This document provides a summary of IKEA, the world's largest furniture retailer. It discusses IKEA's history, strengths such as low prices and flat packaging, weaknesses like limited product designs. It also analyzes opportunities for growth in Asia and online sales. Threats include economic concerns reducing disposable income. A PESTEL analysis examines the business environment. The document reviews IKEA's market position, competitors, and maintains the largest market share for furniture retailers.

1. Live your life. Love your home.Presented by: Fenella AndradeMalleshGoudarNipun Jain Sarah ChoudharyMasters in European Studies and Management (MESM) 2010-2012Manipal Centre for European StudiesManipal University, Karnataka, India

3. IKEA HistoryIn 1943, IKEA was founded by Ingvar KampradBased in SwedenWorld's largest furniture retailerWorld’s leading home furnishings retailerIKEA numbers 1,04,000 employees in 267 stores in 45 countries

4. SWOT AnalysisonIKEA Home Furnishings

5. STRENGTHS Brand Image

6. IKEA ranked 41st among the best global brands around the world in 2006 with a brand value of $8,763

7. strong internationally known brand attracting key demographic customer groups

8. strong brands enhance customer loyalty and lead to repeat purchasesCost Efficient

9. Low price

10. no compromise in quality

11. Unique business model

12. own industrial group, Swedwood, which produces wood-based furniture and wooden components

13. its operations cover every step of production, from forestry, saw milling and board manufacture to furniture

14. efficient productions which enable it to maximize productivity and minimize waste-generation

15. own design group which can makes sure that their products matches the trend of the industryGood relationship with suppliers

16. Maintained long-term partnerships with its suppliers

17. Ensures that the company has access to high-quality materials at reasonable prices

18. Marketing expertise

19. Market positioning statement is “Your partner in better living. We do our part, you do yours. Together we save money.”

20. Market on its strengths – based on offering a wide range of well designed, functional products at low prices

21. Catalogue- 175 million copies sold in 55 editions and 27 languages (2007)

22. Other promotions include their seasonal sales, internet deals and television advertisementsFlat packing that helps in management

23. Flat packaging, which reduces shipping costs, minimizes transport damage, increases store inventory capacity, and makes it easier for customers to take the furniture home themselves, rather than needing delivery.

24. But the original reason for it was competitive pressure from IKEA's competitors to their suppliers, who actually boycotted IKEA, forcing IKEA to do it themselves.

25. Easy to assemble

26. One stop shopping

27. Friendly atmosphere and store layout

28. One stop shopping

29. Customer ServiceRestaurant in storeIKEA exit bistroSwede ShopIKEA RestaurantChild CareSupervised PlayroomBaby Care RoomFood Warming FacilitiesChildren’s MealsDesign AdviceOffice PlanningKitchen PlanningHome Furnishing AdviceStore AtmosphereEasily Located ProductsBrowse through showrooms and try out productsDelivery Services available or take home products immediately

30. WEAKNESS IKEA has to acknowledge its weaknesses in order to improve and manage them. This can play a key role in helping it to set objectives and develop new strategiesNot enough distributionchannels. For eg: There are only three retail shops in Hong Kong

31. Problem of product recall due to faulty base. For eg: IKEA had recalled Parodi and Apelsin glass cases

32. IKEA is a global company, so product standards are difficult to maintain.Some countries where IKEA products are made do not implement the legislation to control working conditions

33. Swedish designs not appealing to American customers

34. Limited Furniture Designs - IKEA had limited furniture designs which could obviously not cater to a wide range of customer needs and preferencesOPPORTUNITIESIKEA are moving from International to global status through the development of Asia and Eastern European models

35. Targets all levels of the market, upper, middle and lower classes

36. Sourcing from China is one opportunity. Sourcing from low cost countries like China would reduce its costs and enable IKEA to concentrate on increasing its market share

37. Bright prospect of online salesTHREATS If a company is aware of possible external threats, it can plan to counteract them. By generating new ideas, IKEA can use a particular strength to defend against threats in the market.With economic concerns over rising living costs and depleting disposable income there is an overall threat to the performance of the business in UK and American markets specifically

38. The regulatory environments across the globe vary and can affect how IKEA does business and its product costs, especially the use of natural resourcesPORTER’s 5 FORCE ANALYSISThreat of Buyers growing bargaining power There is a little power because of the existing low-price optionsIKEA ensure that their customers in all aspects will be satisfied for quality service they provideFocused their marketing approach on demands and needs of the buyerIKEA uses their corporate responsibility as a good public image to their customersIKEA Family -card as a membership

39. Threat of Suppliers growing bargaining power IKEA has its thousands of suppliers that set standards in delivering the materialsBecause of the low-pricing, IKEA’s profit margin also affects the prices in raw materials than by prices in labourIKEA has a wide network of 1300 suppliers. They carefully select the manufacturer of its products. The company has own production factories and designers which makes it less dependent on othersBargaining power of supplier could be threat for the profit of the company

