CT0221284
Le Nguyen Dan Que – CT0221284
How IKEA will conquer America
05/12/2014
1. Introduction
The purpose of this report is to analyze external business environment on IKEA
Company. The first framework is PESTLE analysis conducted on the USA with six segments - political, economic, sociocultural, technological, ecological and legal. In this part, the report will provide explanations how these six segments impact on IKEA company and draw a conclusion whether this country is attractive for business or not.
The second framework called Porter’s Five Forces Analysis which influences the company more directly than the first one will be done on homewares industry of the U.S.
Customers, suppliers, new entrants, substitute offerings and competitors- these factors effect level will be shown based on several reasons. Lastly, some additional strategies will be suggested for IKEA which can also be carried out in the USA.
2. Company Background
IKEA founded by a Swede named Ingvar Kamprad is currently one of the most successful furniture retailers in the world. IKEA is known as a global phenomenon and there is a famous IKEA’s statement that “Our vision is to create a better everyday life for the many people”. Beside IKEA’s headquarters located at Älmhult, Sweden, there are other 310 outlets in over 38 countries which employed about 127 thousands workers and brought in revenues of 32 billion euros (Rothaermal, 2013). It was estimated that there are over 1.1 million visitors at IKEA’s stores in a day. Today, IKEA supplies thousands different types of home furniture including beds, wardrobes, kitchens, lighting, sofas and so on. Due to its core value of low-priced, stylish and functional products, IKEA shows an excellent performance in its net profit report that reached 2.7 billion euros in 2010
(The Economist, 2011). Although IKEA’s products are most popular in Europe, the USA is its fastest growing market.
3. Country Background
The United States of America (USA) located in North
How IKEA will conquer America
05/12/2014
1. Introduction
The purpose of this report is to analyze external business environment on IKEA
Company. The first framework is PESTLE analysis conducted on the USA with six segments - political, economic, sociocultural, technological, ecological and legal. In this part, the report will provide explanations how these six segments impact on IKEA company and draw a conclusion whether this country is attractive for business or not.
The second framework called Porter’s Five Forces Analysis which influences the company more directly than the first one will be done on homewares industry of the U.S.
Customers, suppliers, new entrants, substitute offerings and competitors- these factors effect level will be shown based on several reasons. Lastly, some additional strategies will be suggested for IKEA which can also be carried out in the USA.
2. Company Background
IKEA founded by a Swede named Ingvar Kamprad is currently one of the most successful furniture retailers in the world. IKEA is known as a global phenomenon and there is a famous IKEA’s statement that “Our vision is to create a better everyday life for the many people”. Beside IKEA’s headquarters located at Älmhult, Sweden, there are other 310 outlets in over 38 countries which employed about 127 thousands workers and brought in revenues of 32 billion euros (Rothaermal, 2013). It was estimated that there are over 1.1 million visitors at IKEA’s stores in a day. Today, IKEA supplies thousands different types of home furniture including beds, wardrobes, kitchens, lighting, sofas and so on. Due to its core value of low-priced, stylish and functional products, IKEA shows an excellent performance in its net profit report that reached 2.7 billion euros in 2010
(The Economist, 2011). Although IKEA’s products are most popular in Europe, the USA is its fastest growing market.
3. Country Background
The United States of America (USA) located in North
References: Bureau of Labor Statistics. (2014). Labor Force Statistics from the Current Population Survey [webpage] Center for Climate and Energy Solutions. (2014). Renewable Energy [webpage]. Czinkota, M. & Ronkainen, I. (2007). International Marketing. United States of America: Thomson South-Western. (2001). IMD World Competitiveness Center. (2011). IMD World Competitiveness Yearbook [webpage] Pew Research Center. (2013). Smartphone Ownership 2013 [webpage]. Retrieved from http://www.pewresearch.org/ Porter, M. (2008). The five competitive forces that shape strategy [webpage]. The Economist. (2011). The secret of IKEA 's success [webpage]. Retrieved from http://www.economist.com/ US Inflation. (2014). US Inflation Rate [webpage]. Retrieved from http://usinflation.org/ World Bank