This document provides a situational and strategic analysis of IKEA and its future. It begins with an introduction to IKEA and its founding. It then conducts a situational analysis using SWOT, PESTEL and Porter's Five Forces analyses to examine IKEA's current position. It finds that while IKEA is a market leader, increased competition and economic challenges threaten its position. The document recommends strategies for IKEA to strategically maintain its long-term lead in this changing environment.
This case study is about a multinational company which sells ready to assemble furniture and home accessories. According to the economics records as at 2008 this is the world largest furniture retailer. (Forbes, 2013)
This report describes about the main strategies which IKEA use to approach to different markets with different consumers and with them IKEA has evolved into the largest furniture retailer in the world with approximately 300 stores in 38 countries and revenues topping $21.5 billion in 2009. Its top countries in terms of sales include Germany, 16 percent; United States, 11 percent; France, 10 percent; United Kingdom, 7 percent; and Italy, 7 percent. (Business week, 2005)
According to the final decision IKEA has made a different way of shop for furniture with the time develops and it has reach to the expectations of its customers according to their expectations.
Finally, in the conclusion of the report shows the final view of the researcher about the finding regarding to the IKEA strategies throughout the research and final judgment which make about the given case.
Firm Strategy for Global or Multi-domestic OrganizationsAssignment Studio
Firms are utilizing and adopting several strategies as per nature of their business to accomplish mission and vision. In this report, several global strategies have been explored and the applications and practical implications have also been compared with a global firm. The operations of IKEA have been studied to see the outcomes of global strategy in its operations.
This case study is about a multinational company which sells ready to assemble furniture and home accessories. According to the economics records as at 2008 this is the world largest furniture retailer. (Forbes, 2013)
This report describes about the main strategies which IKEA use to approach to different markets with different consumers and with them IKEA has evolved into the largest furniture retailer in the world with approximately 300 stores in 38 countries and revenues topping $21.5 billion in 2009. Its top countries in terms of sales include Germany, 16 percent; United States, 11 percent; France, 10 percent; United Kingdom, 7 percent; and Italy, 7 percent. (Business week, 2005)
According to the final decision IKEA has made a different way of shop for furniture with the time develops and it has reach to the expectations of its customers according to their expectations.
Finally, in the conclusion of the report shows the final view of the researcher about the finding regarding to the IKEA strategies throughout the research and final judgment which make about the given case.
Firm Strategy for Global or Multi-domestic OrganizationsAssignment Studio
Firms are utilizing and adopting several strategies as per nature of their business to accomplish mission and vision. In this report, several global strategies have been explored and the applications and practical implications have also been compared with a global firm. The operations of IKEA have been studied to see the outcomes of global strategy in its operations.
This presentation briefly will elaborate how IKEA has adopting Porter's Five Forces and Value Chain Analysis in order to maintain its competitive edges over its rivals in furniture market all over the globe by providing good quality furniture at a lower price tag. Hence by bringing in innovative design, improved functionality, low cost operating expenditures and offering excellent quality at lower prices, IKEA's has proved to be a success.
Assignment on Case- IKEA: DESIGN AND PRICINGanonymous
SUMMARY / BACKGROUND OF THE CASE
IKEA Swedish retailer
Dominates markets in 32 countries.
Corporate Mantra: “Low price with the meaning”
Good quality at a low price.
30-50% below competitors
Last 4 years – Retail prices reduced by 20%
The project analyses the importance of branding for Ikea and can help us to find out about IKEA's SWOT analysis and the STP process for Ikea. It also gives information on Ikea's Vision and Mission and Ikea's Marketing Mix, Ikea's Pestle Analysis, Ikea's Five Forces Model, Ikea's History and Ikea's Products and Services.
