Financial Performance, Good Corporate Governance, and Market Resilience in The Furniture Retail Industry: an ARDL Approach with VRIO and Porter's Five Forces Strategic Analysis a Single Case Study of IKEA (Ingka Group)

Abstract

The global furniture retail industry faces persistent uncertainty arising from inflation, supply chain disruptions, geopolitical conflicts, and changing consumer purchasing power, increasing the importance of market resilience. This study examines how financial performance and good corporate governance influence IKEA’s market resilience and explains the internal resources and external competitive pressures that support its strategic responses. A sequential explanatory mixed-methods design was employed using a single-case study of Ingka Group. The quantitative stage applied the autoregressive distributed lag (ARDL) bounds testing approach to evaluate short- and long-run relationships among financial performance, governance, and market resilience, while the qualitative stage employed VRIO and Porter’s Five Forces analyses. The findings indicate that IKEA’s post-pandemic revenue recovery and its EUR 2.1 billion investment in price reductions reflect a long-term resilience strategy despite declining revenue and profitability in FY2024. Its foundation ownership structure, financial independence, and reinvestment of 85% of net profit provide valuable, rare, and difficult-to-imitate capabilities. Meanwhile, intense industry rivalry and strong buyer bargaining power explain the strategic emphasis on affordability. However, the proposed econometric relationships require confirmation through complete ARDL estimation. The study concludes that IKEA’s resilience is supported primarily by governance flexibility, long-term reinvestment, adaptive capabilities, and strategically managed financial resources rather than short-term profitability alone.