEA is mainly focused on good quality and most affordable price for their customer’s satisfaction. IKEA is in a position in the UK market whereby it does not have many competitors that provide similar products. The ones that are in the market are relatively different. Thus IKEA uses the differentiation method for its products. IKEA should continue with this form of strategy to be in a position that makes it different from its future/current competitors in the market.
5.0. Marketing program
This section of the report will cover the 7p’s of marketing which is also linked with the tactic and action of the SOTAC paradigm.

5.1. Product
The products that IKEA provides have to meet customer needs in the market which adds value.
5.1.1. IKEA product range
The image below portrays the wide range of products IKEA has to offer in the UK market and globally (, 2018).

(, 2018)
According to the image above IKEA offers a numerous amount of products. Their sales are mostly driven from furniture. But, in 2015 their sales rose 30% due to the new range of mattresses. Also, their food section and the introduction to their “veggie-balls” enjoyed 11% rise in their sales in the UK. Although IKEA provides so many products, they should give more focus on products which do well and implement new developments to the products specifically desired by their consumers (Davies, R., 2015).

5.2. Price
IKEA works with the objective of having the lowest price but good quality. Given their sales driven from mattresses, the following is a table to compare the price strategy of IKEA and others of the product.
Table 7.

Mattress (Pocket sprung) £180 ( 2018). £295-£495 (Department, M. 2018). £179 ( 2018). £350 ( 2018).

The pricing strategy for IKEA’s product (pocket sprung mattresses) are categorized as a high value strategy with great value.

Table 8.

Quality High Medium Low
High Premium strategy
High-value strategy Super- value strategy

Medium Overcharging strategy Medium-value strategy Good-value strategy

Low Rip-off strategy False economy strategy Economic strategy

IKEA is well set on the case of prices, but there are still chances of competitions from others. The firm can use 3 pricing strategies:
• Penetration pricing- Always set reasonable prices to encroach the furniture market.
• Destruction pricing- IKEA should have such reductions in prices thus eliminating its competition in the market.
• Promotional pricing- Setting sale prices on the basis of customers who can be able to make purchases with their budget.

5.3. Place
This refers to the way IKEA delivers its products and services and how their customers find it the most convenient to shop. IKEA provides its products and services through two aspects online and in their branches.
Distribution channel for stores: Direct and selective.
Distribution channel for online shopping: Direct and quite intensive.
Having 25 stores spread across the UK and still plans to have smaller stores in the city so their customers do not have to travel long to get to the store (Ruddick, G., 2015). With complaints by customers in the UK of having to travel long hours to the stores IKEA’s “click & collect” service was a way to be more accessible to their customers. Opened its first store in Norwich in 2015 and plans to open more in the future (, 2018).

5.4. Promotion
This aspect is very important as it directly affects the brand value of the company. IKEA uses various means to promote the brand.

Table 9.
Promotional strategy Quarter 1 Quarter 2 Quarter 3 Quarter 4

Sales promotion Member offers across the store. Free tea and coffee anytime for members ( 2018) Few pounds off when customer spends a certain amount. Coupons, vouchers, promo code for UK residents.
Experience & events 178 million children are helped with the aid of IKEA foundation program ( 2018). Home furnishing event that takes place 3 times a year (with numerous activities and offers) Workshops to learn how to furnish the desired dream home ( 2018). Volunteering events across UK.
Publicity Information spread to public through newspapers, articles. Pop-up stores for customer attraction ( IKEA pop-up shop in Liverpool station) Sponsorship to university sporting events in UK. Sponsor to other firms during festivals.

IKEA uses the ATL way of communication such as newspapers, adverts on social media, billboards and campaigns to attract customers.

This image shows the pop up store it opened at a station in UK. In order to advertise their garden products which attracted many customers. A very unique style of advertising at a busy place to attract many people (Mishra, B., 2014).

They use the form of vouchers and coupons to attract those customers who always look to save a few £.