Rubric for Port Improvement Plan (PIP) Outline and PresentationI.docxtoddr4
Rubric for Port Improvement Plan (PIP) Outline and Presentation
Integration of course concepts
25%
Completeness of analysis
30%
Logically supported conclusions, recommendations
25%
Bibliographic support, APA format
10%
Grammar, spelling, and punctuation
10%
TOTAL
100%
116-015 IKEA in Saudi Arabia (A)
IKEA in Saudi Arabia (A) 116-015
KA RTHIK RA MANNA
JÉRÔME LENHARDT
MA RC H OMS Y IKEA in Saudi Arabia (A)
On October 1, 2012, the Swedish newspaper Metro revealed on its front page that Inter IKEA Systems B.V. (hereafter Inter IKEA Systems) – one of Sweden’s most iconic companies and the world’s largest furniture retailer – had erased all images of women from its fall 2012 catalog for Saudi Arabia.1 The Metro article compared pages depicting women models from Inter IKEA System’s Swedish catalog to the equivalent pages in its Saudi catalog from which the women had been removed (see Exhibit 1a for a picture of the Metro front page and Exhibit 1b for further pictures of the differences between the Swedish and Saudi catalogs). The newspaper article immediately sparked additional media attention and criticism directed against the IKEA brand. In Sweden, government officials raised questions about how Inter IKEA Systems was living up to its own values and commitments to human rights and gender equality. Worldwide, news outlets and social media platforms like Twitter were abuzz, with some critics accusing Inter IKEA Systems of betraying the company’s Scandinavian values and yielding instead to pressure from the conservative Islamic state.2 (Saudi law and culture was generally considered very strict towards women, barring them, for instance, from driving and requiring them to have the consent of a male “guardian” to travel abroad or work.3)
Faced with the growing backlash, the company considered its potential responses. It could reissue its catalog with women included, but this approach risked running afoul of Saudi censors who could impose harsh penalties against organizations considered violating local laws.4 Three IKEA stores had been opened since 1983 in Saudi Arabia, through a local franchisee, Ghassan Alsulaiman Furniture Co.5 It was wary of putting this operation in jeopardy. Alternatively, Inter IKEA Systems could do nothing at all, hoping for the crisis to blow over. But the company was known internationally for its commitment to social and economic development and to human rights. It was even a signatory to a United Nations compact to this effect.6 So much of its brand identity was tied into its progressive social image, as marketing journalist Rob Gray explained, “This is the same company that in the 1990s ran one of the first TV commercials in the U.S. to feature a gay couple – and received bomb threats in response. Obliterating women in an act of censorship certainly didn’t look good to many IKEA customers in markets around the world more used to a liberal, inclusive stance from the brand.”7 Moreover, some consumers in its key ho.
Ikea Invades India - Market Research report on entry strategy in IndiaManeesh Garg
Market Research Report on - Entry Strategy of IKEA in India based on case study "IKEA Furniture" by Harvard Cases.
To get a copy of this report, share your views about the presentation with your email id in Comments section... I keep on updating my presentations and documents. To ensure that you don't miss any update or new upload don't forget to press the "FOLLOW" and "LIKE" button. You can also mail me at manigarg21@gmail.com
This presentation briefly will elaborate how IKEA has adopting Porter's Five Forces and Value Chain Analysis in order to maintain its competitive edges over its rivals in furniture market all over the globe by providing good quality furniture at a lower price tag. Hence by bringing in innovative design, improved functionality, low cost operating expenditures and offering excellent quality at lower prices, IKEA's has proved to be a success.
Assignment on Case- IKEA: DESIGN AND PRICINGanonymous
SUMMARY / BACKGROUND OF THE CASE
IKEA Swedish retailer
Dominates markets in 32 countries.
Corporate Mantra: “Low price with the meaning”
Good quality at a low price.
30-50% below competitors
Last 4 years – Retail prices reduced by 20%
The project analyses the importance of branding for Ikea and can help us to find out about IKEA's SWOT analysis and the STP process for Ikea. It also gives information on Ikea's Vision and Mission and Ikea's Marketing Mix, Ikea's Pestle Analysis, Ikea's Five Forces Model, Ikea's History and Ikea's Products and Services.
