Problems Faced by Furniture Sector

Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................4
TASK 1 ...........................................................................................................................................4
Problems faced by Furniture Sector...........................................................................................4
TASK 2............................................................................................................................................5
PESTEL analysis of IKEA..........................................................................................................5
TASK 3............................................................................................................................................6
Positive impact on Business- .....................................................................................................6
Negative impact of Business.......................................................................................................6
TASK 4............................................................................................................................................7
REFLECTION............................................................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES................................................................................................................................9

INTRODUCTION
Business Environment is sum or collection of all internal and external factors such as employees,
customers needs and expectations, supply and demand, management, clients, suppliers, owners,
activities by government, innovation in technology, social trends, market trends, economic
changes, etc. This topic covers questions such as Problems faced by Furniture Sector, PESTEL
analysis of IKEA, Positive impact on Business and Negative impact of Business and reflection to
understand what I went through for completing the report.
TASK 1
Problems faced by Furniture Sector
IKEA is facing many problems such as
Increasing Costs- IKEA is dealing in manufacturing of furniture goods. The whole industry is
suffering from the problem of inflation because of the factors responsible which affect the
company and they are inside and outside of it. This factor or aspect is concerned with cost of raw
materials and it is increasing day by day. Some companies have no option but to eat the cost and
some increase the prices of their products so that they can pass it to consumers and earn from
them. This method is a risky factor as competition in this industry is high and company can loose
their share from their competitors. People who have been in this industry for long have predicted
that if companies have to survive in this market with this competition then they have to eat their
own costs. (Calabrese, Iandolo, Caputo and Sarno, 2018.)
Fluctuating Customer Demand-
Due to the factors such as increase in cost of raw materials and products and increase in wage
rate of employees . It is getting difficult for IKEA to manage their operations at the time where
the demand is fluctuating. Market of IKEA and companies who are dealing in this industry
depends hugely on the housing trends from consumer. According to a study 37 per cent of people
has rented a place in the year 2016 which makes it the highest since 1965 which was the highest
before this. Deloitte conducted a research study in 2015 which stated that demand for single
person homes will rise in around the next 15 years because of the small households and small
families people now days prefer a small or medium apartment or flat. Company has to work and
set their productivity according to the markets as this industry solely depends on it. People are