IKEA also created a promotional strategy on the technology platform with a new augmented reality application launch, whereby customers can virtually place furniture in the house through the phone and have an experience at their comfort (Pandolph, S. 2017).

IKEA in UK placed another very interesting add on the basis of their customer’s health. The campaign was focused on sleep. According to BBC the nation is deprived of sleep and as an impact it cost the UK up to £40bn a year on health. IKEA’s slogan was “The wonderful Every day” to the “wonderful Every night” mainly focused on how their consumers should invest in their sleep.

(Vizard, S., 2017)

5.5. People
People is a key aspect of the mix. IKEA’s employees are an important element as they provide the service to the customers. If a business hires and trains in a proper manner it would be a good outcome from the employees.

(, 2017)

The image above shows IKEA’s people. The firm has overall great feedback from its employees (ex/now). They have shown to be great with their employees from interviews to work. IKEA should continue with the employee relationship to have positive outcomes.

5.6. Process.
IKEA UK likes to make it easy for their customers to pick up, assemble by themselves and also provide additional services delivery, installation, planning, renting which is convenient for their customers. Also provide customer care service and ease of tracking their orders and return policies.

( 2018)

5.7. Physical evidence
The physical evidence of IKEA in UK includes various advertisements, stores, pick & collect points and services that create convenience. All their stores have a unique concept and atmosphere. Play area for kids, restaurants, for better customer experience.

6.0. Control Plan
This aspect is used in the measurement of IKEA’s in order to achieve the objectives in the marketing plan.
Table 10.
Objective Quarter 1 Quarter 2 Quarter 3 Quarter 4 Control
Increase market share by 4% by end of one year.

Increase sales by 4%

Brand awareness of sustainable and healthy destination to open early 2019 Sales promotion Social media advertising Publicity Events ; experiences To keep track with sales volume
Check on sale increase each month / Profitability ratio.
Keep track on Social media platforms and build customer relationship.

The action plan above is based on the 3 objectives IKEA wants to achieve in the UK market. It is divided into four categories; sales promotions, social media advertisement, publicity and events/experiences. Their objectives can be achieved by relatively focusing on them and take keen measurements on each of them through different departments of the company sales, PR.

7.0. Conclusion and recommendation
In summary, based on the marketing plan IKEA has built a strong position in the UK market in its own way. Even though they are at a good position they should continue to develop their products and services. Having a great market share in the UK market showing it has greater sales than other firms.
Regarding the situational analysis, IKEA is exposed to few threats such as the brexit in the nation which is so uncertain and can have unpredictable outcome though IKEA wants to still grown in the country.
In addition, based on the competitor’s analysis, IKEA is subjected to less threat, but not in a case where there is none. With a fast growing economy and rising demands IKEA is focused on always providing the best quality products and affordable prices to its customers compared to the competitors in the market, who maybe providing it either very expensive or relatively the same.
Their marketing strategy is made of the use of ansoff matrix and STP model. IKEA is into a lot of product development and innovations but is focused to provide them in same market. IKEA targets young couples, university students who want the latest furniture at an affordable style.
Furthermore their marketing program is quite strong. With the help of the marketing mix, IKEA has proven to be a retailer with great marketing strategies in UK and around the globe. They have used every element of the mix in order to be successful, satisfy their customers and employees and grab attention through its promotions and advertising.
Finally, the marketing plan will enable IKEA to achieve the objectives they have set to accomplish within the given period of time using their various means of advertising, promotions, publicity and events to gain an advantage.
In order to make it successful, this marketing plan provides some recommendations;
• IKEA should be aware of the situation in the UK and act accordingly to what would be greater for the firm.
• They should be aware of any competition in the market and grow to out beat them.
• They should expand rapidly and target different customers with different needs in order to have a better competitive advantage.
• With their strong recognition they should increase their awareness.