Rubric for Port Improvement Plan (PIP) Outline and PresentationI.docxtoddr4
Rubric for Port Improvement Plan (PIP) Outline and Presentation
Integration of course concepts
25%
Completeness of analysis
30%
Logically supported conclusions, recommendations
25%
Bibliographic support, APA format
10%
Grammar, spelling, and punctuation
10%
TOTAL
100%
116-015 IKEA in Saudi Arabia (A)
IKEA in Saudi Arabia (A) 116-015
KA RTHIK RA MANNA
JÉRÔME LENHARDT
MA RC H OMS Y IKEA in Saudi Arabia (A)
On October 1, 2012, the Swedish newspaper Metro revealed on its front page that Inter IKEA Systems B.V. (hereafter Inter IKEA Systems) – one of Sweden’s most iconic companies and the world’s largest furniture retailer – had erased all images of women from its fall 2012 catalog for Saudi Arabia.1 The Metro article compared pages depicting women models from Inter IKEA System’s Swedish catalog to the equivalent pages in its Saudi catalog from which the women had been removed (see Exhibit 1a for a picture of the Metro front page and Exhibit 1b for further pictures of the differences between the Swedish and Saudi catalogs). The newspaper article immediately sparked additional media attention and criticism directed against the IKEA brand. In Sweden, government officials raised questions about how Inter IKEA Systems was living up to its own values and commitments to human rights and gender equality. Worldwide, news outlets and social media platforms like Twitter were abuzz, with some critics accusing Inter IKEA Systems of betraying the company’s Scandinavian values and yielding instead to pressure from the conservative Islamic state.2 (Saudi law and culture was generally considered very strict towards women, barring them, for instance, from driving and requiring them to have the consent of a male “guardian” to travel abroad or work.3)
Faced with the growing backlash, the company considered its potential responses. It could reissue its catalog with women included, but this approach risked running afoul of Saudi censors who could impose harsh penalties against organizations considered violating local laws.4 Three IKEA stores had been opened since 1983 in Saudi Arabia, through a local franchisee, Ghassan Alsulaiman Furniture Co.5 It was wary of putting this operation in jeopardy. Alternatively, Inter IKEA Systems could do nothing at all, hoping for the crisis to blow over. But the company was known internationally for its commitment to social and economic development and to human rights. It was even a signatory to a United Nations compact to this effect.6 So much of its brand identity was tied into its progressive social image, as marketing journalist Rob Gray explained, “This is the same company that in the 1990s ran one of the first TV commercials in the U.S. to feature a gay couple – and received bomb threats in response. Obliterating women in an act of censorship certainly didn’t look good to many IKEA customers in markets around the world more used to a liberal, inclusive stance from the brand.”7 Moreover, some consumers in its key ho.
Ikea Invades India - Market Research report on entry strategy in IndiaManeesh Garg
Market Research Report on - Entry Strategy of IKEA in India based on case study "IKEA Furniture" by Harvard Cases.
To get a copy of this report, share your views about the presentation with your email id in Comments section... I keep on updating my presentations and documents. To ensure that you don't miss any update or new upload don't forget to press the "FOLLOW" and "LIKE" button. You can also mail me at manigarg21@gmail.com
Model Attribute Check Company Auto PropertyCeline George
In Odoo, the multi-company feature allows you to manage multiple companies within a single Odoo database instance. Each company can have its own configurations while still sharing common resources such as products, customers, and suppliers.
Operation “Blue Star” is the only event in the history of Independent India where the state went into war with its own people. Even after about 40 years it is not clear if it was culmination of states anger over people of the region, a political game of power or start of dictatorial chapter in the democratic setup.
The people of Punjab felt alienated from main stream due to denial of their just demands during a long democratic struggle since independence. As it happen all over the word, it led to militant struggle with great loss of lives of military, police and civilian personnel. Killing of Indira Gandhi and massacre of innocent Sikhs in Delhi and other India cities was also associated with this movement.
Instructions for Submissions thorugh G- Classroom.pptxJheel Barad
This presentation provides a briefing on how to upload submissions and documents in Google Classroom. It was prepared as part of an orientation for new Sainik School in-service teacher trainees. As a training officer, my goal is to ensure that you are comfortable and proficient with this essential tool for managing assignments and fostering student engagement.
Macroeconomics- Movie Location
This will be used as part of your Personal Professional Portfolio once graded.
Objective:
Prepare a presentation or a paper using research, basic comparative analysis, data organization and application of economic information. You will make an informed assessment of an economic climate outside of the United States to accomplish an entertainment industry objective.
