IKEA SWOT and PESTLE Analysis

The SWOT analysis for IKEA gives insight about company’s strengths, weaknesses, opportunities and threats. SWOT analysis is a method of understanding the key internal and external factors that affect the company. The internal analysis illustrates that the D.I.Y. or Do It Yourself concept of assembling the furniture is a major strength of the company, as it minimizes the overall cost involved in manufacturing of furniture. That’s exactly why IKEA furniture is comparatively cheaper, bringing in competitive advantages. IKEA’s key performance indicators are the right usage of raw materials; focus on use of renewable materials and most importantly keeping great design products affordable yet never compromising on quality. IKEA's practice of offering high product quality at low prices is a part of IKEA's veritable strategy and key component for driving sustainable business growth. One of IKEA’S weaknesses is that their store designs needs to be lavish, because IKEA has approximately 10,000 products per store, and this requires high lead time to set up new stores. While DIY concept continues to be IKEAS’s strength it also has some adverse effects on the company. For instance in some Asian countries DIY culture has not interested the masses, leading to a very low or absolutely zero demand of IKEA furniture which is a clear threat to the company. However IKEA is setting up its stores in India and Serbia in 2018 and this is an opportunity as it can expand its base in other developing countries and emerging markets.

IKEA’s major competitors are rent based furniture or ecommerce platforms offering ready-to-use furniture, as they give IKEA high competition in terms of cost and contradicting concept of business model. These rivals are more likely to create adverse impact on people by creating a negative impression about DIYIKEA strategy when ready-to-use is available and can hurt IKEA’s USP posing an open challenge and a major threat to the IKEA Co. An insightful study of the internal and external analysis of IKEA, gives a neat picture about IKEA's business case and strategy.

SWOT & PESTLE (combined)
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Detailed SWOT Analysis of IKEA

The PESTLE/ PESTEL/ STEEPL/PEST analysis report of IKEA gives detailed information about the external analysis of the company. The PESTLE tool is utilized to understand how all the 6 external factors, namely, political, economical, technological, legal and environmental create an impact on IKEA group. Multinational companies operating across geographies are subjected to political and legal factors, as every country has their own set of policies and regulations, so the globally placed ready-to-assemble furniture brand IKEA is no exception. Luckily IKEA has environmental and social factors in its favor as the brand has successfully managed to cultivate a viral DIY culture amidst its audience and is clearly making a social impact by having its vision & mission focused towards providing better lifestyle to the masses at very economic pricing. IKEA's business strategy and competitive advantage lay in partnering with the customers. Earlier, beautiful home furnishings was only the private possession of the aristocratic class, but IKEA through its innovative business ideas have brought good looking high quality furniture to the masses. Their designers look for smart ways to design furniture using existing production processes and then they look out for best raw material suppliers globally to buy in bulk on a global scale to compete on prices. The IKEA business model works on bridging the gap between supplier and consumers with an eye on volumes and prices. IKEA’s USP or Unique selling proposition of DIY furniture with maximum use of recycled materials has not only helped them grow economically but also made them a sustainable and socially responsible brand.

SWOT & PESTLE (combined)
Complete Report
USD 12.53

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Detailed Pestle Analysis of IKEA

• The SWOT and PESTLE analysis report of IKEA presents an understanding of the complex internal and external factors affecting the brand and its operations.
• The report gives a brief overview about, IKEA’s history, founders, turnover, revenue and about who owns IKEA.
• The SWOT and PESTLE report helps track key facts like, market value, market segmentation, diversification, mergers and acquisitions etc. about the IKEA Co.
• The SWOT analysis report covers all the factors that describes the major strengths and weaknessesof world’s largest furniture retailer IKEA
• The report lends intelligence on the external analysis, comprising the opportunities and low hanging fruits which can be harvested to achieve international growth and expansion. It also talks about some pertinent threats to the company that threatens to impede growth.
• The analysis also shows appreciation in share price of IKEA Co.
• Gives insight into IKEA's DIY strategy and business model that has helped it to has been a successful pioneer brand in providing ready to assemble furniture.
• Interpretation of IKEA’s USP which has created the D.I.Y. Culture amidst its audience and has set a benchmark in the furniture industry.
• Core competitive advantages enjoyed by IKEA group over its peers and competitorsin the furniture retail industry
• Insights about micro and macro factors through internal and external analysis
• In depth understanding of the effect of all external factors like, political, economical, social, technological, legal and environmental, on the operations of IKEA group.