Challenges and Social Impact of IKEA

Business Project

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................4
Part 1:...............................................................................................................................................4
B: Challenges which IKEA tend to consider...............................................................................4
C. Consideration for creating the positive social impact.............................................................7
Part 2..............................................................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES................................................................................................................................1

INTRODUCTION
IKEA is a multinational company which designs and sells products that are related to
furniture, kitchen products, house hold accessories and many other goods related to home
services. Company was founded in Sweden 77 year ago and has become world’s largest
furniture selling retail brand. Company is known for its modern designs for all type of appliances
and furniture. IKEA’s products are simple and eco-friendly. Company offers best range of prices
for its products making it accessible for everyone. Furniture from IKEA is supposed to be
assembled by the customers as company believes that this process can reduce costs on a product
and shipping is easy, customers can even take this to their home while travelling from public
transport services (Ben-Shabat, and et.al., 2021). It is a single stop for all home services. It
provides catalogue and store outlets for making it easy for its customers to choose and pick
themselves from the warehouse. In today’s world, customers are demanding more and unique
approach to products, IKEA has strong ideas and offers customisation facilities to them that suits
local markets. The company does analysis of every possible issues and profitability before
venturing into some country. This is the first time where a retail furniture shop has its franchise
all over the world and has become a famous hit among people. IKEA’s target audience includes
young people and middle class families.
From mobile phones to home setting have all become smart working. IKEA has started
many smart home projects with wireless charging furniture and much other advancement in day
to day use home products (Laurin, and Fantazy, 2017). Company is focusing on expanding,
developing and collaborating in new ventures. After big a big brand, company has also faced
many challenges in its way to success, initially the company faced many environment related
problems by using many harmful materials like plastics. But now they are focusing in sustainable
development by creating product life cycle. Stores also recycle waste products and are helping to
run renewable energy. Company earning profits has also made many donations to social issues
and disasters. Company works on a work culture that is helping employees as well as the
organisation to achieve success and profits. The business model that IKEA follows has leaded
the company to come in the top in the furniture retail business (Ledin, and Machin, 2019).
Company has received many criticisms by negative media attentions and competitors. But it has
outgrown all and is still in lead.

MAIN BODY
Part 1:
B: Challenges which IKEA tend to consider
In the present time market completion has increased drastically and because of which IKEA
has to extend its working area to the overseas customers, through which company can make sure
that it is able to increase its customer base. Following are the challenges which IKEA tend to
analyse while providing its products to the customer at different geographic location.
International trading regulations- IKEA tend to provide its products to the customers at
different geographic locations and because of which company has to improvise its working as
per the international trade regulations (Laszlo, Cooperrider and Fry, 2020). This is important
because IKEA tend to provide its services in more than 570 countries, due to which organization
has to ensure that it is able to able to follow the legal laws of the specific country. It is important
because since each country is having different set of legal laws as per its cultural believes
because of which company has to improvise its working as per the specific set of rules of that
country. IKEA’s performance within the international market is also being affected, due to the
changing international politics.
Negative impact upon products due to trading through sea ways- The transportation of
products to the overseas market is often being done through the means like airways and seaways.
In which the seaways is highly cost efficient and because of which is also widely being used, due
to which IKEA also uses this way of transportation. But since company tend to provide wooden
products to the customers because of which has to implement different approaches, through
which negative impact upon the wooden furniture is being reduced (Kunc and Križan, 2018).
This increases company’s expenditures and also at the same time is an time consuming process
than compared to the airways because of which IKEA has to establish a proper working strategy
by which products are being transported on an scheduled bases by using forecasting of sales.
Negative impact due to pandemic- The COVID-19 pandemic has reduced the buying and
selling activities of the customers and due to which the organizational sales of IKEA is also
being affected. The negative impact of this can significantly can be seen in the stage in which the
governments all across the globe have introduced lockdown within their regions. Due to which
IKEA’s products sales was drastically being affected, therefore because of which IKEA has to