A Strategic Approach: GenAI in EducationPeter Windle
Artificial Intelligence (AI) technologies such as Generative AI, Image Generators and Large Language Models have had a dramatic impact on teaching, learning and assessment over the past 18 months. The most immediate threat AI posed was to Academic Integrity with Higher Education Institutes (HEIs) focusing their efforts on combating the use of GenAI in assessment. Guidelines were developed for staff and students, policies put in place too. Innovative educators have forged paths in the use of Generative AI for teaching, learning and assessments leading to pockets of transformation springing up across HEIs, often with little or no top-down guidance, support or direction.
This Gasta posits a strategic approach to integrating AI into HEIs to prepare staff, students and the curriculum for an evolving world and workplace. We will highlight the advantages of working with these technologies beyond the realm of teaching, learning and assessment by considering prompt engineering skills, industry impact, curriculum changes, and the need for staff upskilling. In contrast, not engaging strategically with Generative AI poses risks, including falling behind peers, missed opportunities and failing to ensure our graduates remain employable. The rapid evolution of AI technologies necessitates a proactive and strategic approach if we are to remain relevant.
Embracing GenAI - A Strategic ImperativePeter Windle
Artificial Intelligence (AI) technologies such as Generative AI, Image Generators and Large Language Models have had a dramatic impact on teaching, learning and assessment over the past 18 months. The most immediate threat AI posed was to Academic Integrity with Higher Education Institutes (HEIs) focusing their efforts on combating the use of GenAI in assessment. Guidelines were developed for staff and students, policies put in place too. Innovative educators have forged paths in the use of Generative AI for teaching, learning and assessments leading to pockets of transformation springing up across HEIs, often with little or no top-down guidance, support or direction.
This Gasta posits a strategic approach to integrating AI into HEIs to prepare staff, students and the curriculum for an evolving world and workplace. We will highlight the advantages of working with these technologies beyond the realm of teaching, learning and assessment by considering prompt engineering skills, industry impact, curriculum changes, and the need for staff upskilling. In contrast, not engaging strategically with Generative AI poses risks, including falling behind peers, missed opportunities and failing to ensure our graduates remain employable. The rapid evolution of AI technologies necessitates a proactive and strategic approach if we are to remain relevant.
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An EFL lesson about the current events in Palestine. It is intended to be for intermediate students who wish to increase their listening skills through a short lesson in power point.
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The Roman Empire A Historical Colossus.pdfkaushalkr1407
The Roman Empire, a vast and enduring power, stands as one of history's most remarkable civilizations, leaving an indelible imprint on the world. It emerged from the Roman Republic, transitioning into an imperial powerhouse under the leadership of Augustus Caesar in 27 BCE. This transformation marked the beginning of an era defined by unprecedented territorial expansion, architectural marvels, and profound cultural influence.
The empire's roots lie in the city of Rome, founded, according to legend, by Romulus in 753 BCE. Over centuries, Rome evolved from a small settlement to a formidable republic, characterized by a complex political system with elected officials and checks on power. However, internal strife, class conflicts, and military ambitions paved the way for the end of the Republic. Julius Caesar’s dictatorship and subsequent assassination in 44 BCE created a power vacuum, leading to a civil war. Octavian, later Augustus, emerged victorious, heralding the Roman Empire’s birth.
Under Augustus, the empire experienced the Pax Romana, a 200-year period of relative peace and stability. Augustus reformed the military, established efficient administrative systems, and initiated grand construction projects. The empire's borders expanded, encompassing territories from Britain to Egypt and from Spain to the Euphrates. Roman legions, renowned for their discipline and engineering prowess, secured and maintained these vast territories, building roads, fortifications, and cities that facilitated control and integration.
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A SITUATIONAL AND STRATEGIC ANALYSIS OF IKEA AND THE FUTURE
1. AUTHOR: ANTHONY AYODELE
COURSE: BUSINESS ORGANISATIONAL POLICY
SUPERVISOR: PETER AKINSOWON
MODULE: PM 204
A SITUATIONAL AND STRATEGIC ANALYSIS OF IKEA AND THE FUTURE
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A SITUATIONAL
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STRATEGIC
ANALYSIS OF
IKEA AND THE
FUTURE
ABSTRACT: This situational and
strategic analysis examines the
present situation of furniture and
fitting market leader IKEA providing
recommendations on how the
company could strategically maintain
its lead on a long-term basis in an ever
changing uncertain future.
