IKEA: Becoming a Circular Business

Global furniture giant Inter IKEA Systems B.V. (IKEA) announced its intent to become a circular and climate-positive business by 2030. In order to achieve these goals, the company had to find ways for consumers to cycle end-of-life products back to its facilities. IKEA was implementing this process—known as reverse logistics—via international sell-back and leasing programs. It was unclear, however, if the company’s efforts would be enough to make its operations sustainable. Additionally, the question remained as to whether IKEA was truly focused on sustainability and responsibility or if it was simply attempting to maximize customer lifetime value.

This case is suitable for online or in-person undergraduate- and graduate-level courses in operations, logistics, marketing, and corporate social responsibility. Courses or modules focused on reverse logistics, circular economies, sustainable business models, product returns, end-of-life product management, and/or public policy would benefit from this case. This case is a useful tool for discussing circular economies, reverse logistics, closed loop supply chains, sustainability, corporate social responsibility, end of life product management, product returns, sustainable marketing, and/or public policy. Students are asked to explain the concept of a circular economy and articulate its potential benefits, and to explain how forward and reverse logistics differ. <br><br>After working on the case and assignment questions, students will be able to<ul><li>explain the concept of a circular economy and its potential benefits;</li><li>explain the key differences in forward and reverse logistics;</li><li>identify the key challenges in designing reverse-logistics programs;</li><li>assess the strengths and weaknesses of IKEA’s sell-back program; and</li><li>evaluate the extent to which IKEA is implementing a sustainable marketing approach.</li></ul>

• reverse logistics
• operations
• sustainable supply chains
• closed loop
• corporate social responsibility
• sustainable marketing
• circular economy