Business Analysis: IKEA's Internal & External Factors Presentation

This presentation provides a comprehensive business analysis of IKEA, examining both internal and external factors that influence its operations. The analysis begins with an introduction to the business environment and the importance of understanding these factors. It then delves into the internal factors, including labor, finance, and technology, using a SWOT analysis to assess IKEA's strengths, weaknesses, opportunities, and threats. The presentation highlights IKEA's cost reduction strategies and innovative approaches, while also acknowledging the low quality of some products. Furthermore, it explores opportunities such as expansion into the grocery market and the growth of online sales. The threats, including competition from low-cost operators, are also discussed. The presentation extends to external factors, emphasizing political, economic, social, technological, environmental, and legal (PESTLE) analyses, with a focus on the impact of political issues and supply chain disruptions. In conclusion, the presentation underscores the necessity for businesses to consider both internal and external factors for effective strategic planning and decision-making. The presentation includes references to relevant academic sources.

Group PPT IKEA

Content
• Introduction
• Impact of Internal factors on Ikea
• Analysis of the internal factors
• Impact of External factors on Ikea
• Analysis of the internal factors
• Conclusion
• References

Introduction
Business environment consist of various
external and internal factors that has
influence on the business. For the businesses
it is important to analyse various internal
and external factors so that various
opportunities and threats that are prevailing
in the market can be analysed.

Impact of Internal factors on the business
The three important internal factors that have influence on the
operation of the IKEA are:
• Labour
• Finance
• Technology

Analysis of the internal factors
Internal factors of the business can be analysed
with the help of SWOT analysis. It is a
matrix which can be used for analysing the
company and the environment. With this the
strengths and weaknesses of the business
along with various opportunities and threats
can be determined.

Analysis of strengths
Constant cost reduction through innovation: For providing the low
cost product to the customers the IKEA determine various
innovative ways. Such innovation includes new material that are
more sustainable and are comparatively less costly. Also they
focusses upon new ways of packing the products, transporting
material etc.

Analysis of Weaknesses
Low Quality of products and services: IKEA focusses upon
reduction in cost of the products due to which the quality of the
products reduces which gradually reduces the satisfaction level of
the employees. Because of this the customers return the product so
purchase and it adversely affect the image of the company.

Analysis of Opportunities
Expansion to growing grocery market: In developed countries the
demand of the grocery products is increasing due to which IKEA
has an opportunity to expand their grocery business.
Growing online sales: Due to adoption of various online platforms,
online sales has increased as most of the customers visit to the
website of the company to making purchases.

Analysis of Threats
Threats need to be analysed by the business as they facilitate them with
identification of various emerging competitors, changing regulatory
requirements etc. Various threats for IKEA includes:
Excessive Competition: Many low cost operators such as Walmart,
ASDA, Tesco gives stiff competition to IKEA. Due to this the
market share of IKEA can be reduced.

Analysis of the external factors
External analysis facilitate examination of
various factors of the industry. Such
factors includes competitive structure,
dynamics, competitive position etc. For
IKEA it is important to analyse various
macro factors such as political, economic,
social, technological, legal and
environmental factors.

PESTLE analysis
Political Analysis
IKEA has always involved in the various political issues such as
supply chain disruption due to the operations of IKEA got affected.
The consistently changing policies of the government bring adverse
impact on the operations of the company.

Conclusion
It is concluded from the above presentation that the businesses need to
consider various factors that has direct or indirect influence on their
operations. Such factors includes various internal and external
factors that can be analysed with the help of SWOT analysis and
PESTLE analysis respectively.