Negative publicity decreases brand reputation and customer loyalty. For instance, several regional and local companies have caught on to the DIY bandwagon and are also focusing on costs which means that to stay nimble and agile, IKEA has to come up with newer strategies.
Brand reputation and market presence. Designers constantly introduce new design products that look stylish in the eyes of customers.
The company also uses IWAY approach to closely integrate suppliers with its supply chain. This act will give out a poor perception to the customer.
There are great opportunities for IKEA to expand into Brazil, Mexico, Indonesia and Malaysia to increase its presence in these markets to sustain future growth. IKEA is unable to find compromise between continuous cost reductions while maintaining the same quality of products.
There is an opportunities to gain more revenue in online retail sales. Low prices are the cornerstone of IKEA business idea and the the company always try to do things as efficient and cost-effective as possible. Another key strength of the company is its clear concept which translates into an array of products that can be assembled by the customers themselves leading to humungous cost reductions which are then passed on to the customers.
The company understands the purchasing factors that influence customers to buy and implements the best practices to induce that decision. Weaknesses — Not enough distribution channels. The strong brands enhance customer loyalty and lead to repeat purchases.
Lose of the comparably advantage of low price will be one of the unexpected result. IKEA measures its strengths using the metrics provided by the KPIs or the Key Performance Indicators that include increased use of renewable materials, smarter use of raw materials, establishing and maintaining long-term relationships with suppliers and leveraging the efficiencies and the synergies from the economies of scale.
Best Global Brands in Conclusion IKEA is a well-known global trend and through its innovative business model and its focus on products, processes, and systems, it has managed to stay ahead of the competition in the furniture retailing business. IKEA offers low prices and a huge range of products.
The industrial group of IKEA is called Swedwood, its operations cover ever step of production, from forestry, saw milling and board manufacture to furniture.
Constantly using innovations to drive costs down. Sometimes IKEA recall the product due to faulty base. The company is already successfully managing its food outlets, so this expansion opportunity would be well aligned with the current operations.
The company has been criticized many times for issues like poor treatment of employees, questionable advertising practices or lobbying government authorities.
All the products are designed so it would be easy to transport and assemble. The point to be noted here is that it is sometimes difficult to maintain quality in the context of increasing costs and the need to replicate standards across its locations worldwide.
IKEA is already drawing up plans to enter markets like China and India with a clear strategy of cost leadership, which it hopes, would yield benefits to the company. As there are only three retail shops in Hong Kong, it is inconvenience to the customers. Though the company tries its best to implement uniform quality across its product range and throughout its locations, replicable and scalable control of quality is a key weakness.
In addition to its furniture products, the company operates restaurants, houses and flats. All the efforts of closely integrating supply chain results in lower costs and a competitive advantage.
Weaknesses Given the fact that IKEA operates in multiple countries around the world, it is a high scale and a large size business meaning that it is difficult to control standards across locations.
Without such extensive customer knowledge and best practices to benefit from that knowledge, IKEA would be unable to outcompete its current competitors. One of the key competitive advantages IKEA has is its extensive knowledge about the customers.
Worldwide market presence and strong brand reputation ensures that customers will often choose IKEA over its competitors. The business operates stores in 38 countries and is present in the major world markets.
With its obsessive focus on cost leadership, quality sometimes goes for a toss especially in the present context where the costs of many inputs and raw materials has gone up and which has impacted the profitability of the company.
To do this would require fresh thinking and a new approach to its strategy that would combine low cost leadership with additional drivers of success like scalability and focus on quality.
As every production step is under the IKEA control, IKEA can have efficient productions which enable it to maximize productivity and minimize waste-generation. Finally, the company can enter the emerging markets where its products and its business model are likely to be met with success and the untapped customer base can be leveraged.
The company can diversify into other products and product lines as it can replicate its business model in other realms as well. Sourcing from low cost countries like China would reduce its costs and enable IKEA to concentrate on increasing its market share through competitively priced product offerings.
IKEA has an opportunity to expand its grocery business by introducing more grocery stores in its current retail places. As the global demand for steel is high due to major construction projects in China such as the Beijing Olympics and Shanghai World Exposition, these will lead to higher steel prices.
IKEA sources its materials close to suppliers to reduce transporting costs.A SWOT analysis (alternatively SWOT matrix) is a structured planning method used to evaluate the strengths, weaknesses, opportunities and threats involved in a project or in a business venture.
A SWOT analysis can be carried out for a. 78 SWOT analysis IKEA's goals of sustainability and environmental design are central to its business strategy. It has launched a new sustainability plan. February 16, Print.
This is IKEA International Group SWOT analysis in For more information on how to do a SWOT analysis please refer to our article.
Final factor of SWOT analysis is threat. Threat represents the external factors that can threaten the success of project.
Threat is the negative public image towards business, week vendor relationship, inadequate resources and. SWOT analysis of IKEA(HK) Strength-IKEA has the own industrial group, which produces wood-based furniture and wooden components.
The industrial group of IKEA is called Swedwood, its operations cover ever step of production, from forestry, saw milling and board manufacture to furniture. This article performs a SWOT Analysis of IKEA by focusing on the key drivers of success for the company.
The key themes in this article are that IKEA’s business model of cost leadership has held it in good stead so far and to continue, the company needs to innovate and find newer strategic imperatives for itself. Further, the article also .Download