Challenges Faced by IKEA in Growing as a Multinational Company

Nhs or BP

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
The Company...................................................................................................................................3
Profile..........................................................................................................................................3
Management Approach................................................................................................................6
The Business Challenge...................................................................................................................7
Description of challenge..............................................................................................................7
Impact of challenge on IKEA......................................................................................................7
RECOMENDATIONS....................................................................................................................8
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10
IKEA, 2021. [ONLINE]. Available through :< https://www.ikea.com/in/en/this-is-ikea/>..........10

INTRODUCTION
IKEA is a multinational company which designs and sells furniture, kitchen appliances and
many other home accessories. The products from IKEA are read to assemble. It is the largest
company in furniture retailing industry. The company has earned many loyalty points from the
customer’s side as the performance of this company is outstanding. IKEA is a Sweden based
company set up in the year 1943 (Lee, and et.al., 2019). It has its operations in many countries
with more than 300 stores running in different parts of the world. IKEA launches wide range of
new products every year with the help of their in house designers and some external designers
through their contracts.
Moreover, the pricing strategy of IKEA to provide its customers with products having best
and affordable prices has lead to the major growth of the company. The company carries out
their production very thoughtfully and is moving on by taking new projects. Having low
production costs in IKEA made the company offer high quality products at low costs. After all
the company still has to face many blockages in their success and some challenges which lead
the company go through a rough patch. This report deals with the challenges IKEA has to face
while growing as a whole. There is detailed discussion on the profile of IKEA along with the
impact of these challenges o the company.
The Company
Profile
IKEA is a multinational conglomerate which deals in designing and selling ready to
assemble furniture, accessories used in homes and the appliances used in the kitchen along with
other useful goods and accessories used at homes. It is headquartered in Sweden. The company
is considered as the world’s largest furniture retailer from 2008. The company is well known for
its modern designs for various types of furniture and appliances and the interior design work
along with its eco-friendly simplicity. The company was founded on 28 July 1943 by Ingvar
Kamprad but due to the rapid success, there are more than 440 stores till 2021 in more than 50
countries. The revenue of the company is more than €41.3 billion which is because of its
strategies of marketing as well as its talented employees working for the company (IKEA, 2021).
The company facilitates millions of customers worldwide through its well designed products and
services which are available for every room in home. The company also focuses on the
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sustainability, safety and forestry along with good home furnishing which is together referred as
Democratic Design.
SWOT
SWOT analysis focuses on the strengths, weaknesses, opportunities and threats of the
company. IKEA strives much hard to enhance its strengths by making use of the opportunities
and to reduce its weaknesses by minimizing the threats. This is how, SWOT analysis model can
be used to enhance the growth of the company.
Strengths
The company provides same and good quality products worldwide. IKEA offers broad
range of functional and well designed products at very affordable prices. The major strength of
the company is that it uses renewable materials. Also, the company believes in having good and
long term partnerships with suppliers. IKEA also uses new technologies in products like IKEA’s
OGLA chair (Wu, 2020).
Weaknesses
The scale and size of products is very challenging for standardising the products. This led
to weak relationship in the supply chain of IKEA which affects the products of IKEA. The major
weakness is to keep the balance between dealing with the good quality products which are to be
sold at lower prices.
Opportunities
Focusing more on sustainability can provide various opportunities to the company as the
demand is increasing for the reduced water usage and lower carbon footprints. This can be done
by UNICEF, World Wildlife Fund and Save the Children.
Threats
The competitors are the biggest threats of the company which include Amazon,
Pepperfry, Walmart, Wayfair, Target etc. Also the recession turn down consumer spending
which led to reduction in disposable income.
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