IKEA Group owned by Stichting INGKA Foundation is the largest furniture and home appliances manufacturer and retailer in the world. Founded seven decades ago in Småland, southern Sweden by Ingvar Kamprad, today IKEA Group has 340 stores in 28 markets around the world. Moreover, the global furniture retailer has 22 Pick-up and Order Points in 11 countries, 41 Shopping Centres in 15 countries and 38 Distribution sites in 18 countries. IKEA employs about 163,600 people globally and its portfolio comprises 9500 products. In the financial year of 2016, IKEA Group generated sales of EUR 34.2 billion.

Together with the rental income from the shopping center business, total revenue increased by 7.4 percent to EUR 35.1 billion. The company’s net profit for the same period amounted to EUR 4.2 billion. In FY2016, IKEA attracted 783 million store visits and 425 million shopping center, visitors. IKEA’s vision is “to create a better everyday life for the many people” and the company follows an extreme cost leadership business strategy along with new product development strategy to realize this vision. International market expansion strategy also represents an important element of IKEA business strategy. Leadership style exercised to manage the home improvement and furnishing chain can be branded as leading by example, as set by the founder of the business Ingvar Kamprad.

The furniture giant has a unique organizational structure integrating a large number of companies operating under the IKEA trademarks. All IKEA franchisees are independent of Inter IKEA Group. A large group of franchisees are owned and operated by INGKA Group. Inter IKEA Group and INGKA Group have the same founder, and a common history and heritage, but have operated under different owners and management since the 1980s. IKEA possesses a number of noteworthy strengths such as market leadership, ownership and efficient application of democratic design concept and solid financial position of the business. At the same time, the global furniture retailer has serious weaknesses as well.

These include a weak presence in Russia, difficulty to sustain the competitive advantage and the lack of flexibility of the business due to its large size.

From the given company, study its market and describe:

1. Its business model canvass and

2. Its SWOT analysis

Answer rating: 100% (QA)

1 IKEA Business Model Canvas IKEA engage in both manufacturing and retail activities Its key partners include wood makers wood harvesters transport fi... View the full answer