IKEA SWOT Analysis

998 WordsJan 22, 20154 Pages
IKEA SWOT analysis Strengths Weaknesses 1. Customer knowledge 2. Constantly using innovations to drive costs down 3. Supply chain integration 4. Brand reputation and market presence 5. Diversified product portfolio 1. Negative publicity 2. Decreasing quality 3. Standard products Opportunities Threats 1. Further expansion into developing economies 2. Growing online sales 3. Expansion to growing grocery market 1. Intensifying competition 2. Growth of average consumer income 1. Customer knowledge. One of the key competitive advantages IKEA has is its extensive knowledge about the customers. The company understands the purchasing factors that influence customers to buy and implements the best practices to induce that decision. IKEA offers…show more content…
Firm’s cost reductions lead to decreasing product quality, which was followed by higher number of products returned and damaged brand. 3. Standard products. IKEA’s main competitive advantage derives from low costs, which in part are achieved due to standardized products. Standardized products attract fewer customer segments. Therefore, the business inability to offer better quality more customized products allows its competitors to fill that niche and fortify their position in it. Opportunities 1. Further expansion into developing economies. Retail markets grew by at least 5% on average in emerging markets in the last year, opening huge opportunities for IKEA’s revenue growth. The company currently operates in most of the developed economies but hasn’t firmly stepped into developing economies, except China. There are great opportunities for IKEA to expand into Brazil, Mexico, Indonesia and Malaysia to increase its presence in these markets to sustain future growth. 2. Growing online sales. Online retail sales account for 17% and 4% of total retail sales in UK and US respectively. Online sales grow constantly and with 870 million visitors to its website IKEA could exploit this opportunity and benefit from increased sales and lower costs. 3. Expansion to growing grocery market. The current trend of eating healthier food has resulted in higher demand for grocery products in many developed

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