IKEA-swot-analysis

IKEAisaninternationallyknownhomefurnishingretailer.Ithasgrownrapidlysinceitwasfoundedin1943.Todayitistheworld'slargestfurnitureretailer,recognisedforitsScandinavianstyle.ThemajorityofIKEA'sfurnitureisflat-pack,readytobeassembledbytheconsumer.Thisallowsareductionincostsandpackaging.IKEAcarriesarangeof9,500products,includinghomefurnitureandaccessories.ThiswiderangeisavailableinallIKEAstoresandcustomerscanordermuchoftherangeonlinethroughIKEA'swebsite.Thereare18storesintheUKtodate,thefirstofwhichopenedinWarringtonin1987.InJuly2009IKEAopenedastoreinDublintoo-itsfirstinIreland.!IKEAstoresincluderestaurantsandcafésservingtypicalSwedishfood.TheyalsohavesmallfoodshopssellingSwedishgroceries,everythingfromthefamousmeatballstojam.Storesarelocatedworldwide.InAugust2008theIKEAgrouphad253storesin24countries,withafurther32storesownedandrunbyfranchisees.Itwelcomedatotalof565millionvisitorstothestoresduringtheyearandafurther450millionvisitsweremadetotheIKEAwebsite.IKEAsalesreached21.2billionEurosin2008showinganincreaseof7%.ThebiggestsalescountriesareGermany,USA,France,UKandSweden.In2008IKEAopened21newstoresin11countriesandexpectstoopenaround20morein2009aspartofitsstrategyforgrowth.LowpricesareoneofthecornerstonesoftheIKEAconceptandhelptomakecustomerswanttobuyfromIKEA.Thislowpricestrategyiscoupledwithawiderangeofwelldesigned,functionalproducts.IKEA'sproductscaterforeverylifestyleandlifestageofitscustomers,whocomefromallagegroupsandtypesofhouseholds.Thisisvitalintimeswhentheretailsectorisdepressed,asitincreasesIKEA'spotentialmarket.!SinceitwasfoundedIKEAhasalwayshadconcernforpeopleandtheenvironment.TheIKEAvision'tocreateabettereverydaylifeforthemanypeople'putsthisconcernattheheartofthebusiness.IKEAhasrespondedtothepublic'srisingconcernforsustainabilityinitschoiceofproductrange,suppliers,storesandcommunication.Ithasalsospottedbusinesspotentialinprovidingsustainablesolutions.IKEA'sconcernforpeopleandtheenvironmentencouragesittomakebetteruseofbothrawmaterialsandenergy.Thiskeepscostsdownandhelpsthecompanytoreachitsgreentargetsandhaveanoverallpositiveimpactontheenvironment.ThiscasestudywillshowwhyIKEAbelievesastrongenvironmentalstanceisgoodbusinesspractice.IKEA'sgoalsofsustainabilityandenvironmentaldesignarecentraltoitsbusinessstrategy.Ithaslaunchedanewsustainabilityplantotakethecompanythroughto2015.Thiswillcombinesocial,environmentalandeconomicissues.IKEAusesSWOTanalysistohelpitreachitsobjectives.Thisisastrategicplanningtool.Ithelpsthebusinesstofocusonkeyissues.SWOTisthefirststageofplanningandlooksattheStrengths,Weaknesses,OpportunitiesandThreatsinvolvedinaprojectorbusinessventure.!Strengthsandweaknessesareinternalaspects.Thismeansthattheyarewithinthecontrolofthebusiness.Theymayrefertoaspectsofmarketing,finance,manufacturingororganisation.Opportunitiesandthreatsareexternalfactors.Thismeansthattheyareoutsidethecontrolofthebusiness.Thesemayincludetheenvironment,theeconomicsituation,socialchangesortechnologicaladvances,suchastheinternet.Abusinesscancreateopportunitiesandcounterthreatsbymakingthemostofitsstrengthsandaddressingitsweaknesses.Forexample,oneofIKEA'skeystrengthsisitsstrategicaimtousenomorematerialthannecessaryintheproductionofeachitem.Inaddition,itdevelopsitsproductplanstoincreaseitsuseofwasteorrecycledmaterials.Oneparticulartable,theNORDENtable,usesknottybirchwood.Theknotsinthiswoodusuallymeanitisrejectedbyotherretailersandmanufacturersasunsuitableforuse.However,IKEAhasmadetheknotspartofitsdesignfeature.OGLAchairsaremadeusingwoodwastefromsawmillsandLACKtablesusea'sandwich'ofstiffcardbetweenwoodsheetstoreducetheamountofsolidwoodneeded.StrengthsStrengthscouldincludeacompany'sspecialistmarketingexpertiseoritslocation.Theyareanyaspectofthebusinessthataddsvaluetoitsproductorservice.IKEA'sstrengthsinclude:astrongglobalbrandwhichattractskeyconsumergroups.Itpromisesthesamequalityandrangeworldwideitsvision'tocreateabettereverydaylifeformanypeople'astrongconceptbasedonofferingawiderangeofwelldesigned,functionalproductsatlowpricesa'democraticdesign'reachinganidealbalancebetweenfunction,quality,designandprice.IKEA's'CostConsciousness'meansthatlowpricesaretakenintoaccountwheneachproductisdesignedfromtheoutset.!ThesestrengthscontributetoIKEAbeingabletoattractandretainitscustomers.OnewayIKEAmeasuresitsstrengthsistheuseofKeyPerformanceIndicators(KPI).KPIshelpIKEAtoassesstheprogressofitsvisionandlong-termgoalsbysettingtargetsandmonitoringprogresstowardsthese.AnexampleofoneofIKEA'sKPIsisthepercentageofsuppliersthatarecurrentlyIWAYapproved.TheIWAYistheIKEAWayofPurchasingHomeFurnishingProducts.ThisguidelinedefinesthesocialandenvironmentalrequirementsIKEAexpectsofitssuppliers.IKEAhasstrengthsrightthroughitsproductionprocesses:IncreasinguseofrenewablematerialsIKEAimproveditsoverallusefrom71%in2007to75%in2009.'Smarter'useofrawmaterialsIKEAincreasedtheuseofrecycledorreclaimedwasteproductsinenergyproductionacrossallstoresfrom84%in2007to90%in2009.VolumecommitmentsIKEAbelievesincreatinglong-termpartnershipswithitssuppliersinordertoachievethis.Byc