AUTHOR: ANTHONY
AYODELE
COURSE: BUSINESS
ORGANISATIONAL POLICY
SUPERVISOR: PETER
AKINSOWON
MODULE: PM 204
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TABLE OF CONTENT
TABLE OF CONTENT ................................................................................................................................3
INTRODUCTION.......................................................................................................................................5
1 THE COMPANY ................................................................................................................................7
SITUATIONAL ANALYSIS ..........................................................................................................................8
1.1 MODULES/TOOLS USED TO ANALYSE IKEA.............................................................................8
1.1.1 SWOT ANALYSIS ..............................................................................................................8
1.1.2 PESTEL ANALYSIS...........................................................................................................11
1.1.3 PORTERS FIVE FORCES ..................................................................................................15
1.2 EXTERNAL FORCES AFFECTING IKEA AND PORTERS FIVE FORCES........................................15
MATURITY STAGE AND PRODUCT LIFE CYCLE OF IKEA.....................................................................16
PUNCTUATED EQUILIBRUM OF IKEA ................................................................................................17
RECOMMENDATIONS .......................................................................................................................19
2 APPENDIX......................................................................................................................................22
2.1 IKEA PRODUCT LIFE CYCLE/FUTURE CHART..........................................................................22
2.2 SWOT ANALYSIS CHART ........................................................................................................24
2.3 PESTEL ANALYSIS CHART.......................................................................................................25
2.4 MICHAEL PORTER’“ FIVE FORCE“ CHART..............................................................................26
2.5 PERSONAL EXPEREIENCE OF IKEA CUSTOMERS....................................................................27
3 Bibliography ..................................................................................................................................28
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Table of Figures
(Cover from top left clockwise)
Figure a IKEA showroom SOURCE: (Wikimedia, Wikimedia, N/A)……………...................................Cover
Figure b IKEA Store front SOURCE: (IKEA, IKEA, N/A) …………..……..…………………………………………….Cover
Figure c IKEA Model SOURCE: (IKEA, IKEA, 2012)……………………………………………………………………..Cover
Figure d IKEA Bedroom furniture SOURCE: (IKEA, IKEA, 2009)…………..……………………………………..Cover
Figure e IKEA Flags in front of store SOURCE: (Times, 2010)………..……………….………………………….Cover
Figure f IKEA plain furniture SOURCE: (Brandman, 2013) ……………………………….……………………….Cover
Figure g IKEA Home furnishing pix SOURCE: (Wikimedia, Wikimedia, 2007)……………………………..Cover
Figure 1 Product Life Cycle Chart.............................................................................................................................................22
Figure 2: SWOT Analysis Chart.................................................................................................................................................24
Figure 3 PESTEL Analysis Chart ................................................................................................................................................25
Figure 4: Michael Porter's Five Forces Chart............................................................................................................................26
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INTRODUCTION
IKEA is a t ue sto of a i di idual’s d ea o e t ue. According to former
Chief Executive Officer (CEO) of the company, Anders Dahvig, the o pa ’s
objective has been to provide good design and quality furniture for those with
limited financial needs (Dahlvig, 2013)
This, Dahvig further states, has been achieved
through the company, seeking to reduce prices
of their products and increase sales volumes by
maintaining a strong cost control hence
delivering the required bottom line results
(Dahlvig, 2013)
As of 2009 the UK had 18 IKEA stores, starting
with the one opened in 1987 in Warrington. A
store was also opened for the first time in Dublin
in 2009. (Chopra, 2009)
The company has come to emerge as the
industry leader in the provision of affordable
fu itu e fo all st ata’s of the so iet suitable
QUOTE
The company has come
to emerge as the
industry leader in the
provision of affordable
furniture for all strata’s
of the society suitable
for both office usages
and homes. However,
over the years
competitorors have
begun to master the
Ikea Edge,
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for both office and home usage. However, over the years competitors have
begun to aste the Ikea Edge, as companies such as Tesco, Walmart, DFS,
Argos and Carrefour (now selling under Ocado, Gateway or ASDA, which
absorbed or took over aspect of the company when it discontinued in operations
the UK Market.) (Townsend, 2009) among others have adapted a low-price
strategy and are venturing fast into the furnishing and furniture terrain.
