Ikea Case Study Essay

2490 Words May 24th, 2012 10 Pages
BACKGROUND INFORMATION

IKEA is an internationally known home furnishing retailer. It has grown rapidly since it was founded in 1943. Today it is the world's largest furniture retailer, recognized for its Scandinavian style. The name IKEA comes from the first letters of IKEA’s founder Ingvar Kamprad and the names of the farm and village where he grew up Elmtaryd Agunnaryd. Although the soil was thin and poor in Ingvar’s village, people had the reputation for working hard making the most out of limited resources. Ingvar applied the lessons learned from his village to the home furnishing market.
Nowadays, IKEA’s vision is “to create a better everyday life for the many people by offering a wide-range of well designed, functional home
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So in their endeavor to conquer the giant markets we think that symptoms of the same nature may emerge again, so they have to find alternative ways to proceed.
What strategy should IKEA follow in its effort to expand globally?

SWOT ANALYSIS

A very important tool in strategic decision making for the companies is SWOT analysis. Therefore in this case analysis, the SWOT model will be used to help IKEA choose the right strategy to expand globally.

Internal analysis
Strengths:
- IKEA has a strong global brand which attracts key consumer target groups, promising the same quality and price levels worldwide.
- IKEA developed a business model that enabled it to keep low unit cost and benefit from economies of scale.
- IKEA’s association with Scandinavian design is a point of differentiation.
- IKEA’ product offer reaches an ideal balance between function, quality, design and price.
- Supply chain management and the excellent international procurement process. IKEA’s suppliers stretch to 2,300 in 2005 and were located in 67 countries. IKEA creates long-term partnerships with its suppliers. It provides them with leased equipment and technical advice and commits them with

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