Essays on IKEA Case Study

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IntroductionIKEA has been working in the industry since 1943 and is one of the major furniture dealers in the world. Being in the business for such a long period has enabled them to have the largest chain of furniture stores which deals in a variety of furniture, bathroom fittings, accessories and kitchen fittings” (Company Website, 2012). IKEA has ensured growth by having policies which favour the business and has resulted in the store having more than 300 in 37 different countries (Company Website, 2012). The company has followed a policy of differentiation and being the cost leader looks to provide quality furniture at the lowest possible rates.

The company has looked towards differentiation as their main strategy which has ensured that all their stores are designed similarly so that customers visiting the stores anywhere in the world find the same feeling (IKEA, 2012). To ensure effective marketing the company has worked on loyalty programs, discounts and continuously innovating so that customers find something new every time they visit the stores. The paper thereby looks into the SWOT Analysis which helps to understand the internal analysis, the external analysis through PESTEL and Porter five force models.

This helps to identify the generic strategy of IKEA being of a low cost provider along with being the differentiator in the market. SWOT AnalysisThis analysis works on the internal analysis and helps to understand in the manner in which IKEA will be able to use its resources and capabilities to develop itselfStrengthsIKEA produces its product under the brand name Swedwood and is done by the company itself which has ensured consistency in quality and design (SWOT, 2012).

This has helped to ensure optimum production and minimizing wasteIKEA looks towards designing products itself which has ensured that the design are concealed and the chances of duplicity is reduced (SWOT, 2012)IKEA has a strong brand position due to being in the business for agea and having operations almost over the entire world (SWOT, 2012)Strong supply and distribution network ensuring regular supply of raw materials which are transformed into finished products and made available at the different stores over the world (SWOT, 2012)Unique business proposition of being a differentiator as well as a low cost producer has ensured to create a niche marketHaving the services of specialist has ensured that the business works on the global standard and matches the code of conduct prescribed by the companyWeaknessLimited penetration level in some countries due to lack of adequate stores has ensured customers switching the products which has thereby relatively reduced the demand for furniture (SWOT, 2012)Lack of consistency which has resulted in the products being called off from the market has created a negative perception about the product in the mind of the consumer making them to look towards alternatives (IKEA SWOT, 2012)OpportunitiesSourcing furniture from other destinations which are low cost provider like China will help to ensure that their generic strategy provides the required dividend and ensures growth for the business (IKEA SWOT, 2012)Moving towards online mode due to increased penetration of internet which will help to ensure that the company is able to sell their products through a different mode which will increase sale (IKEA SWOT, 2012)Looking towards promoting themselves on the background where they bank to be green and reduce the effect on environment (IKEA SWOT, 2012)

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