Swot Analysis of Ikea

Topics: Management, Supply and demand, Marketing, Innovation, Strategic management / Pages: 2 (480 words) / Published: Jul 30th, 2013
CASE 3: IKEA

PROBLEM STATEMENT: How could IKEA sustain and build competitive advantage to improve its profit margin and to expand its marketing coverage?

ANALYSIS: The SWOT Analysis would be appropriate for this case because it analyzes the Strength to develop more; the Weakness to improve; Opportunities to grasp; and Threats to control.

STRENGTH: IKEA’s greatest strength would be its innovative ways and ideas to get buyers to buy their furniture. Starting-off with their concept “democratic design”, and their pioneering “self-assembly” feature, IKEA goes way up on top of their competitors. Not to mention their quality furniture at very low prices, IKEA is one of the leading specialists in retail furniture manufacturing industry with its strong brand image known internationally. Its balance between cost and quality is a major competitive advantage. IKEA can also adapt to cultures like how they adapted to the American market during 1985. Their use of innovative technologies also serve as an advantage to them in this world full of advanced technology.
WEAKNESS: IKEA’s weakness would be the relinquishment of management control by IKEA’s brain and founder: Kamprad. Even though he is the company’s advisor to senior management, direct stirring control is best. They also have a weakness in their supplier relationship. IKEA is used to building long-term relationships and help suppliers develop and purchase new technology and IKEA also demanded high quality at low cost that it ended up in tearing contracts by the suppliers, raised prices and underinvested in new technology leading to their supply base at risk.
OPPORTUNITIES: Consumers desire for high quality furniture at low cost making the market for IKEA a field of opportunity to grow. Considering the growing market demand for low-priced products, IKEA can expand internationally, penetrating markets like the non-Western markets like China.
THREATS: Increased competition where competitors adapt rapidly to IKEA’s high

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