(Andyboss, 2011)
It is towards ensuring that the company does not lose this position in the nearby
or distant future that this report has been put together o the o pa ’s
request. (IKEA, About Ikea, N/A)
In terms of its product life Cycle IKEA could be said to be at its maturity stage –
considering the success the initial modest company has experienced over the
past 87 years since when founded. Furthermore this report seeks to ensure that
IKEA does not go under as a result of the external change in the business
environment it operates in.
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1 THE COMPANY
The Swedish originated company has since come to emerge as force to
reckon within the area of affordable furniture.
IKEA originated from Sweden and was founded in 1926 by Invar Kamprad . It
has since emerged as force to reckon with in the area of affordable furniture. At
87, Kamprad presently is reportedly touring IKEA stores worldwide which as at
2011 stood at 320 in 26 countries with over 140,000 employees by the year 2012
(Torekull, 2011)
The company has adapted a design style for its products which is in line with the
tastes of its home country Sweden– functional and simple, not fashionable or
centred around attraction. These are values that IKEA has exported beyond its
shores, providing an insight into the realistic taste of the average hardworking
Swedish National who believe in being frugal by making best use of resources
available. (SA, 2012)
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SITUATIONAL ANALYSIS
A Situational Analysis has been drawn up to assess the present state of IKEA.
Modules/Tools used for such include A SWOT Analysis, PESTEL and Michael
Porters Five Forces.
1.1 MODULES/TOOLS USED TO ANALYSE IKEA
1.1.1 SWOT ANALYSIS
Below is a SWOT Analysis of IKEA:
1.1.1.1 Strengths
IKEA’s st e gth could be found in its provision of highly functional, quality
furniture at affordable prices. In addition the company has established a
goodwill and market brand name that is virtually second to none. T
he company has a very efficient Value Chain system which is constantly
reviewed toward ensuring clients get highly competitive services for majority of
the its products, providing IKEA with a Competitive Advantage in the industry.
(Jafry, 2012)
Though operating in many cases, under a franchise arrangement in some
countries, the uniformity in terms of product design and quality across the world
has e ha ed the o pa ’s st e gth a d it’s depe da ilit a o g o su e s.
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The operational strategy has also been similar, enabling the consumers to know
what to expect. (Jafry, 2012)
In its products IKEA provides portable, packed-flat furniture that is set to be
assembled by buyers. (100 T. T., N/A)
1.1.1.2 Weaknesses
IKEA’s eak ess ould e see its limited or inadequate support policy
as well as its limited visibility through promotions and Marketing. Stores are
few and sparsely located (only three in UK) while each one, despite its massive
stores and numerous floors, has few staff whose involvement towards
enhancing customers buying experience is limited. The technical nature of
packaged furniture which in most cases with IKEA requires assemblage -
through the observation of detailed instructions - could put a good number of
customers off. Many, employ and pay a third party to assist with assembling
purchased products or would rather visit a more customer-supportive/ friendly
furniture company. The absence of detailed written instructions or video
directions to accompany these products is also a weak ess o the o pa ’s
part.
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1.1.1.3 Opportunities
IKEA may identify opportunities in providing greener products for its clientele
and further educating the public on waste reduction in the area of furniture
usage. (100 T. T., 2013)
The company can take it DIY approach of furniture assemblage to another level
by recognising the various forms of learning identified in different people being
Video, Audio and Kinaesthetic (VAK) and providing instructions on such basis
(more on this later.)
