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By magakz Aug 19, 2014 584 Words
1. Describe what is a meant by swot analysis?
Identification and evaliation of the strengths and weaknesses inside a firm and the opportunities and threats in its exrenal environment. 3. Analysis ways in which IKEA has managed to minimize threats to its business? IKEA has used various strategies to minimize threats. These go under there different categories. Social trends market forces and economi factors. Social trends:IKEA is building online hepl 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 became sustainable for themselves. Market forces: IKEA is large enough to enjoy economies of scale. This lower average costs in the long run throught, for example, botter use of techology or employing specialized managers. Economies of scale also give a business a competitive edge if cost savings are them passed on to customers in the form of lower prices. This puts up hight barriers to entry for smaller compamies entering the market. Economic factors: IKEA's low prices create appeal amongst its customers in tought financial times. It is vital to keep prices as low as possible when the refail sector is depressed. IKEA's princing strategy targets corasumers with limited financial resources , its products will also appeal to those With higher budgets throught good quality and design. The company must ensure that it is always recognized as having the lowest prices on the market in the future. IKEA it has created a strong system to interact with customer creating customer satisfaction with an online help guide. Not only is this good interaction and follow up for customers but also it is environmentaly friendly and sustainable. In terms of market forces, IKEA has a large market share internationally which make it hard for small companies to emerge . IKEA's economic factors include their atfordable prices that appeal to those with tight financial situations, however the products also appeal to people who are financially stable and who have an eye for interior design. 1. Increasing use of rewenable materials

2. Make better use of both raw materials and energy
3. Volume commitments
4. Economies of scale
5. New technologies
6. Rueducing transportation cost.

4. Discuss the contribution of SWOT analysis to IKEA's business growth? Swot analysis is one of the most useful method to indicate the future policy of a company . It helps to develop business strategy in the most profitable way, as it shows strenghs , weaknesses ,opportunities and threats . It shows all aspects of the company , and it helps to define what is more important to concentrate on, as in many cases a small opportunity can be hard to notice but in future it can result in the failuve , of the company . SWOT

Streghts Weakness
Low prices low level of customer service Big stores with huge big sclae vs low level of control variety of products
Strong brand name competion
Clear vision opaqu organizational stracture Democratic design
Loyalty of employees

Opportunities Threats
Green policy competition other companis with Low price
Expansion on emerging current situation in europe
Developing e-commerce sites.

IKEA is one of the most popular furniture stores in the world. Its profit was approximately €2.7 billion(2010). It proves that this company is a world leader on the market clients to get evething they need as the huge variety of products is available

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