Pestel swot and five forces analysis of ikea

Organizational restructure could also be looked into to increase the quality of service standards provided to customers to keep them both satisfied and happy.

IKEA: SWOT analysis Essay

Due to the limitations of this research, this report would have greatly benefitted from the research of higher valuation of the company through fruitful labour by exploring behavioural strategies of employees and employers.

Porter Five forces Michael porter has identified five pushes to analysed a industry. Therefore the threat of substitutes is relatively low as there are little alternatives that offer the product ranges and costs that IKEA offers. Some of the major reasons for imposing tariffs and trade barriers such as protecting local employment, new industries, consumers, retaliation and national security, tariffs increase the prices of imported products into the country Kourdoumpalou and Karagiorgos, Only few times for a few products, the IKEA bids for the deals with multiple companies to craft the same products.

Employees are the core of a company and should be retained as much as possible due to the current labour crunch in Singapore and be continuously rewarded accordingly to their merits in recognition of their efforts to keep them satisfied.

Included in these are, firm's infrastructure, Man Source of information Management. In International Differences in Entrepreneurship pp. The suppliers acquire a long term agreement with IKEA moving technological advice and leased equipment from the business.

These implemented measures could increase the costs and expenses of enterprises which could spell disaster for businesses relying on cheap foreign labour.

Positive publicity could be brought about and generated by taking up of more corporate social responsibility projects, examples include building of schools for the needy in local communities that are living in poverty and also caring for the environment by engaging staff to undertake voluntary work such as cleaning up of public areas, if this strategy is incorporated successfully, it will overshadow the negative publicity that they have received.

Bargaining power of suppliers This force is weak because suppliers of IKEA are constantly competing to maintain their relationship with the global giant who can easily access resources and capabilities in the form of potential suppliers, seeking opportunities to form affiliation with IKEA.

Cost leadership and product quality has enabled IKEA to become a market leader. The sales turnover is recorded as IKEA has an opportunity to expand its grocery business by introducing more grocery stores in its current retail places. Not just that, it also wants its cotton and wood to be sourced from sustainable resources.

In addition, the company offers to provide more high quality furniture that sticks to their original concept - stylish furniture at low prices. Bargaining power of buyers: With the importance of survival for the country as a whole due to its lack of natural resources, Singapore places great emphasis and importance on the development of its economy.

So the additional costs come from changing business practices, compliance with the law, damaged reputation and image within the consumer market etc. Online sales grow constantly and with million visitors to its website IKEA could exploit this opportunity and benefit from increased sales and lower costs.

The economic condition of a market is also an important factor that affects the pricing in particular regions and areas. IKEA can easily switch from one supplier to another whereas if a supplier loses business from IKEA, it can be a difficult situation for him.

IKEA is widely known for their modern architectural designs for various home appliances and furniture. Therefore, this weak industrial force in case of IKEA actually sanctions the corporation to optimise resources and maximise its profits. With stores spanning across 43 countries, it is no surprise that the mega corporation is well respected in the furniture industry by both competitors and other businesses alike.


Singapore is revered for being a highly developed trade-oriented market economy and has achieved the highest trade to GDP ratio in the world. Bargaining power of buyers This force is strengthening by factors such as intense competition, and wide choice of substitute products.

A continuing strife for development in all areas of the worthiness chain is an effective way to form the industry to better-fit IKEA's future strategies.

In particular with the emerging economies showing high potential of economic growth, provides a promising future Thelander, for corporation such as IKEA.

IKEA believes there is absolutely no concession between being able to offer good quality products and low prices.

Bargaining power of buyers: The suppliers must comply otherwise they can be removed. Therefore, the business inability to offer better quality more customized products allows its competitors to fill that niche and fortify their position in it.

IKEA stores plus some of other competitor do not reach many small towns and this is an opportunity for the new opponents to go into small and midsize cities with smaller stores and less selection.

SWOT analysis of IKEA

The sales went up to IKEA also focuses heavily on marketing and promotion. Due to the low-pricing strategy, IKEA's profit percentage also affects the prices in recycleables than by prices in labour. Introduction and Company overview IKEA, a global furniture retailer, is established on the concept of offering wide range of functional, well-designed and low-cost home furnishing products.

Threat from New entrants: The company came under fire for Photoshopping women out of its catalogue in Saudi Arabia and for removing a lesbian couple from its magazine in Russia.


A healthy economy comes with returns of high employment rates and increased wages of workers.PESTEL, SWOT and five forces examination of IKEA IKEA is a home products shop with its branches spreading internationally and it is privately possessed. It markets furniture, Bathroom and Kitchen items and accessories in toned packages.

February 16, Print. This is IKEA International Group SWOT analysis in For more information on how to do a SWOT analysis please refer to our article. IKEA Group Report contains a full analysis of IKEA Porter’s Five Forces Analysis.

The report illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Value Chain analysis and McKinsey 7S Model on IKEA. SWOT analysis IKEA’s goals of sustainability and environmental design are central to its business strategy.

It has launched a new sustainability plan. This is a five forces analysis that helps know how these forces affect the competition for IKEA.

It is based on Porter’s five forces model. These five forces are there in every industry and business and affect the attractiveness and competitiveness of the industry.

Five Forces Analysis of IKEA

A PESTEL/PESTLE/PEST ANALYSIS of IKEA. IKEA operates its more than stores in various parts of the globe. Its global presence means .

Pestel swot and five forces analysis of ikea
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