Furthermore, the company needs to work on establishing a good
communication link with its consumers and workers all being the stakeholders
of the o pa . The uildi g of t ust i this ega d is u ial to the o pa ’s
continuous development. (100 T. T., 2013)
1.1.1.4Threats
Threats to IKEA include the downturn economic recession experienced
throughout the United Kingdom and Europe. This has affected the consumers
purchasing power and in turn, general sales in the industry. As stated earlier
more competitors are delving into the home and office furniture industry,
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equally providing budget cost downturn pricing, thus penetrating considerably
i to IKEA’s a ket sha e. (100 T. T., 2013)
Another threat of the company borders on its size and scale. A super – scale sice
that experts believe waters down innovation (Hammond, 2013) IKEA is steadily
becoming a household name throughout the world. The challenge to maintain
standard and quality while providing low cost products increases with every
territory ventured into. (Journal, 2011)
1.1.2 PESTEL ANALYSIS
1.1.2.1 Political Factors
The Political climate of the host country of any company has a direct impact on
its performance. The influx of foreigners from European countries on one hand
and the clamp down on illegal immigrants by the conservative government in
the United Kingdom on the other have brought about a negative impact on the
provision of labour for the industry. (100 T. T., 2013)
Corporate and consumer tax along with business legislation which differs from
country to country are also other influencing factors. In all, these have borne
an influence on the structure of IKEA. They have also, in one way or the other,
impacted competition by affecting the enabling environment.
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1.1.2.2 Economic Factors
Weak economies across Europe has weakened purchasing power, in turn,
affecting o su e ’s disposable income. The increasing rate of employment
currency rates and fluctuating oil prices have equally negatively impacted the
economy. Being the environment in which IKEA operates, these factors have had
an influence. The cost of labour which has a wide disparity in places such as
Poland and China differs greatly to what is obtainable in London or the United
States. These are some of the economic factors that affect IKEA (IKEA, About
Ikea, N/A)
1.1.2.3 Social Factors
Inter-country migration, for example from the countryside to the city, in search
of jobs due to the close down of industries in the former could drive the
demand for functional low cost furniture in the city, he e ost of IKEA’s
business is found. (Chopra, 2009)
The absence of good infrastructure in host countries where IKEA is found could
also hi de the o pa ’s g o th. The e te t of oad et o ks, the presence
of National highways and good transportation network structure are factors
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that have a direct impact on IKEA successfully doing business in any host
country. (Pattairman, 2013)
1.1.2.4 Technological Factors
The utilization of the internet has promoted the easiness and freedom with
which people make their decisions. Since this can be accomplished by using
advanced and modified technologies. (Jafry, 2012)
The demographics of the society based on age, income, family size, etc are also
fa to s that i flue e a o pa ’s pe fo a e su h as IKEA, as the
preponderance of old-aged pensioners in a society would result to a lower
demand than that of a society made up of teenagers and middle class yuppies.
IKEA would do well to understudy each environment it finds itself. Products
should be made available based on effective demand. (Jafry, 2012)
The introduction of RFID Technology in supermarkets and stores has made the
shopping experience easier while it has enhanced shelving and product
identification for companies. More frequently, companies are taking advantage
of this technology, coming up with variations of its usage towards providing the
customer with a better shopping experience. An example is Argos which has
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introduced the provision of digital stores that enable customers to walk in and
pick up goods ordered online with little or no Customer Service interface.
Environmental
Increasingly, there has been a demand for organisations to meet up with
environmental regulations such as the reduction of carbon emissions and the
introduction of recycling/greening friendly procedures within their factories.
IKEA would do well to comply with such, especially as it has to do with the local
sourcing of raw materials and the manufacturing of their products/the manner
in which they dispose dangerous waste products. The introduction of
environmental friendly packaging material is also desirable. (Jafry, 2012)
1.1.2.5 LEGAL FACTORS
Legislations in various countries affect companies operating within them.
Protective legislations and standards may vary from country to country. The
1979 UK Sale of Goods Acts is a clear example of a legal tool that impacts on
companies such as IKEA operating in UK.
The implications of such are vast and vary including resultant legal battles over
consumer rights, fines, damages, and court injunctions initiated by third
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parties. Employee protection acts are also part of legislative issues that could
affect operating companies.
1.1.3 PORTERS FIVE FORCES
1.2 EXTERNAL FORCES AFFECTING IKEA AND PORTERS FIVE FORCES
1.2.1.1 Competition
The competition affecting IKEA has ee a al sed a o e. IKEA’s U i ue “elli g
Point (USP) has been in the area of its ability to provide down-turn, low price
strategies to marketing. Many more high street retailer outfits however have
adapted a si ila app oa h to a keti g fu itu e a d fitti gs a d he e IKEA’s
market share is seriously being threatened.
