The Pest Analysis Of IKEA

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1. Introduction
IKEA is an international home products retailer that sells home products and accessories in their retail stores around the world. This company, which pioneered flat-pack design furniture at affordable prices, is now the world's largest furniture retailer. It was founded in 1943 by Ingvar Kamprad in Sweden, since then, the IKEA group has grown into a global brand with 127,000 workers in 41 countries. IKEA holds a mission to create a better everyday life at home for the many people and remains respectful towards the environment, resource and people by supporting various social causes. The following analysis would be based on the Singapore context.

2. PESTEL Analysis
2.1 Political
The political situation is stable and the political
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There is certainly many smaller scale furniture business setting up online locally, however to be of the equivalent global size like IKEA with huge retail presence is challenging, many newly set-up are still combatting with real issues such as OEM and talent pool (SRING Singapore, 2014). The manufacturers would need large amounts of capital to start up, build a factory and showroom, and to purchase technology to speed up the manufacturing line production, which required starting producing the specialty design and production. According to the Singapore Building and Construction Authority, the construction cost is estimated about S$51.8 million (Building & Construction Authority, 2016). This huge capital would be the barriers for start-ups that do not have the strong capital back up.
3.2 Threat of Substitutes - Low
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
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Singapore has been facing constant challenges for housing space due to limited land area and high population density. The decreasing land resource will inevitably contribute to smaller living conditions for future public houses. As such, IKEA should look into incorporating more space saving concepts in their product designs. Adapting to the market trends not only satisfies the market demand, IKEA can continue to maintain their competiveness in its industry. Most importantly, being a successful pioneer will differentiate IKEA from its competitors, allowing them to achieve higher profits and maintain if not achieve better brand

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