IKEA CASE STUDY

Introduction Of IKEA

IKEA is a conglomerate which designs as well as sells ready-to-assemble furniture, kitchen appliances as well as home accessories among the other goods as well as home services. The company was founded in Sweden in the year 1943 by 17 year old Ingvar Kamprad. IKEA has been the largest furniture retailer of the world since 2008. The brand utilised by the group is an acronym which includes the initial of the founder as well as those of Elmtaryd, the farm of the family where he was born as well as the village nearby, Agunnaryd. The group is very popular for its modernist designs for different kind of appliances as well as furniture. And its work of interior design is often associated with eco-friendly simplicity. Along with it, the firm is known for its focus on the control of cost, details of operation as well as continuous development of product which has permitted IKEA to reduce its prices yearly by an average of two to three percent. The website of IKEA consists of around 12,000 products and there are approximately 2.1 billion visitors to the website. The group is responsible for around 1% of the largest users of wood in the sector of retailing. IKEA, which is retailer of home furnishings and the world’s largest seller of furniture in the early 21^st century, operates in more than 300 stores across the globe. The company specialises in good of low price, it is sold whenever possible in compact flat pack form for in-home assembly by the customers case study. The company became international retailer when the first store in Norway opened in 1963. The company expanded beyond the Nordic nations in the year 1973 when there was an establishment of store in Switzerland. A case study is a process or record of any research that has been conducted before. This is a part of almost every curriculum and has to be completed in a set pattern. Hence, often students look for case study assignment help. It is completely normal. There can be several reasons behind it.

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SWOT analysis of IKEA

Strengths:

• One of the biggest strengths of IKEA is its clear vision that is to add value to its customers irrespective of the conditions of market. This has translated into a well defined as well as articulates strategy of business and a retailing approach that is pioneering in its simplicity as well as deadly in its targeting of competitors as well as effective in its positioning.
• Another main strength of the company is its clear concept that translates into a range of products which can be gathered by the customers themselves resulting to a humungous cost reductions that are then passed on to the customers. With its main focus on the cost leadership, IKEA has emerged as the world’s leading furniture retailer.
• The strength of the company is measured by themselves with the use of metrics that is provided by the key performance which consist of the increased use of renewable materials, smart use of the raw materials, establishing as well as maintaining long term relationships with suppliers as well as leveraging the synergies as well as efficiencies from the economies of scale.

Weaknesses:

• Given the fact that IKEA operates in various nations across the world, it is a high scale as well as a large size business meaning that it is not easy to control standards across locations. Though IKEA try their best to implement similar quality across its range of product and throughout its locations, replicable as well as scalable quality control is a main weakness.
• With kits obsessive focus on cost leadership, quality at times goes for a toss especially in the current context where the costs of the inputs as well as raw materials has gone up and that has impacted the company’s profitability
• There are some concerns of the environment with the operation of IKEA and the company faces certain challenges in communicating as well as articulating the environmental policies to its customers, shareholders as well as other stakeholders.

Opportunities:

• With the green model of business, there is a huge opportunity for the company which is waiting with respect to attracting the customers who like buying such products the rise of the ethical customers or the procedure of buying known as ethnic chic which means that customers could ideally like to purchase products which are environmentally conscious is an opportunity waiting to be tapped for IKEA.
• The biggest opportunity that IKEA has is the cost leadership of the company. This means a single minded focus on cost at the expense of all the things. While this has raised certain about quality, the customers do not mind as they get their worth of money and the addition of value to the customers is another great opportunity.
• Another big opportunity for the company is its expansion in the emerging markets and the developing world where the company has untapped base of customers which can be leveraged for effective probability. You just have to use the plagiarism checkertool from Tophomeworkhelper.com.

Threats:

• The low cost model business model of IKEA has been imitated as well as copied by its rivals. This means that the there is a need for the company to innovate its products constantly if it had to stay ahead of competition.
• With the advent of the internet as well as online shopping, DIY as a main driver of strategic success is no longer the sole USP of the company.

PESTEL Analysis

Political factors: IKEA operates in more than 40 nations. The political decision as well as policies of every nation is very important for the company. If the government is friendly to the business then it becomes very easy for the company to initiate its operation without any complications. Currently the company has opened its store in India as the Indian Government is promoting the campaign of make in India where it wants the multinational companies to manufacture in India for Indians as well as the world. IKEA could benefit a lot through this campaign. Impact of the political controversies affects the brand.

Economic factors: The GDP of the country, per capita income, inflation as well as purchasing power has a huge impact on the operations of IKEA. It is also prone to the slowdown of the economy. The Brexit has impacted the business of IKEA. After Brexit, it will not be easy for IKEA for recruiting workers from Britain. The good part is coming from the developing countries that IKEA is expanding its business rapidly as well as the company started to see huge sales. Currency impact because of BREXIT can lead to an increase in price.

Social factors:

 Social as well as cultural factors have a deep impact in the operation of business.  Different nation have different cultures. What is good in one nation could be a sin in another nation. So it is very crucial for the company to look after the values as well as culture hold by people of the nation in which it is operating. It is also important to stand up for the things that are right as the company gets support from various nations. There has to be initiatives with the local organizations for training as well as creating jobs for the refugees. There is a paradigm shift in attitudes of ultra-mobile youth.

Technological Factors:

The company is updating itself rapidly for coping up to the changing environment of the business as well as fast changing technologies. IKEA is investigating in deep on its research and development as well as bringing in more and more technologies for keeping their customers satisfied. IKEA is also working on a plan to use autonomous transport as an extension of homes, offices as well as local institutions. The company has made investment in augmented reality as well as virtual reality set for the transformation f sales. IKEA uses data analytics for shaping the journey of the customers as well as experience in retail.

Environmental factors:

With an increasing awareness of the people of the change in climate, it became a big responsibility of the company to offer products as well as services that are sustainable in one way or other. IKEA is making sure that it will become as sustainable as possible. 5The Company has realised a 2030 sustainability strategy that focused on using only renewable as well as recycled materials. It is a very big challenge for a company that has more than 400 stores in approximately 40 nations, but IKEA is determined to achieve the target by 2030. The company is making huge investment in solar as well as wind panels and sourcing wood and cotton from sources that are sustainable. The company focuses on sustainability as well as social responsibility and it has committed investments in renewable energy.

Legal factors:

Since IKEA is operating in many countries, it is important that the company take care of the laws pertaining to the respective nation. Any violation of the law can create a lot of trouble for the company. It is very crucial for IKEA to source 30% of its inventory from the local sources. There is criticism over tax evasion in many nations. There is a presence of entry barrier as well as regulations in certain new markets like India.  If you are on a quest of finding a trustworthy assignment help service, then you have landed at the right place.