IKEA SWOT

In the past years, there have been numerous changes in the retail industry (Braatz, 2002). With the success of the Internet, retailers have quickly adapted to the online market and recognize

Value and image are equally important for being the biggest reasons for IKEA’s growth and popularity. Value is important because for the majority of people this is their main criteria. The value the people receive from IKEA are portrayed through the cost, quality, and style of the product. These three terms if done correctly will continually help IKEA’s growth and popularity. The image of IKEA is what helps IKEA stick out amongst its competitors. The image is one of a

* IKEA’s low cost structure has been the very core of its success. It’s low-cost and high-quality strategy fits with the current state of the economy. Offering convenience factors within IKEA’s stores would fit well with IKEA’s low cost structure. It maintains its low-cost business model by creating a different furniture shopping experience. IKEA supplies customers with all possible materials needed to complete their shopping when they enter the store (that are, measuring

A SWOT analysis is an analysis based on the strengths, weaknesses, opportunities, and threats of a company. SWOT analysis is the first phase in gathering information for strategic planning (Wheelen, Hunger, Hoffman, & Bamford, 2015). A SWOT analysis plays a significant role in strategic planning because it is the discovery phase of what the company needs to succeed. It is a tool used to examine a company’s state of health and improve on its opportunities. It gives a detailed understanding on areas that need attention as well as areas that are striving. It also gives companies a clear view of the advantages and disadvantages they have over their competitors. A SWOT analysis was created for The Home Depot to get a better understanding of the company and its strategic planning.

IKEA kindly asks customers who have a RUND glass mug to immediately stop using the glass mug and bring it back to any IKEA store for a full refund. Secondly, customers should choose the products according their needs without taking help from an IKEA sales person. It could be seem as a negative effect, but IKEA has a solution to solve this problem. They provide pencils, paper, tape measures, store guides, catalogs, shopping cards and bags and strollers which help customers for choosing the products easily and those are available at the store entries. Also the showrooms that are set up by IKEA in the store help buyers to decide easily. The cost of the IKEA products is low due to the standard market prices. Prices of the products attract customers. However, the quality is low because of the low prices. For instance, appearance of the product seems good to the buyer and the outside material of the product is qualified while low quality materials are used inside the product. The other reason of low prices is products are not assembled and there is no transportation cost for the market. Thirdly, there are both negative and positive affects that IKEA uses disassembled goods. Other companies send the product to your place after a while, but you can take the product to your place right after you buy it in IKEA stores. However, some customers especially in the US do not prefer assembling the

Once IKEA identified and understood the consumers (i.e. abandoning metric measured appliances and beds for American standards of size and comfort), they were able to double revenues, from $600 million in 1997 to $1.27 billion in 2002. From this analysis, it is possible to infer that IKEA combined their already successful cost leadership strategy with the properly identified needs of its target market, the American consumer. With this modification of the value chain, IKEA increased revenues and is pointed in the right direction to achieve their growth goals for 2013. As seen in Appendix 1, their projected growth is well into 8% per year, in relation to total projected growth.

The SWOT analysis provides information that is helpful in matching the firm’s resources and capabilities to the completive environment in which it operates. As such, it is instrumental in strategy formulation and selection. The followings are show how a SWOT analysis fits into an environmental scan.

IKEA has marketed its products well and has dealt with all the problems easily. But there have been some constraints that came in the way of IKEA and alternative strategies have to be developed for them. These strategies are as follows:

Swot analysis is a planned procedure used by an organization in developing strategic plan for goal and mission accomplishment as well as marketing plan. Swot analysis comprises of scrutinizing an organizations strength, weakness, opportunities and treats in its business environments. Swot analysis explores two types of environments. The first is the internal environments and the second is the external environment. The internal environments emphasizes on the strength and weakness of the business and the external focuses on the opportunities and threats. Swot analysis helps an organization to ask question like what makes as strong as an organization or what makes an organization weak. The opportunities that are available in the market

Highly competitive market brings IKEA weaknesses such as magnitude of the global business that is or isn’t capable of managing stakeholders, product differentiation, suppliers’ issues of not abiding by IKEA Group Code (IWAY code) in to limelight. Other weaknesses of IKEA i.e. ineffective communication and information exchange with its consumers and stakeholders due to huge scale of business operations are also identified (Johansson et al., 2008).

market as many consumers actively buy into the cost-conscious mentality. Furthermore, the standard of living is higher than most countries. Quality is highly important as consumers are driven by value and demand quality products (Ferrell & Hartline, 2014). Ringstrom (2016) acknowledge that, IKEA relishes in the fact and status that they are a place for individuals that enjoy value and have thin wallets. The goal is to make customers and potential customers aware of their higher-quality goods all the while maintaining a popular appeal. They essentially build their success from low priced goods and

The threat of substitute products and services is low as there are no too many products and services available that can substitute the demand for furniture, home appliances and a range of other products offered by IKEA. For instance the need for furniture or appliances (e.g. chair, mattress) for basic and decent accommodation is inevitable, unless the individual decides to follow

SWOT Analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favourable and unfavourable to achieving that objective. The technique is credited to Albert Humphrey, who led a research project at Stanford University in the 1960s and 1970s using data from Fortune 500 companies.[1]

Strengths - What are the advantages? What is currently done well? (e.g. key area of best-performing activities of your company)

Growing diversity is making it more difficult for many specialists to adequately address the needs and expectations of all of their target customers – a critical requirement for success in the specialty store arena. Diversity is also propelling more retailers to tailor assortments and adjust merchandising tactics on an individual store basis. Previously, many only altered the offer to reflect regional seasonal variations and market size differences.