REPORT ON IKEA
GROUP MEMBERS:
SIDDHI GAUR (2019BBRM054)
ROMA KINGRANI (2019BBRM046)
PRINCE RAI (2019BBRM0
SHANYA AGNIHOTRI (2019BBRM051)
INTRODUCTION
• IKEA is a company based in Sweden, which operates in
42 countries and has over 70,000 employees among
these 59,000 works in European countries. It is one of
the major retailers of furniture and house wares in the
world.
• IKEA has been the world's largest furniture retailer since
2008.
• The company has penetrated several countries across
Europe, Asia, Middle East, North America and Australia.
It has attracted many customers across the world.
• It manufactures its own furniture and sells them in
stores that are spread throughout the world.
• The company purchases items in bulk and store them
unassembled which enables the customer to assemble
many items at home.
SWOT ANALYSIS
STRENGTHS:
• Customer knowledge:
One of the key competitive advantages IKEA has is its
extensive knowledge about the customers.
• Constantly using innovations to drive costs down:
Low prices are the cornerstone of IKEA business idea
and the company always try to do things as efficient
and cost-effective as possible.
• Supply chain integration:
IKEA is committed to long lasting relationships with
its suppliers.
• Brand reputation and market presence:
According to Inter-brand, IKEA is the most valuable
furniture retailer brand in the world, valued at nearly
$US 12.8 billion in 2012.
• Diversified product portfolio:
Unlike IKEA’s largest competitors, the company has
fairly diversified businesses.
WEAKNESSES:
• Negative publicity:
Negative publicity decreases brand reputation and
customer loyalty.
• Low quality of products and services:
IKEA is unable to find compromise between
continuous cost reductions while maintaining the
same quality of products.
• Standard products:
IKEA’s main competitive advantage derives from low
costs, which in part are achieved due to standardized
products.
THREATS:
• Intensifying competition:
Many low cost retailers such as Walmart, ASDA or
Tesco are entering homeware specialists market
where IKEA operates.
• Growth of average consumer income:
Growth of average consumer income means that
people buy less low price and low quality products,
which is exactly what IKEA offers in its stores.
OBSERVATIONS
• We observed that how IKEA uses the forced
path store layout as a psychological weapon.
• IKEA has a very different layout which
improves their sales and their profits are in
billions.
• Every part of the store is to be seen which
increases that the likelihood of all their
merchandise is seen.
RECOMMENDATIONS
• The company can develop a strategy to select a niche
market in areas where the purchasing power is likely to
increase in the future.
• The company should also come up with strong
marketing strategies to penetrate further in Asian,
Australian, and Middle East markets.
• The company should consider improving its pricing
strategy.
• The company should change its policy and start hiring
people from different backgrounds and personalities.
This will help in developing of new ideas and innovation.
CONCLUSION
• According to its mission statement, the company aims at
reducing cost of production and achieving competitive
advantage through cost efficiency and improvement of the
value chain.
• IKEA demonstrates that, strategic partnership with
manufacturers and suppliers is the key to success.
• IKEA stores are relatively spacious to accommodate a wide
range of furnishing items. While most of IKEA’s furniture is
cheap, longevity is not one of its qualities. In most cases,
affordability does not go hand in hand with quality. IKEA
furniture does not last for many years.
