Sustainable Business: IKEA
SWOT Analysis
PEST analysis
Strengths
Weakness
Opportunities
Threats
Customer need - IKEA understands
what its customers want
Too much emphasis on the image - while
it has great brand recognition, customers
may be expecting more from the company
based on its name and reputation
New product development - they are constantly
developing new products to meet its customers'
demands, allowing them to seize market share
from competitors who don't meet customer needs
Recession - It can severely impact on all
aspects of its business, including operations,
finances and brand image as IKEA is very
vulnerable to fluctuations in the economy.
Brand recognition - they use the same
catalog worldwide and translates it into the
various languages of its target markets
Product development capability - they have an
exemplary record when it comes to developing new
products. It's various line of furniture are constantly
in development in order to meet customer's needs
Affordability - the company's ability to provide
quality furniture and home goods at low prices
Superior service - customers feel that their needs and
problems are being taken care of. IKEA gives fast
responses and provides a mail-in-service to resolve issues
Limited capacity - IKEA sometimes struggle to
meet demand for its luxury brands. Customers
may complain of waiting too long for the delivery
Limited product line - their product rage is limited,
with products that may not appeal to all customers.
Other stores have a much broader range of products
Discontinued products - they have a limited product
line and sometimes discontinues them. It can be
frustrating for loyal customers looking for specific items
Brand reach - the brand can be developed in order
to capture a niche market. The company has a
good understanding of what its customers want, and
it can meet their needs with the same quality
products and extend its reach into new markets.
Customization of products - create more
customer-friendly products and services.
Developing new products and Marketing - IKEA can
develop new products and market them at higher price.
Competition - they are in a highly competitive
market and is more often than not up against
some of the world's biggest brands that offer
better products and services at lower prices
Innovation - the brand may face challenges
in maintaining its place in the market. It could
face difficulties against new entrants who offer
even greater value and product quality
Target markets - their target markets are
primarily middle-income countries and emerging
markets where there is greater competition
Inflation and economic factors - it has
high exposure to economies with high inflation
rates especially in developing economies
which could affect product pricing
Political
Economic
Social
Technological
IKEA got mired in political controversy
when its genesis was traced back to
prison labor camps of East Germany
The Lufsig doll incident was another issue
that entered the political realm of Hong Kong
and caused an eruption in the sale of this
artifact in Hong Kong in 2003
IKEA maneuvered the economic crisis
of 2009 due to its leadership plan
The IKEA chain doubled the number of
manufactured goods locally procured in the UK
Strengthening the e-commerce
platform is necessary to provide
a smooth experience to customers
Generation of good customer feedback
is essential to growing the business
IKEA needs to follow cultural norms
while branding to avoid cultural
repercussions from different countries
The company needs to address the
grievances of customers from different
countries to improve its status