Ikea Assignment

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LIVERPOOL JOHN MOORES UNIVERSITY STRATEGIC MANAGEMENT TOPIC IKEA CASE STUDY SUBMITTED TO: MARILYN MAY STUDENT NO: C0362023 1.0 INTRODUCTION: Ingvar Kamprad Elmtaryd Agunnaryd (IKEA) was founded by a 17year old boy Ingvar Kamprad in a small town of Smaland in Sweden. IKEA is now the largest furniture retailer in the world. As of October 2010, IKEA has 313 stores in 38 countries most of them in North America, Europe, Asia and Australia. The IKEA group owns 276 stores in 25 countries and 37 stores run by franchisees outside the IKEA group in 16 countries. IKEA VISION: The IKEA vision is to create a better everyday life for many people. We make this possible by offering a wide range of well-designed, functional home…show more content…
MARKET FORCES: With more and more competitors like Target Corp. (TGT), Kmart etc, entering the low price furnishing and household markets, IKEA will have to be innovative and competitive at all times to compete with its competitors. ECONOMIC FACTORS: Due to recession, the disposable income of people has reduced, which is a big threat for companies like IKEA because the main target of the company is middle class sector and if they stop spending due to recession, then IKEA might have to come up with a more innovative and cheaper products. WAYS TO MINIMIZE THREATS: * Guiding customers to a more sustainable life through proper channels is important to control social threat as people would be more aware of what to spend on and what not to. * Economies of scale help in barriers to entry, by which market threat or competition can be minimized. * Due to its very competitive and low prices, demand for the product during recession is also high which can overcome economic threat. 3.2 PEST ANALYSIS: Pest analysis helps a firm to examine the external macro environment in which the firm operates and can be shown through the following: * POLITICAL FACTORS * ECONOMICAL FACTORS * SOCIAL FACTORS * TECHNOLOGICAL FACTORS POLITICAL FACTORS AFFECTING IKEA: Operating globally means IKEA operates in many stable and unstable political conditions, i.e. developed and developing
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