SWOT Analysis Of IKEA

Improved Essays
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.

Related Documents

  • Improved Essays

    In marketing, it is mandatory to know one’s audience or market. There are multitudinous things to consider when identifying a target market. It is vital to understand the wants, resources, and buying habits of the habitué. With the help of market segmentation, large groups of people in a market are broken down into smaller groups. By using segmentation, it is more facile to define and cater to a specified group of people.…

    • 832 Words
    • 4 Pages
    Improved Essays
  • Decent Essays

    Mkt 421 Week 4 Starbucks

    • 656 Words
    • 3 Pages

    The firm has demonstrated a great capability to grow its market-share, increase its earnings consistently year over year, and the firm is able to add new stores in different regions in the last decades. The successful aspects due to the company?s business belief, a great logo image, and a great management to sustain and grow its business worldwide. Reference August, R., Mayer, D., & Bixby, M. (2013). International business law: Text, cases, and readings (6th ed.).…

    • 656 Words
    • 3 Pages
    Decent Essays
  • Improved Essays

    Rhetorical Analysis of a day in the life of an IKEA Advertisement IKEA is a large Swedish company that stocks products needed for home life in a maze like warehouse with well known chains located around the U.S. and other countries. I came to know of IKEA shortly after becoming a first time homemaker; the ease of shopping for items I needed and did not know I needed became a simple task and felt that by analyzing this ad I could bring attention to a must go to shop for first time homemakers. I chose to analyze an IKEA ad meant to promote a serving cart that targets homemakers and beckons viewers to look inside of their catalogue for more low priced items. The purpose of the ad is to encourage consumers to beautifully furnish their homes by…

    • 1071 Words
    • 5 Pages
    Improved Essays
  • Improved Essays

    Sherman’s, Lowe’s, and Sears all offer a different breadth of merchandise and depth of merchandise that distinguish each retailer apart from one another. All retailers some have better benefits than others such as Sherman’s assistances their customers in selecting the appropriate appliances based on the consumer's needs. Sherman’s staff are very knowledgeable in each category of appliances, whereas at Sears you won’t expect the same kind of customer service. At Lowe’s you’ll find great customer service and knowledge within each individual department in which they operate. Sherman’s offers a deep depth of merchandise in the form of more models, sizes, and brands that are available compared to a department store.…

    • 671 Words
    • 3 Pages
    Improved Essays
  • Superior Essays

    Honest Jim Company Essay

    • 1555 Words
    • 7 Pages

    Industry background The crack of the twentieth century observed the birth of the automobile industry. Tampering by bicycle, motorcycle, and machinery entrepreneurs in Europe and the United States led to the first prototypes of automobiles in the late nineteenth century. Similarly, Honest Jim car sales company was not a rapid settlement.…

    • 1555 Words
    • 7 Pages
    Superior Essays
  • Improved Essays

    Ikea Stereotypes

    • 534 Words
    • 3 Pages

    When you think of furniture stores Ikea is probably one of the first places that come to mind. Ikea is the world’s largest furniture store. The company has been around since 1943. Since 1943 the company has generated 2.1 billion visits. The store is extremely popular.…

    • 534 Words
    • 3 Pages
    Improved Essays
  • Superior Essays

    Maria Paula Diaz Campo Prof. Yasbel Acuna-Borrero ENC 1101 – Writing and Rhetoric Tuesday, October 26th, 2017 Ikea really is simple It is well known that Ikea is on the way to global domination, facts such as that one in every fourteen people in the world visit their stores every year, one out of every ten Europeans are conceived on one of their beds, every year more copies of their catalogues are printed than of the Bible, and that they are the world’s third-largest consumer of wood, are all amazing, but what’s most interesting is the way in which they achieve these results, the marketing strategy behind their success. (MacGauley) The concept of Ikea lies in the idea of making simple, easy to assemble and affordable furniture, with design,…

    • 1916 Words
    • 8 Pages
    Superior Essays
  • Decent Essays

    • Intangible assets: o The brand name of H&M has a strong reputation in the market. It was ranked 21st among the top 100 most valuable global brands according to Interbrand in 2015 o H&M has an integrated IT system that is highly reliable to ensure the supply and demand, monitor customer needs and preferences based on sales patterns. Competences • Culture o The business strategy of H&M is to offer “cheap-and-chic” or “fashionable and elegant clothes at affordable prices”. One of the main factors to achieve the strategy is the company strong culture.…

