Internal and External Factors Analysis of IKEA

 Running head: ANALYSIS OF IKEA 1
Internal and External Factors Analysis of IKEA
Student Name
University
ANALYSIS OF IKEA 2
INTERNAL AND EXTERNAL FACTORS ANALYSIS OF IKEA
I. COMPANY'S OVERVIEW
II. CHARACTERISTICS OF IKEA
III. OPERATIONS AT IKEA
IV. INTERNAL FACTORS ANALYSIS
A. Strengths
B. Weaknesses
V. EXTERNAL FACTORS ANALYSIS
A. Opportunities
B. Threats
VI. CONSUMER BEHAVIORS INFLUENCING IKEA'S MARKETING STRATEGIES
VII. IKEA’S POSITIONING IN THE GLOBAL MARKET
VIII. CONCLUSION
IX. RECOMMENDATIONS
ANALYSIS OF IKEA 3
Internal and External Factors Analysis of IKEA
Company's Overview
IKEA is an international home products company. It has developed quickly since
it was founded in 1943 by Ingvar Kamprad. At present, it is one of the world's leading
furniture and textile retailers. IKEA offers more than 9,500 products, including a
complete range of home and office furnishings, equipment, lighting, and accessories.
This extensive range is available in all IKEA outlets, and consumers can order a variety
of items online on IKEA's official website. At this point, there are 18 outlets in the UK,
with the first one launched in Warrington in 1987. In July 2009, IKEA introduced its
products in Ireland and opened an outlet in Dublin (“IKEA SWOT analysis”, 2010). Over
the previous 60 years, IKEA has grown from a simple enterprise into a cluster of
companies with 76,000 associates. At the same time, an exceptional corporate culture
with its own set of principles has been developed. The achievements of IKEA have
been built upon zeal and eagerness, a steady aspiration to renew and progress, costconsciousness and readiness to provide a hand and take accountability (“Our values”,
n.d.). The paper will make an internal and external analysis of the company to reveal its
strength, weaknesses, opportunities, and threats as well as its place in the global
market.
IKEA is a one-stop store satisfying the diverse needs of potential consumers and
offering a variety of household and office products. These items have been carefully
selected for the customers to be able to make their homes more attractive and
comfortable. The consumers have an access to all kinds of products under one roof,
and this is intended to improve their buying experiences. A wide variety of goods and
ANALYSIS OF IKEA 4
their design attract millions of customers from all over the world every year. The key
goal of IKEA is to assist its clients in implementing their own ideas and improving their
surroundings. That is mainly done by offering them an extensive range of premade
furniture, textile, and utensils for their homes and offices at reasonable prices. Sweden
is IKEA’s country of origin, while its product designs come from different parts of the
world, making it one of the most progressive companies in the market. In IKEA,
customers have opportunities to choose from a wide range of products and get
professional assistance from the IKEA staff.
Characteristics of IKEA
For both the company’s customers and employees, IKEA is a unique company.
Simplicity, which is one of IKEA’s main features, is the key to the company’s success.
This principle is applied to everything, from the way the management operates to the
relationships between managers, employees, and customers. For example, managers
and subordinates work on the same tasks, share the same car parking facilities, and eat
side by side in the same cafeterias (“Our values”, n.d.). The company’s personnel is an
immensely valuable asset at IKEA, which is perpetually trying to enlarge the assortment
base and improve the quality of its products and services (“Our values”, n.d.). The
creative approach and original designs along with reasonable pricing policy contribute to
the company’s competitive advantage and explain its success in going through the crisis
periods.
IKEA is also famous for offering identical items in all countries. The number of
the company`s products offered at one store ranges from 8,000 to 10,000 goods,
depending on the outlet's size. At the same time, the international strategy adopted by 
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the company is in adjusting to the specific atmosphere and national traditions of the
country in which an outlet is operating. For instance, in China, the store layouts imitate
the design of traditional Chinese apartments. In particular, the outlets contain a balcony
sector because many Chinese apartments have balconies (Miller, 2004). Thus, the
store locations, design, and display are usually adjusted to the overall market
requirements and consumer behavior.
IKEA exhibits its massive range of more than 10,000 items in cheap out-of-town
outlets. Most of its products, especially furniture, are sold as knock-down kits, for
customers to take the products to their homes and collect them on their own. The
combination of corporate traditions and flexibility in preserving similar assortment in
different locations and at the sa