Ikea case study swot analysis and sustainable business planning

Customer knowledge 2. Constantly using innovations to drive costs down 3. Supply chain integration 4.

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Brand reputation and market presence 5. Diversified product portfolio 1. Negative publicity 2.


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Decreasing quality 3. Standard products Opportunities Threats 1. Further expansion into developing economies 2. Growing online sales 3. Expansion to growing grocery market 1. Intensifying competition 2. Growth of average consumer income 1. Customer knowledge. One of the key competitive advantages IKEA has is its extensive knowledge about the customers.

The company understands the purchasing factors that influence customers to buy and implements the best practices to induce that decision. IKEA offers …show more content…. Standard products. Standardized products attract fewer customer segments. Therefore, the business inability to offer better quality more customized products allows its competitors to fill that niche and fortify their position in it.

Opportunities 1. Further expansion into developing economies. There are great opportunities for IKEA to expand into Brazil, Mexico, Indonesia and Malaysia to increase its presence in these markets to sustain future growth. Growing online sales. Online sales grow constantly and with million visitors to its website IKEA could exploit this opportunity and benefit from increased sales and lower costs.

IKEA Presentation MAR 5125

Expansion to growing grocery market. The current trend of eating healthier food has resulted in higher demand for grocery products in many developed. Also, since communication is something that the organization can improve with its effort it is an internal factor.

On the flip side, external factors in SWOT analysis refers to the opportunities and threats. These factors are uncontrollable by the business itself. Some of the external factors that affect the business are the environmental factors, economic situation, changes in consumer behaviour, technological changes and political changes. For example, the recession slows down consumer spending and disposable income reduces which is a threat for a company.

Swot Analysis And Sustainable Business Planning An Ikea Case Study

This economic situation reduces the companies sales resulting in loss. And this situation is something that the company cannot change. Thus, the internal and external factors both are a part of SWOT analysis but both are very different from each other. However, if a company is aware of its possible threats, it can plan to counteract them.

IKEA has threats through the social trends, market forces and economic factors. For this IKEA generates new ideas and uses a particular strength to defend against these threats. One of the new ideas that IKEA has generated is building online help to manage the threat in social trends. IKEA is building websites to help guide customers to a more sustainable life. Through this online help it gives customers tips and ideas to reduce their impact on the environment. This idea will also save them money. Similarly, IKEA uses its strength of economies of scale to reduce the threat that it has in market forces.


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This advantage of economies of scale, lowers their average costs in the long run. For instance, better use of technology or employing specialized managers. This advantage also provides them with a chance of providing its consumers with lower price, increasing its competitiveness in the market and creating a barrier for new entrants.

SWOT analysis on IKEA A case study on IKEA SWOT analysis Strength

Moreover, IKEA uses its strength of low prices to create appeal among its customers in tough financial times reducing the threat from economic factors. The economic factor like recession slows down consumer spending reducing their disposable income. In these time the retail sector is depressed demanding to keep prices as low as possible. Their pricing strategy appeals to consumers with limited financial resources as well as those with higher budgets through good quality and design.

Therefore, IKEA has managed to minimise threats to its business by using a particular strength to defend against threats in the market like the ones mentioned above. With its branches world wide, it is vital for IKEA to have an exact information on the internal and external factors affecting their business and take decisions according to the findings.

IKEA case study SWOT analysis and sustainable business planning

The strengths of IKEA like having a strong global brand image, its vision, a strong concept and a democratic design have contributed to IKEA being able to attract and retain its customers. Through the opportunities of IKEA in the market like a growing demand for greener products, lower priced products and demand for reduced water usage and lower carbon footprints, it has been able to focus on the areas of its work with sustainability.

For instance it has been able to find solutions for a sustainable at home by giving tips and ideas online. Also, it aims to reduce carbon footprint using more renewable energy, cutting use of air transport and reducing packaging.