Constantly using innovations to drive costs down. 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 is committed to long lasting relationships with its suppliers. With the advent of the internet and online shopping, DIY as a key driver of strategic success is no longer the sole USP or Unique Selling Proposition of IKEA and with the proliferation of online retailers who can provide even lower costs because they do not have a physical presence means that they are snapping at the heels of IKEA.
Threats -Increase of competitors. IKEA sources its materials close to suppliers to reduce transporting costs.
The company also uses IWAY approach to closely integrate suppliers with its supply chain. The business operates stores in 38 countries and is present in the major world markets.
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.
The current trend of eating healthier food has resulted in higher demand for grocery products in many developed economies. Best Global Brands in Strengths The biggest strength that IKEA has is its clear vision, which is to add value to its customers irrespective of the market conditions.
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.
Moreover, the company offers the widest product range and positive shopping experience. Weaknesses — Not enough distribution channels.
Growth of average consumer income. 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. Worldwide market presence and strong brand reputation ensures that customers will often choose IKEA over its competitors.
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.
In this way, the company can order large volumes and benefit from lower prices and greater quality while suppliers are assured of guaranteed orders.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. IKEA SWOT Analysis Posted on August 11, by John Dudovskiy SWOT is an acronym for strengths, weaknesses, opportunities and threats related to organizations.
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. 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. 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.Download