    • 1038 Words
    • 5 Pages
    Decent Essays
  • Improved Essays

    Bob Nardelli joined the Home Depot team in 2000, when it was already successful. However, he also joined during a time when the company had grown so rapidly so quickly that changes needed to be made. While he created his own change model, had he known about Kotter and Cohen’s 8-step change model, he may have met fewer challenges (Kotter & Cohen, 2002). When Nardelli first arrived at Home Depot, he was deemed an outsider of a close-knit organization. Nonetheless, the board had made the decision that he was the best person for the task at hand.…

    • 866 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    Parnell (2014) defines corporate strategy as the approach that a firm’s executives use to guide the firm’s direction (p. 151). The text discusses three different strategies: growth, stability, and retrenchment. A firm that is focused on increase its market value or revenue is said to have a growth strategy (Parnell, 2014, p. 153). Home Depot’s corporate approach is the growth strategy, demonstrated by its increasing revenue. Home Depot’s 2015 Annual Report (2016) states that Home Depot’s revenue increased by 6.4% over the previous year (p. 1).…

    • 657 Words
    • 3 Pages
    Improved Essays
  • Improved Essays

    Ikea Outsourcing Essay

    • 850 Words
    • 4 Pages

    Ikea outsourcing is solely based on the dependency on capacity enable Ikea to reduce capital investments and achieve scale of economies. For instance, Ikea was able to save on procurement costs as compared to glass sourced from rest of the world. Collaboration between Ikea and stakeholders enables high volumes of glass manufacturing in China, thus achieving economies of scale for both the manufacturer and…

    • 850 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    Accordingly, these important features enable IKEA to implement their new strategy by expanding across the world smoothly. Consequently, the hierarchy management will simplify the plan of achieving objectives, and define roles and responsibility for the individuals. Moreover, there are many management levels within the structure which suite IKEA as their chart reflects increasing in employees moving from top to down. Thus, each level is built based on the function which reflects the functional organization. Therefore, this structure draw definite path for effective communication within each function across the organization (Junichiro,…

    • 867 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    IKEA employed another market strategy which was to research the Japanese market and after five years IKEA understudied the Japanese market by studying 100 homes; its peculiarities and customers IKEA final decided to re-enter using other marketing approach. IKEA set up directly in the market by opening two retail outlet owned by IKEA in 2006 located in Funabashi and in Kohoku. The opening of a sophisticated shop that could house about 40,000 persons with a restaurant that could seat 700 persons, this approach created awareness among potential customers and also intimidate the local competition with their grandeur. With the setup of several retail stores in Japan heavily invested in, IKEA has indicated its intention to succeed and dominate the Japanese market (Clayton 2013).…

    • 1494 Words
    • 6 Pages
    Improved Essays
  • Superior Essays

    “Consumers Are Almost Like People”: Interpellation, Ideology and IKEA In 1976, Ingvar Kamprad produced his manifesto, “The Testament of a Furniture Dealer”. The intention of the writing was to give instruction to his IKEA co-workers about how “to create a better everyday life for the many people” through the adoption “of [a] framework of ideas” designed to “be a beneficial influence on practically all markets” (1976, pp. 2-3). By adopting such an ideological position, IKEA has been able to create a discourse that shifts the problems produced by notions of consumerism and consumer capitalism into a discourse of choice, freedom and happiness. O 'Shaughnessy & Stadler argue that through “language, texts and representations” within genres, it is…

    • 1479 Words
    • 6 Pages
    Superior Essays
  • Improved Essays

    In order to remain competitive, IKEA must be willing to localize elements of their global marketing strategy in order to meet the cultural norms and expectations of consumers within emerging nations. 2 U.S. Market Experience IKEA entered the U.S. market in 1985 in Philadelphia, and spent its first decade within the new market struggling with low sales, not opening a single store between 1993 and 1999. Initially, IKEA’s U.S. business was comparable to that of exporter, shipping the Swedish designed and manufactured products directly into the U.S. and selling them within the stores. After a long period of slumping sales and negative customer feedback, IKEA realized they would need to adapt minor elements of their marketing strategy in order to better serve the tastes and expectations of American consumers. 2.1 Brand…

    • 1121 Words
    • 4 Pages
    Improved Essays