What Are The Strengths And Weaknesses Of Ikea

SWOT analysis consists of data analysis with both internal and external factors within a business. The management tool consists of four different factors that include: strengths, weaknesses, opportunities and threats. Analysing these components allows businesses to make important management decisions to improve their business. Elements such as strengths and weaknesses are internal factors that are taken into consideration whilst being compared with other competitors (Fong, 2007). The strengths that M&S have within their competitors is their diversity of quality products and services and that they are an international company operating in many countries. Similarly they are in diverse locations within the country such as having stores across high streets and out of town retail parks (Corporate.marksandspencer.com, 2014). Having the ability to use management

IKEA is rumored to be a very standardized retailer, i.e., a certain set of marketing strategies is used that are the same around the world. This indeed sets IKEA, operating on markets in Europe, US as well as Asia and Australia, apart among international retailers. Often the theoretical conclusions in international

Given the SWOT analysis presented in the case, what are IKEA 's key competitive advantages? What strategic focus should the company take as it looks to further expand into the U.S. market?

The concept of IKEA today with catalogue marketing combined with a showroom where customers could see and touch IKEA products started in the 1950s. This concept indeed attract consumer even though some consumer tends to take picture instead of experiencing and purchase. The company's three distinct features were function, quality, and low price. IKEA turned a capacity problem into a new way of

IKEA, founded in 1943 by Ingvar Kamprad, has a vision “to create a better everyday life for the many people”. With its business idea of “offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them”, IKEA’s operational processes continues to focus on creating quality products and services at low costs as well as environment sustainability. (IKEA, 2016) More than being a furniture merchant, IKEA sells a brand that is easily recognizable, chic, stylish, minimalist and modern. It believes that everyone will leave IKEA store with something they like, be it the products or services. Its success is evident internationally where there are more than 300 stores in 35 countries. (Freden, 2015) The case study will

A different approach about Ikea’s success is given by Sara Kristofferson in her book Designed by Ikea, London 2014. In the first chapter, Kristofferson refers to the relationship between the swedish goverment and Ikea.

IKEA is a business that designs, produces, and sells a furniture to the worldwide market. The company was founded in 1940s in Sweden by Ingvar Kampard (Milestones, n.d.). IKEA brand has been known by customers and become to the world’s largest furniture company. In 2016 IKEA sales increased by 7.9% and total sales amounted to €34.2 billion. IKEA stores are in 28 countries and more than 340 stores. Also, it has an online shopping available in 14 countries (IKEA Group, 2017). A good perspective of IKEA founder has driven the company to be accepted in the marketplace. Kampard has used the word “together” for inspiring the company and IKEA employees to work in the same way. Several reasons have built IKEA more achievement and managed the global environment in terms of operating business, saving cost, managing employees, and expanding IKEA in a new country.

By operating the business in Thailand (foreign market), IKEA adopt the strategy called “Think Global, Act Local” in the sense that IKEA maintains, applies and upholds their core values and cultures in their practices, while learning to adapt and understand the Thai culture and the Thai market in terms of needs, desires and wants of Thai people in general in order to survive and succeed.

IKEA started to expand internationally in 1963, opening its first international store in Norway. It focused in the 1960s and 1970s on the European market. In its European expansion, IKEA used the same products and the same operational formulae. In Europe it was not necessary to change to adapt to local needs. However in America did the lack of adaption to the local market caused serious problems at the beginning. Some of the products did not appeal to American customers. For example, many Americans use bedroom chests to store sweaters, but the IKEA chests were too shallow. They maintained on core competencies because IKEA stuck with its low-price focus even when they were adapting to the local market. For instance they reduced marketing and logistics cost by concentrating several stores in the same area. In the US, IKEA started with four stores in the Philadelphia/ Washington DC/ New Jersey area to facilitate shipping products from the central warehouse to these stores.

IKEA is recognized as one of the reputed brands of Sweden, operating in the segment of ready-to-assembled furniture’s, fittings, appliances, and many others designed accessories and equipments. Although it entered in this segment in the year 1943 in Sweden but very quickly it expanded its operations in the markets of China as well. It is mainly due to its modern architectural stylish designs and eco-friendly nature. This helped Ikea to improve its brand image and profitability by almost 50 percent as compared to previous years. This proved extremely effective for Ikea to enhance its customer bases and reliability in the market among many other rival players (Inter IKEA

During the early years of the furniture retailing industry, it does not lend itself to globalization. It is almost unimaginable before that this industry would industrialize. But through innovations like in the case of IKEA, the industry was

Ikea is a renowned global furniture retail shop that was established by Kampard Ingvar in 1943(Bartlett, 2006). The business began as a grocery and stationery of mail order and later turned into furniture as its main business. Currently, it has over 292 branches in 34 countries globally. Ikea has been operating on the motto “better life for everyone”. Ikea focuses basically on good quality of household furniture and low prices of goods. Ikea strives to build a good social benefits structure and good customer care.

Even though there have been many changes in the economy Ikea has been able to regulate the changes with their success in obtaining the lowest production prices. The company continues to provide high quality furniture that goes with their original concept of stylish furniture for a low price. Ikea offers all kinds of products that cater to most any lifestyle and budget. Ikea still mostly operates their business in the European market. Consequently, they are able to reach more customers in different countries based on the location of their production and distribution centers. Even with the many changes to the economy Ikea has managed to stay in business with their low pricing by developing different products that is in demand by

IKEA’s strategy before the mishaps in America could be characterized as going against the norm charting their own path to success using low priced manufactures to secure lower selling prices aimed to target those who were of older age and of middle class standing. Their new strategy was to target those of a younger demographic, young married couples, college students, and 20-30 something singles. By reemphasizing design, promoting through hip quirky advertisements, and encouraging consumers to do away with their old furniture, IKEA revenues doubled in a four-year period. IKEA today has adapted somewhat of a local customization strategy where their store layouts will resemble that of many local household layouts as proven by their success in China where they failed to expand beforehand. They also keep their prices extremely low in some areas as China by sourcing a large percentage of products in the area of operation.

IKEA aims to develop inexpensive products doesn’t mean to sacrifice its promise to consumers – “A better everyday life”. Instead of low quality product IKEA tends to deliver its mission by better purchasing management. IKEA spread its Sweden designed furniture to manufacture in developing countries to keep the lowest production cost. With more than 1000 suppliers over 55 countries, approximately 62% of purchasing is from Europe and around 34% from Asia. (5)