1. Introduction:

In these document we will look at IKEA SWOT analysis, the world leading furniture and home appliance giant. The corporate was based in 1943 and is thought for its simplicity nevertheless effective approach to marketing with the DIY (do-it-yourself), that ensures that the corporate keeps prices to a minimum and passes on the worth to the purchasers.

The product oversubscribed by IKEA square measure principally able to use and flat packed which means that they will be assembled by the purchasers themselves. the corporate includes a presence within the on-line world in addition and therefore the total sales from its on-line and offline businesses square measure over a Billion bucks annually. The key strategic driver of IKEAs success is its no nonsense approach to marketing that has paid made dividends for the corporate and its shareholders (literally and metaphorically).

2. Identify Internal Strengths & Weaknesses:

The biggest strength that IKEA has is its clear vision, that is to feature price to its customers regardless of the market conditions. This has translated into an well-defined business strategy and an approach to marketing, that is pioneering in its simplicity and deadly in its targeting of competitors and effective in its positioning.

Another key strength of the corporate is its clear construct that interprets into An array of product that may be assembled by the purchasers themselves resulting in humungous value reductions that square measure then passed on to the purchasers. With its resolute specialize in value leadership, IKEA has emerged because the worlds leading retail merchant of article of furniture.

IKEA measures its strengths is the use of Key Performance Indicators (KPI). KPIs help IKEA to assess the progress of its vision and long-term goals by setting targets and monitoring progress towards these. An example of one of IKEA's KPIs is the percentage of suppliers that are currently IWAY approved. The IWAY is the IKEA Way of Purchasing Home Furnishing Products. This guideline defines the social and environmental requirements IKEA expects of its suppliers..

IKEA's has a strong global brand which attracts key consumer groups. It promises the same quality and range worldwide, its vision 'to create a better everyday life for many people', a strong concept based on offering a wide range of well designed, functional products at low prices and a 'democratic design' reaching an ideal balance between function, quality, design and price. IKEA's 'Cost Consciousness' means that low prices are taken into account when each product is designed from the outset.

IKEA has strengths right through its production processes Increasing use of renewable materials improved its overall use from 71% in 2007 to 75% in 2009. 'Smarter' use of raw materials IKEA increased the use of recycled or reclaimed waste products in energy production across all stores from 84% in 2007 to 90% in 2009, also volume commitments IKEA believes in creating long-term partnerships with its suppliers in order to achieve this. By committing to buying large volumes over a number of years IKEA can negotiate lower prices. This also benefits the suppliers because they enjoy the greater security of having guaranteed orders.

Weaknesses

IKEA has to acknowledge its weaknesses in order to improve and manage them. This can play a key role in helping it to set objectives and develop new strategies.

Given the very fact that IKEA size and scale of its global business. This could make it hard to control standards and quality, Some countries where IKEA products are made do not implement the legislation to control working conditions. This could represent a weak link in IKEA's supply chain, affecting consumer views of IKEA's products. The most be backed up by training and inspectors visiting factories to make sure that suppliers meet its requirements.

With its obsessional the need for low cost products. This needs to be balanced against producing good quality. IKEA also needs to differentiate itself and its products from competitors. IKEA believes there is no compromise between being able to offer good quality products and low prices.

IKEA needs to keep good communication with its consumers and other stakeholders about its environmental activities. The scale of the business makes this a difficult task. IKEA produces publications in print and online (for example 'People and the Environment') and carries out major TV and radio campaigns to enable the business to communicate with different target audiences.

3. Identify External Opportunities & Threats:

Opportunities

With its green business model, IKEA takes advantage of through its sustainability agenda, a growing demand for greener products, a growing demand for low priced products. Trends in the current financial climate may result in consumers trading down from more expensive stores and demand for reduced water usage and lower carbon footprints.

Perhaps IKEA has a number of areas to focus to its work with sustainability, each of which it supports in various ways. They introduce Solutions for a sustainable life at home IKEA gives online tips and ideas for this. Very important area Sustainable use of resources. IKEA aims for zero waste to landfill, wastewater treatment and programmes to reduce its use of water.

The other chance lies within the companys reducing carbon footprint. IKEA aims to reduce energy use, use more renewable energy, cut its use of air transport and reduce packaging. Its green transport initiative includes an aim to reduce business flights by 20% in 2010 and 60% by 2015.

Threats

IKEAs must be aware of possible external threats, it can plan to counteract them. By generating new ideas, IKEA can use a particular strength to defend against threats in the market.

With the appearance of the web and on-line searching, Social trends such as the slowdown in first time buyers entering the housing market. This is a core market segment for IKEA products. Market forces more competitors entering the low price household and furnishings markets. IKEA needs to reinforce its unique qualities to compete with these.

4. SWOT Analysis and Evaluation:

Social trends : IKEA is building online help to guide customers to a more sustainable life. Here it can focus on home improvement in the slowing housing market. It supports customers with tips and ideas on its website to reduce their impact on the environment. This will also save them money. Staff are trained on sustainability, both on what IKEA is doing and how they can take responsibility to become sustainable for themselves.

Market forces : IKEA is large enough to enjoy economies of scale. This lowers average costs in the long run through, for example, better use of technology or employing specialized managers. Economies of scale also give a business a competitive edge if cost savings are then passed on to customers in the form of lower prices. This puts up high barriers to entry for smaller companies entering the market.

Economic factors : IKEA's low prices create appeal amongst its customers in tough financial times. It is vital to keep prices as low as possible when the retail sector is depressed. IKEA's pricing strategy targets consumers with limited financial resources. Its products will also appeal to those with higher budgets through good quality and design. The company must ensure that it is always recognised as having the lowest prices on the market in the future. Communication plays an important role here.

5. Recommendations:

IKEA a well-known global brand with hundreds of stores across the world. In order to improve performance, it must assess its external and competitive environment. This will reveal the key opportunities it can take advantage of and the threats it must deal with. IKEA responds to both internal and external issues in a proactive and dynamic manner by using its strengths and reducing its weaknesses. Through this, IKEA is able to generate the strong growth it needs to retain a strong identity in the market..

IKEA's believes that there is no compromise between doing good business and being a good business. It aims to go beyond profitability and reputation. IKEA is intent on becoming a leading example in developing a sustainable business. This will create a better everyday life for its customers. IKEA has discovered a business truth being sustainable and responsible is not just good for customers and the planet, it is also good for business!

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