Creating a better everyday life for the many people! IKEA is a Swedish Home furnishings company founded by Ingvar Kamprad in 1943 in Småland in southern Sweden. At the age of five Ingvar Kamprad started his journey as an entrepreneur selling matches to his nearby neighbours. From matches he expanded his business to selling flower seeds, greeting cards, Christmas tree decorations, and later pencils and ball-point pens. When Ingvar was 17, his father gave him money as a reward for succeeding in his studies. He used it to establish his own business, IKEA. The name IKEA was formed from the his initials (IK) plus the first letters of Elmtaryd (E) and Agunnaryd (A), the farm and village where he grew up. IKEA originally sold sells pens, wallets, picture frames, table runners, watches, jewellery and nylon stockings. Furniture was introduced into the IKEA range in 1948 and the rest is history! Our mission is to give people with thin wallets a chance to furnish their homes in a beautiful and functional way.

We call it “Democratic Design”. IKEA Yearly Summary 2014 The new IKEA Catalogue is filled with exciting stories behind our products and new ideas that will make you love your mornings and evenings just a little bit more. SWOT analysis of IKEA This is IKEA International Group SWOT analysis in 2013. For more information on how to do a SWOT analysis please refer to our article. € 27.628 billion (2012) € 3.202 billion (2012) Argos, Ashley Furniture Home Stores, B&Q, Bob’s Discount, John Lewis, Pier 1 Import, Rooms To Go and many others. You can find more information about the business in its official website or Wikipedia’s article. IKEA SWOT analysis 2013 Constantly using innovations to drive costs down Brand reputation and market presence Further expansion into developing economies Expansion to growing grocery market Growth of average consumer incomeOne of the key competitive advantages IKEA has is its extensive knowledge about the customers.

The company understands the purchasing factors that influence customers to buy and implements the best practices to induce that decision. IKEA offers low prices and a huge range of products. Designers constantly introduce new design products that look stylish in the eyes of customers. second hand chairs leicesterAll the products are designed so it would be easy to transport and assemble. shower commode chair canadaMoreover, the company offers the widest product range and positive shopping experience. cheapest stressless recliner chairsAll of these factors are aligned with what customers want and need and which results in higher sales. louis ghost chair toronto

Without such extensive customer knowledge and best practices to benefit from that knowledge, IKEA would be unable to outcompete its current competitors. Constantly using innovations to drive costs down. 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. replica eames chairs londonTo drive costs down all the time, the company must find new and innovative ways to do that and to incorporate them in its businesses model. table and chair rentals lehigh valley paThe business’ innovations include new materials that contribute more to sustainable environment and are less costly or using newest ways of packaging, handling and transporting materials.IKEA is committed to long lasting relationships with its suppliers.

In this way, the company can order large volumes and benefit from lower prices and greater quality while suppliers are assured of guaranteed orders. 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. All the efforts of closely integrating supply chain results in lower costs and a competitive advantage. Brand reputation and market presence. According to Interbrand, IKEA is the most valuable furniture retailer brand in the world, valued at nearly $US 12.8 billion in 2012. The business operates 332 stores in 38 countries and is present in the major world markets. More than 600 million customers visit IKEA stores every year. Worldwide market presence and strong brand reputation ensures that customers will often choose IKEA over its competitors.Unlike IKEA’s largest competitors, the company has fairly diversified businesses. In addition to its furniture products, the company operates restaurants, houses and flats.

Although, firm’s main business is designing, manufacturing and selling furniture it is not so affected by the changing forces in this market as other furniture retailers.The company has been criticized many times for issues like poor treatment of employees, questionable advertising practices or lobbying government authorities. 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. According to UK Customer Insights report on IKEA by Verdict, IKEA’s customers are less satisfied with its product and services quality than the average customer in UK buying at other stores. Firm’s cost reductions lead to decreasing product quality, which was followed by higher number of products returned and damaged brand.IKEA’s main competitive advantage derives from low costs, which in part are achieved due to standardized products.

Standardized products attract fewer customer segments. Therefore, the business inability to offer better quality more customized products allows its competitors to fill that niche and fortify their position in it. Further expansion into developing economies. Retail markets grew by at least 5% on average in emerging markets in the last year, opening huge opportunities for IKEA’s revenue growth. The company currently operates in most of the developed economies but hasn’t firmly stepped into developing economies, except China. 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.Online retail sales account for 17% and 4% of total retail sales in UK and US respectively. Online sales grow constantly and with 870 million visitors to its website IKEA could exploit this opportunity and benefit from increased sales and lower costs. Expansion to growing grocery market. The current trend of eating healthier food has resulted in higher demand for grocery products in many developed economies.