8.0. References
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Allen, K. and Butler, S. (2016). The way we shop now: the revolution in British spending habits. online the Guardian. Available at: Accessed 28 Apr. 2018.
Barnett, E. (2017). Ikea to sponsor over Xmas. online Available at: Accessed 28 Apr. 2018.
BBC News. (2017). Ikea sees annual UK sales top £1.8bn. online Available at: Accessed 28 Apr. 2018. (2018). Mattresses. online Available at: Accessed 28 Apr. 2018.
Bulletin, T. (2015). IKEA reports strong sales growth in UK | The Retail Bulletin. online The Retail Bulletin. Available at: Accessed 28 Apr. 2018.
Butler, S. (2017). Ikea to create 1,300 UK jobs in three new stores. online the Guardian. Available at: Accessed 28 Apr. 2018.
Davies, R. (2015). Ikea sales bounce in Britain thanks to mattresses and meatballs. online the Guardian. Available at: Accessed 28 Apr. 2018.
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Howard, E. (2016). Ikea vows to be net exporter of renewable energy by 2020. online the Guardian. Available at: Accessed 28 Apr. 2018.
Gibson, E. (2017). IKEA lab Space10 launches website to “revamp” co-living for 2030. online Dezeen. Available at: Accessed 28 Apr. 2018. (2017). Working at IKEA | online Available at:,15.htm?countryRedirect=true Accessed 28 Apr. 2018. (2018). IKEA. online Available at: Accessed 28 Apr. 2018.
IKEA, T. and Group, A. (2017). About the IKEA Group – IKEA. online Available at: Accessed 28 Apr. 2018.
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Mishra, B. (2014). How IKEA uses social media to emerge a marketing success – ET Retail. online Available at: Accessed 28 Apr. 2018.
Pandolph, S. (2017). Ikea set to debut an augmented reality app. online Business Insider. Available at: Accessed 28 Apr. 2018.

Renney, J. (2017). Ikea breaches of employment regulations. online Available at: Accessed 28 Apr. 2018.
Ruddick, G. (2015). Ikea eyes British high streets with new small store plans. online Available at: Accessed 28 Apr. 2018.

Sky News. (2017). Ikea raises UK prices after imports hike following Brexit referendum. online Available at: Accessed 28 Apr. 2018.

Statista. (2015). Bed and bedroom furniture retailers UK market share 2015 | Statistic. online Available at: Accessed 28 Apr. 2018.
Statista. (2017). Number of visits to worldwide 2010-2017 | Statistic. online Available at: Accessed 28 Apr. 2018.
Statista. (2017). Unemployment rate 2017, by region | UK Statistics. online Available at: Accessed 28 Apr. 2018.
Stevens, B. (2018). Ikea CEO announces dramatic “transformation” plans – Retail Gazette. online Retail Gazette. Available at: Accessed 28 Apr. 2018.
Turula, T. (2017). IKEA is transforming into a full-fledged tech company – starting with its new Apple and Amazon partnerships. online Available at:–and-its-a-giant-leap-away-from-wrenches-and-flat-packs-2017-6 Accessed 28 Apr. 2018.
U.K. (2017). IKEA hikes UK prices as sterling slump drives inflation. online Available at: Accessed 28 Apr. 2018.
U.K. (2017). IKEA hikes UK prices as sterling slump drives inflation. online Available at: Accessed 28 Apr. 2018.
Vaughan, A. (2016). Ikea starts selling solar panels in UK stores. online the Guardian. Available at: Accessed 28 Apr. 2018.
Vizard, S. (2017). Ikea’s UK marketing boss on evolving how it talks to customers. online Marketing Week. Available at: Accessed 28 Apr. 2018.
Williams, R. (2016). Ikea launches wireless charging furniture range. online Available at: Accessed 28 Apr. 2018.
Williams-Grut, O. (2017). Brexit ‘challenge’ pushes up IKEA’s UK costs by 13%. online Business Insider. Available at: Accessed 28 Apr. 2018.