Summary IKEA is a Swedish privately held, international home products company. It provides high-quality furniture at a low cost. It was founded in 1943 by 17-year-old Ingvar Kamprad (the company’s name is an acronym of founders name IK, the farm, where he grew up Kamprad, and his home parish – Agunnaryd). Since than company expanded into 28 countries and almost 300 stores. Ikea’s success is based on its marketing strategies, e.g. a furniture catalogue printed in 17 different languages, or its environmental policy. Ikea offers a wide range of products in one shopping location and of course its biggest plus is low prices, which make products available and affordable for many people. It has launched new sustainability plan to take the
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Social trends: IKEA is building online help to guide customers to a more sustainable life. Here it can focus on home improvement in the slowing housing market. It supports customers with tips and ideas on its website to reduce their impact on the environment. This will also save them money. Staff are trained on sustainability, both on what IKEA is doing and how they can take responsibility to become sustainable for themselves.
Market forces: IKEA is large enough to enjoy economies of scale. This lowers average costs in the long run through, for example, better use of technology or employing specialized managers. Economies of scale also give a business a competitive edge if cost savings are then passed on to customers in the form of lower prices. This puts up high barriers to entry for smaller companies entering the market.
Economic factors: IKEA’s low prices create appeal amongst its customers in tough financial times. It is vital to keep prices as low as possible when the retail sector is depressed. IKEA’s pricing strategy targets consumers with limited financial resources. Its products will also appeal to those with higher budgets through good quality and design. The company must ensure that it is always recognized as having the lowest prices on the market in the future.(1,2) 4. Discuss the contribution of SWOT analysis to IKEA’s business growth.
SWOT analysis is one of the most useful method to