40. Threat of Substitute ProductsThere is no specific product that can be a substitute for the furniture but IKEA at least, have to keep up with the latest trends, to avoid becoming out of styleProblems faced due to distribution channels

41. Threat of Intense Segment Rivalry The IKEA’s furniture competitors’ offers different styles and functionalityConrin targets a new low cost in terms of furniture line; Crate & Barrel offers a furniture in a box which is subject in higher pricesEthan Allen aimed at a more upscale marketWal-Mart is equipped in a big box furniture that is categorized under the general store must-have-items, but don’t have much of a styleIKEA is the most successful in delivering the complete package for the customers that reflects on weak rivalriesThere will always be substitutes for furniture’s but IKEA competes with price and there isn't competitors in same price range

42. Threat of New Entrants IKEA stores do not reach many small towns and this is an opportunity for the new competitors to move into small and midsize cities with smaller stores and less selection. But not easier in city because new entrants have to establish a vast supply chain and create a unique brand nameThe furniture market is already highly competitive - the risk of new entrants is not extremely high - huge capital needed to start the business

43. 5 c AnalysisCompanyCollaboratorsCustomersCompetitorsClimate/Context

44. COMPANYProduct LineKitchen wareDinning Living roomBedroomHallwayBathroom & LaundrySmall storageCooking

45. Market ImageAwards won by the companyLeo Burnett Hong Kong win the Grand Kam Fan for IKEA at the Hong Kong 4As AwardsIKEA (Campaign of the Year)IKEA (Corporate Branding Campaign of the YearIKEA (Best Use of Online Media)IKEA Honoured With Eurobest 2010 Advertiser Of The Year AwardAward by Queensland Government’s Environmental Protection Agency for IKEA’s Environmental initiatives (2007)IKEA was named one of the 100 Best Companies for Working Mothers in 2004 and 2005 by Working Mothers magazine ranked 96 in Fortune's 100 Best Companies to Work For in 2006 and in October 2008 IKEA Canada LP was named one of "Canada's Top 100 Employers" by Mediacorp Canada Inc

46. CultureDiversity and creativityFamily like QualityCost ConsciousOpennessEqualityCompetitivenessEco FriendlySocial Initiative (main partners to IKEA Social Initiative are UNICEF and Save the Children)

47. Goals of the CompanyImplementing strategies in the organizationCustomer transportation and carbon footprintWorking with suppliers on complianceCommunicating sustainability accomplishmentsIntegrating sustainability into core businessForestation and use of wood

48. COLLABORATORSDistributorsThey have 28 distribution centres in 16 countries that supply to IKEA stores.They have over 300000 distributors all around the world

49. SuppliersThey possess the bargaining powerIKEA prefers procuring their materials from low cost countries like China to reduce their overall cost

50. AlliancesRainforest AllianceThe IKEA Group supports the Rainforest Alliance to promote Forest Stewardship Council (FSC) forest management certification in China by educating foresters and stakeholders on the principles of FSC certification. The project provides key experts with the training, tools and materials to conduct Rainforest Alliance workshops in order to increase the level of sustainable forestry awareness in China.

51. CUSTOMERSMarket sizeFirst stores were opened in Norway and DenmarkGermany - IKEA's biggest market ( 45 stores)United States (37 stores)France ( 28 stores)Presently IKEA has 316 stores in 45 countriesTop 5 sales countries Germany 19 %USA 11 %United Kingdom 11 %France 9 %Sweden 8 %

52. Benefits and CostGain from good quality at low costStylish and varied designsFriendly atmosphereOne stop shopping

53. COMPETITORSProductsAll home solutionsKitchens, bathrooms, sofas, chairs, beds and textiles, rugs, floors, lamps, plants, and everything in betweenDisplayed to show design possibilities with IKEA productsAssembled by the customer

54. Intratype CompetitionCrate and BarrelPier 1Pottery BarnFurniture retailers utilizing similar store layouts M.JacobsAshley’s Home FurnishingsEthan AllenIntertype CompetitionHome Improvement StoresHome DepotJerry’sDepartment Store’sMeier & FrankMacy’s Discount RetailersWal-MartFred Meyers

55. Market shareDespite the challenging economic situation in the world, fiscal year 2009 was a good year for the IKEA Group. The Group opened 15 new IKEA stores and entered its 25th market, with the new IKEA store in Dublin, Ireland. Sales increased to 21.5 billion Euro, which is an increase of 1.4 per cent compared to last year. The IKEA Group operates 267 IKEA stores in 25 countries. In addition there are 34 IKEA stores, that are owned and run by franchisees outside the IKEA Group, in 16 countries/territories“It has been a challenging year in which we have had to adapt to changed market conditions,” says Kerri Molinaro, President, IKEA Canada. “We know that many of our customers have less money to spend and our low price concept is therefore more relevant than ever. Our customers have recognized that in tough times IKEA has the better home furnishing offer.”

56. Presented By :Fenella Andrade MalleshGowdarNipun Jain Sarah ChoudharyLive your life, love your home.