A woman is leaning over a table to make notes on a piece of paper. She is surrounded by woven lampshades of various sizes.

Breaking down the IKEA value chain

The term “value chain” sounds a bit technical, but what does it actually mean? The dictionary says it’s a company’s value-adding steps and activities to produce goods. But the IKEA value chain is that and more: it’s all about putting people first. Let’s disassemble the word to see how exactly it does that.

Value can mean many things, such as worth and meaning. To truly live up to our vision of “creating a better everyday life for the many people” we feel we have to create meaning in every step of our process. We do this by putting people first, all the way from material sourcing to home delivery.

The IKEA value chain starts with listening to people’s needs and dreams, so we understand how we can make a difference.

A chain is a series of connected elements. The IKEA value chain starts with listening to people’s needs and dreams, so we understand how we can make a difference. Typically, we start with a sketch or product idea and then discuss things with our suppliers. This often results in changes; all with a view to meeting our Democratic Design dimensions of form, function, long-lasting quality, sustainability and low price. Along the way, we’re always trying to improve the product. This could be a designer fine-tuning a prototype at the factory. Or perhaps a technician discovering a more sustainable material.
A yellow circular graph showing how the IKEA value chain starts with people’s needs, goes through design, production, distribution and finally people’s homes.
Our value chain starts and ends with learning from our customers and co-workers. The circle is formed by people who work together to listen and learn; design and create; manufacture and improve; package and distribute; inspire and sell.

The next step is something people might associate with the IKEA brand: efficient packaging and distribution. Flat packs keep transport costs down which lowers prices for our customers. They also make it easier for people to take products home themselves. Once the products are home, customers can play their part in keeping prices low by assembling them. Although customer expectations and our service offer might have changed over the years, our collaborative mindset hasn’t. We believe that by working together with customers, partners and co-workers, we can continue to add value to people’s everyday lives.

The chain ends at the start with learning from customers and co-workers, so we know how to improve. We realise we’ll never have all the answers, but we’re sure that working together we can continue to add value for people who dream of a beautiful and affordable home.