Case Study: IKEA's SWOT Analysis and Business Growth

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Case study related to IKEA 1
Table of Contents
Introduction –.............................................................................................................................2
Q1...............................................................................................................................................2
SWOT Analysis –..................................................................................................................2
Q2...............................................................................................................................................4
Difference between internal and external factors –................................................................4
Q3...............................................................................................................................................5
IKEA has managed to minimise its treats in the following ways -........................................5
Q4...............................................................................................................................................7
How IKEA grew their business –...........................................................................................7
Q5...............................................................................................................................................8
SWOT Analysis of Wal-Mart –.............................................................................................8
About the company –.........................................................................................................8
SWOT analysis –................................................................................................................8
Conclusion –.............................................................................................................................10
References -..............................................................................................................................11

Case study related to IKEA 2
Introduction –
IKEA is a company related to home furnishings, which is founded by Ingvar Kamprad in
Sweden in 1943. Today it is the world’s largest retailer for home furnishing. Company has
grown continuously since it was founded. Company’s vision is to create a better everyone life
for the many people and their business idea is to designing the furniture at affordable price so
that many people will be able to acquire their products and also to achieve quality of products
through optimizing value chain system, building positive relationship with suppliers,
investing in that production which is highly automated and producing large sale volume
(About the IKEA Group, 2017). Furniture at IKEA is mostly flat- pack, ready to be
assembled by the customers, this allow a reduction in packaging and costs to the company.
Company have 9,500 products which include home furniture and accessories. These products
are available at all stores and customer can also order these products through online website
of the company (IKEA all products, 2019). These stores also include cafes and restaurants
which serve Swedish food. They have 355 stores in more than 29 countries and also have
more than 100,000 employees. Low prices of the products are one of the key strategies of the
company, which help in gaining competitive advantages and it also help to make the
customers to buy their products at affordable price. The company focuses on every lifestyle
of its customers, different age groups and types of households and always focus on the
environment and people, so it will help the company to make better utilization of energy as
well as raw material. So, this will help the company in reducing cost, positive impact on
environment and achieving their goals (History, 2019).
Q1.
SWOT Analysis –
SWOT analysis states as strengths, weakness, opportunities and treats analysis and it is a
framework which is used by the company for analysing and identifying the internal factor as
well as external factors which can have an effect on impact on the viability of a product,
project, place and person. SWOT analysis mainly used by business entities but it can also be
used by non- profit organization and by individuals for their personal assessment. This is a
part of strategic planning of the company and this analysis help the company in decision
making process because it enable the company to uncover success opportunities or knowing
the threats before they become big challenges or issues for a company (Ommani, 2011).

Case study related to IKEA 3
There are four elements of a SWOT analysis. These are:
1. Strengths – Strengths are those features or positive point of the company which allow
them to grow their business or to operate their business more effectively and
efficiently than their competitors. Strengths of the company add value to its products
and services (Helms, 2010).
IKEA have the following strengths:
 Strong global brand which attract large number of customers
 Same product quality and price worldwide
 They are offering functional and well- designed products at low prices, so that
all type of person can afford that price
 Equal balance between quality, function, design and price.
 Proper utilization of raw material and energy
2. Weakness – Weakness are those features or negative point of the company which
shows the competitive disadvantages. These negative points can stop a company from
performing at its higher or optimum level. Company needs to improve that negative
points.
IKEA have the following weakness:
 Difficult to control quality and standards
 Poor supply chain management, due to this lower level of customer’s
satisfaction
 Difficult to balancing between good quality products and low price
 Lack of communications with their customers and other stakeholders
3. Opportunities – Opportunities refer as favourable external factors which could help a
company in gaining competitive advantages. Favourable external factors such as
opportunities which exist in their environment and market which can be benefit for
their company, what are the customers’ perception towards their business,
opportunities which are created from any recent change or market growth and other
government policies or rules and regulation which can be benefit for the company.
IKEA have the following opportunities:
 Increasing or rapidly growing demand for the greener products
 Increasing demand for their products due to low price of products
 Increasing in the demand for lower carbon footprints and reduced water
usages