1.2.1.2 Threat of Substitute Products
Many have argued that there is no substitute to furniture per se. Rather, the
ability to provide up-to-date modern furniture in comparison with competition
is the major threat manufacturing companies face in the industry. In the case
of IKEA, taste and design differences is the nearest to any substitute possibility
one may come by. (Andrade, 2012)
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1.2.1.3 Degree of Competitive Rivalry
The Economic recession experienced in developed countries has seen the need
to adapt low cost/pricing strategies in Furniture and Fitting companies
inevitable. In the place of DIY services provided by IKEA some have provided high
discount long-term credit goods such as DFS. Others like Argos have adopted
flat-pack packaging designs similar to IKEA and, with their venturing into
furniture and fittings on a larger scale, have reduced the edge IKEA has over
competition.
1.2.1.4 Threat of new entrants to the Market
There is a low threat posed by new entreats into the furniture and fitting
market considering the high cost involved and economies of scale enjoyed by
exiting companies. The market is believed to be saturated and the cost of
highly skilled labour required in the industry is high. (Jafry, 2012)
MATURITY STAGE AND PRODUCT LIFE CYCLE OF IKEA
As stated earlier, IKEA could be said to be in the matured stage of its Product life
Cycle. It has entered into a stage where it has experienced rapid growth and
stabilized in the market. IKEA has also differentiated its products from those
offered by competition. The company has made its products stand out among
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the rest, being able to carve a niche for itself in the Furniture and Fitting industry
(Marketing, 2013)
However it is at this stage that the company needs to be careful to ensure that
in the face of change it does not enter into a declined state but rather that of
innovation that leads to further growth. This is turn would lead to high brand
loyalty as seen in the diagram below:
Figure 1: BRAND AND THE PRODUCT LIFE CYCLE (Innovation, 2013)
PUNCTUATED EQUILIBRUM OF IKEA
Another tool that could be used to analyse what the future of IKEA should look
like having applied Strategic Management principles to fulfil its objectives is the
punctuated Equilibrium.
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This theory suggests that a group or company continues in a stabilised state until
disrupted by a factor. In the case of a company it could be an external factor
within the industry that brings about change. When this happens (which is
usually preceded by a period of uncertainty or instability or the flux stage) the
company enters the transformational stage where it either experiences a
strategic fit: being its ability to match resources with its opportunities; Strategic
wear out: when a particular strategy applied is no longer useful towards fulfilling
the o pa ’s o je ti e o , Strategic Drift: when a successful company
responds too slow to changes that impact the company.
To ensure IKEA experiences a Strategic Fit at the transformational stage, is the
purpose of the recommendations of this report.
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Figure 2 Punctuated Equilibrium Graph (Fredrick, 2013)
RECOMMENDATIONS
As p e iousl stated IKEA’s ai st e gth has een to use a downward trend,
low cost strategy pricing to maintain the market leader position. It has however
converted its competition by price compression approach (which is supposed to
be only on short term basis) into a long- term policy. (Akinsowon, 2013)
A this point the company needs to go back to the drawing board and come up
with another strategy to maintain its position. It also needs to among others
things:
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Improver in the area of Customer Service.
Set up outlets (may be on a third party basis) such as showrooms where
customers can save cost in terms of transportation but enjoy a more
personal service and detailed instructions in the area of assemblage.
Provide in-house assemblage instructions for their products (some
customers were seen being asked to dissemble a product in the return
and repurchase section with no assistance from staff) for those who want
clarification while on site.
Employ and train more customer interfacing friendly staff, realising that
Customer service is not negotiable or an area that can be over-
emphasised.
Draw long-term strategic plans, being innovative and creative in their
approach to the future to avoid decline.
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2 APPENDIX
2.1 IKEA PRODUCT LIFE CYCLE/FUTURE CHART
Figure 3 Product Life Cycle Chart Material source: (Timetoast, 2013)
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2.2 SWOT ANALYSIS CHART
Figure 4: SWOT Analysis Chart
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2.3 PESTEL ANALYSIS CHART
Figure 5 PESTEL Analysis Chart
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2.4 MICHAEL PORTER’S FIVE FORCES CHART
Figure 6: Michael Porter's Five Forces Chart
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2.5 PERSONAL EXPEREIENCE OF IKEA CUSTOMERS
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