Strengths
1. Customer knowledge. IKEA keeps tracks of its customers and their preferences. They know the purchasing factors, trends and the desire of the customers. The make huge range of products which are available at the affordable prices along with that they are ready to assemble and mostly simple in design. But they mould design in such a way that it looks elegant as well and fresh to the eyes. These factors lead to the higher sale of their furniture. Without such extensive customer knowledge and best practices to benefit from that knowledge, IKEA would not have been able to outcompete its current competitors.
2. Constantly using innovations to drive costs down. IKEA keeps it eye on the cost of its products as low cost is one of the most …show more content…
Supply chain integration. Suppliers are the main component of IKEA’s business model as they help in maintaining the low cost and high quality. This is only possible as the suppliers are given assuarity of constant orders. IKEA sources its materials close to the suppliers. They use IWAY approach to integrate suppliers with its supply chain effectively. These all techniques helps in gaining the competitive advantage over the competitors.
4. Brand reputation and market presence. As per Interbrand IKEA is the most valuable furniture retailer brand in the world with a net worth of USD 12.8 Billion as on 2012. With 322 stores across 38 nations in 5 continents it has spread its network all over. It is present in all the mojor world markets. With over 600 million customers visiting their stores every year they have developed strong market presence and dominance as well.
5. Diversified product portfolio. As compared to its competitors they have entered into many businesses. Apart from furniture they are also present restaurant, houses and flats businesses. Even though they have diversified businesses still they don’t lose their core competency of furniture manufacturing and …show more content…
Standard products. The only advantage of IKEA is its low cost products which are achieved because of standardized products. SO they attract fewer customer segments. This allows its competitors to fill that niche and fortify their position in it.
Opportunities
1. Further expansion into developing economies. There was growth of 5 % in emerging market in the last year, opening huge opportunities for IKEA’s revenue growth. The company has still to develop its foothold in the developing economies as compared to their hold in the developed countries. There are great opportunities for the company in Brazil, Mexico, Indonesia and Malaysia which can increase its growth rate further.
2. Growing online sales. Online retail sales are 17% and 4% of total sales in US and UK respectively. Online sales grew at a steady rate with 870 million visitors to its website each year they could exploit this opportunity and improve their sales.
3. Expansion to growing grocery market. There has been increased demand of grocery products in many developed nations because of increase in healthier food habits. There is still scope for IKEA to expand its business by introducing more grocery stores in its current retail places. As the company is well equipped so that can manage this change as they already are managing food outlets which of different domain.
1. Customer knowledge. IKEA keeps tracks of its customers and their preferences. They know the purchasing factors, trends and the desire of the customers. The make huge range of products which are available at the affordable prices along with that they are ready to assemble and mostly simple in design. But they mould design in such a way that it looks elegant as well and fresh to the eyes. These factors lead to the higher sale of their furniture. Without such extensive customer knowledge and best practices to benefit from that knowledge, IKEA would not have been able to outcompete its current competitors.
2. Constantly using innovations to drive costs down. IKEA keeps it eye on the cost of its products as low cost is one of the most …show more content…
Supply chain integration. Suppliers are the main component of IKEA’s business model as they help in maintaining the low cost and high quality. This is only possible as the suppliers are given assuarity of constant orders. IKEA sources its materials close to the suppliers. They use IWAY approach to integrate suppliers with its supply chain effectively. These all techniques helps in gaining the competitive advantage over the competitors.
4. Brand reputation and market presence. As per Interbrand IKEA is the most valuable furniture retailer brand in the world with a net worth of USD 12.8 Billion as on 2012. With 322 stores across 38 nations in 5 continents it has spread its network all over. It is present in all the mojor world markets. With over 600 million customers visiting their stores every year they have developed strong market presence and dominance as well.
5. Diversified product portfolio. As compared to its competitors they have entered into many businesses. Apart from furniture they are also present restaurant, houses and flats businesses. Even though they have diversified businesses still they don’t lose their core competency of furniture manufacturing and …show more content…
Standard products. The only advantage of IKEA is its low cost products which are achieved because of standardized products. SO they attract fewer customer segments. This allows its competitors to fill that niche and fortify their position in it.
Opportunities
1. Further expansion into developing economies. There was growth of 5 % in emerging market in the last year, opening huge opportunities for IKEA’s revenue growth. The company has still to develop its foothold in the developing economies as compared to their hold in the developed countries. There are great opportunities for the company in Brazil, Mexico, Indonesia and Malaysia which can increase its growth rate further.
2. Growing online sales. Online retail sales are 17% and 4% of total sales in US and UK respectively. Online sales grew at a steady rate with 870 million visitors to its website each year they could exploit this opportunity and improve their sales.
3. Expansion to growing grocery market. There has been increased demand of grocery products in many developed nations because of increase in healthier food habits. There is still scope for IKEA to expand its business by introducing more grocery stores in its current retail places. As the company is well equipped so that can manage this change as they already are managing food outlets which of different domain.