SWOT and PESTLE Analysis of IKEA: Business Context and Leadership Style

CONTEXT OF
BUSINESS

Table of Contents
INTRODUCTION :.........................................................................................................................3
1.1 perform the swot analysis of IKEA:......................................................................................3
1.2 perform the pestle analysis of IKEA:....................................................................................5
1.3 Evaluate how the changes in PESTEL factors has influenced the Opportunities and
Threats business. Critically comment on how the business is addressing their Strengths to
negate Threats and Weakness affecting their Opportunities.......................................................7
1.4 Recommend a suitable leadership style from Daniel Goleman’s leadership styles which
will help them meet their business objectives with focus on changes in the business
environment: ..............................................................................................................................8
1.5 Critically comment on their Corporate Social Responsibilities in the processes:................9
CONCLUSION:.............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION :
Business can be defined as the activity which helps in making an individual's living as well as
help them in making money in the process which includes the process of producing or buying
and selling of the goods and services which basically have the motive of profit making. On the
other hand, business context can be defined as the concept in which there is a very specialised
vocabulary which is being employed. The business context can be an individual organisation or
any big business community or maybe a particular project with an initiative as well. The business
context analysis however is the method which helps in analysing the business surroundings and
the business environment under which the business or the organisation actually operates. for this
respective report however, IKEA has been taken into consideration which is a Swedish founded
company with the headquarter in the Delft, Netherlands (Aman and et.al., 2022). It basically
deals in the ready to assemble furniture, kitchen appliances, furniture and other goods and home
services as well. IKEA is the world's largest furniture retailing company since the year of 2008.
TASK 1:
1.1 perform the swot analysis of IKEA:
Strengths of IKEA:
 CUSTOMER KNOWLEDGE: one of the main strengths for the IKEA company has to
its extensive customer knowledge. The company knows and analyse the purchasing
factors that basically influence all the customers to purchase the goods and products and
also apply the best activity to induce those decision making. IKEA basically offers to the
public a wide range and variety of products. The designers of the IKEA company
continuously work for introducing the new designs for the products which will look
attractive top all the customers ad make the buy it in that particular period of time (Diab,
2022) .
 SUPLY CHAIN INTEGRATION: IKEA company basically is committed to have those
long lasting relationships with all of its suppliers. From this healthy relations, the
company has any advantages which includes the large volume of bulk orders and get the
advantage of low prices than before. IKEA also sources its all the materials to all the
close suppliers which helps in reducing the transportation cost for the company as well.

The IKEA company also uses the approach of IWAY which basically helps in
approaching all the close suppliers within the supply chains as well (Welch and et.al.,
2022).
Weaknesses of IKEA:
 LOW QUANTITY OF THE GOODS AND SERVICES: OKEA is basically a
company which can not find a solution to have a compromise between the continuous
cost reductions and at the same time also maintain the same quality which they are
providing to it customers for the goods. According to the data, it can be said that the
customer's of IKEA are very much less satisfied by all the predicts and services they
offer. The reason being that the quality of the goods and services they produce is only
average as compared to the other stores in UK (Dimitrova and Öhman, 2022). The cost of
the company is being reduced which hence results in the larding to the reduction in the
products quality as well which is being again followed by the increased number of the
goods which are also being returned and the brand name is also being damaged.
 STANDARD PRODUCTS: The main competitive advantage for the IKEA company is
that it derives from the low costs, that are also considered as the part of the standardize
products which are also being achieved. The standardization of the products however also
attracts very low number of the customer segments. And hence, the inability of the
business organisation which are ready to offer the best quality products with the more
customized at the same time which also allows its competitors to complete the place and
fortify instead of their position as well.
Opportunities for IKEA:
 FURTHER EXPANSION IN OTHER DEVELOPING COUNTRIES: The markets
of retailing produce are being increased by at least 5 percent on the average rising
markets in the previous year. Therefore, there is a very big opportunity for the IKEA
company to increase its net revenue growth as well. The IKEA company however
operates on many of the developed countries but does not completely got set up in many
of the still developing countries (Dwivedi and et.al., 2022). With the expansion globally
in counties like Mexico, Brazil, Indonesia, there is a very great and big opportunity for