Pest Analysis Of IKEA

The use of PEST analysis can be seen effective for business such as their strategic planning, marketing, and product development. Furthermore, PEST ensures that company`s performance is aligned positively with the powerful forces of change that are affecting business environment (Porter, 1985). PEST have four factors which are Political, Economic, Social, and Technological. However, we use these factors to check how they interplay to the business or the activity of an organization.Using PEST analysis is important when a company decided to enter its business operation into new markets and new countries. In this case, using PEST will help to adapt effectively to the realities of the new environment and to make contingency plans for threats by preparing business and strategic plans (Byars, 1991; Cooper, 2000).

A department store (NAICS 45211) is a retail establishment that offers the customers a wide range of consumers goods in different product categories known as departments. This industry is engaged in selling apparel, appliances, home furniture, and diverse items such as paint, cosmetics, furniture, toys, and sporting goods. In this industry, merchandises are separated by departments. Major companies in this industry are Dillard’s, JCPenney, Macy’s and Sears. According to Hoovers.com the department store sales have been strongest in Europe, Japan and the US, also the US department stores comprises about 20 companies that operates about 3,250 stores with a combine revenue around $55 billion. The Global department store market is forecast to grow at an annual rate of 5.4% between 2015 and 2020. The profitability of the retail companies depends on the effective merchandising, marketing and high customer traffic (Hoover.com), also the department stores sales are highly seasonal increasing during holiday shopping. The department stores sales have been decline in the past decade due to competition with discount stores, specialty stores and the internet are making shopping so much easier. The industry is highly concentrate.

IKEA’s main competitive advantage derives from low costs, which in part are achieved due to standardized products (JUREVICIUS, Ovidijus, 2013). IKEA has been setting up many new stores in different countries all over the world. While most purchases are still done in the European market (59%), the Asian market has expanded quickly (currently 35%) (IKEA, 2014). This expanded market, caused by growing wealth in Asia, created the option to lower costs even more due to economies of scale. The ability to keep selling standardized products however is decreasing quickly with this expansion of the company. IKEA has experienced first-hand that cultures differ too much to keep the old system of ‘one-size-fits-all’

In this essay, we will examine the internationalisation process of IKEA, Swedish Company founded in 1943 and the world's lieder in supplying home furnishing at low price with imaginative styles and application facility. In addition, we will describe from the different frameworks that have sought explain the Internationalisation process, the factors that have taken this company to perform its international expansion. From to be a simple local shop in a small town in Sweden 60 year ago, to be an actual powerful multinational with more than 76.000 employees and shops in more than 43 countries.

Bed Bath and Beyond is struggling in the current market. This PEST analysis is aimed at determining what the major Political, Economic, Social, and Technological are in current business environment, and how these factors are affecting the Home Goods Retail industry. The modern polarized political sphere, especially in the United States, can mean that elections result in a massive change in policy, especially regulatory reforms on businesses. With an increasingly global and fluctuating economy, modern businesses need to be aware of everything from regional tax rates to international tariffs. Social norms are changing rapidly and are different from region to region, meaning that modern business’ needs to be aware of the social landscape they are operating in. Finally, the rate of technological growth is the highest it has been in the history of the Earth. All of these rapidly changing and nuanced factors need to be studied and well understood in order to run an efficient and effective modern business. All of these four factors are imperative in understanding why Bed Bath and Beyond is in its current financial situation.

Bargaining Power of Buyers - The force of the buyer’s bargaining power can reduce prices and demand higher quality products and services (Porter, 1998).

The success of the industry was the huge experiences in the product differentiation, cost leadership and retail market. IKEA unique concept is that furniture is sold in kits that are assembled by the customers at home. The company remains one of the world most successful multinational retailing firms, operating globally. This report will explains IKEA internal and external environment using PESTLE, PORTER FIVE FORCE AND SWOT. Furthermore IKEA globalisation and localisation strategy breakdown will be examined, CSR and ethic and recommendation will be also examined.

My main strengths are setting goal and self-monitoring for self-regulated learning. Goals are the basic step of studying and learning, which represent the aim to accomplish and a commitment to a particular outcome. Also, goals are so important in my leaning procedure because it is a motivation and a challenge. Setting goals helps me break things down and leads to more effort and intensity. When I attain my goal, I will be motivated for next goal. However, not all goals are effective, we need to set a good goal by using the concept of CAST. C stands for concept, which is specific topics, chapters, terms, and idea to master. A stands for action, which is specifying the kind of thinking and applying it. S stands for standard, which

Strategic alliances could reduce the complexity of logistics if IKEA is able to find a reliable partner in this field.

Customer’s bargaining power: The bargaining power of customers is medium. There a huge number of customers, not well organized to defend their interests. Additionally, the

The economy, the trade practices, and agreements are factors that help understand the purchasing power of customers, thus it deals with income, prices, savings, debts, and GDP. When a company has the intent of going for globalization, they have to carefully observe and study those factors, in order to have an appropriate marketing mix and in particular a price that is adapted to the country they are targeting. IKEA is present in industrializing and industrial economies where there is

In this business report on the global retail business IKEA, it will cover the nature of business, influences on operations, operation processes, operation strategies and how the business can sustain competitive advantage. IKEA was founded in 1943 by Ingvar Kamprad in Älmhult, Sweden. The business established after and with the money his father awarded him for succeeding in his studies, Kamprad sustained a cash inflow by selling pens, wallets, watches, picture frames, table runners, jewellery and nylon stockings at reduced prices to customers. Although, later on in 1958, IKEA was introduced as a leader of Swedish Furniture Company as they started to produce local furniture by the Swedish local manufacturers, which gained positive attention from their customers. Eventually, developing flat packs of furniture for storage and self assembly, making their signature style of IKEA and turning the small business into a global sensation.

IKEA is one of the most successful manufacturing and retail furniture companies operating in today’s global marketplace. IKEA manufacture from the bottom up, top down furniture that offers environmentally friendly, state of the art designed furniture that is both affordable and attractive to its customers via their online, catalogue and worldwide distribution channels, with a logistics network that are low cost footprints with the enforces on cost efficiencies couple with technology, product design, excellence and customer satisfaction. IKEA was founded by Ingvar Kamprad in a small village in Sweden. Its Scandinavian–style home furniture offer attractive designs at affordable prices. And IKEA is obtainable from 275 stores

IKEA’s Global approach focuses on the personal values and company’s belief, which is about how IKEA treat its employees and customers. Ingvar Kamprad, the founder of IKEA, tries to transfer his values and belief, which is operation in a no-frills, cost-conscious way to store managers and employees. And the most important is he wants that they are all in business “together”, by which he means that every person who works in his global empire plays an important role and has an duty to everyone else (Jones, 2013).

PESTEL analysis is a method used to study macroeconomics - the macroeconomic environment of an enterprise. Otherwise, it is called the general segmentation of the environment. It defines the basic spheres of the environment, which are areas that have a crucial impact on the functioning of the organization. Also marks the future strategy of the organization through an in-depth analysis.