Analysis of IKEA's Business Operations: SWOT and PESTLE Report

This report provides a comprehensive analysis of IKEA's business operations, utilizing both SWOT and PESTLE frameworks. The SWOT analysis examines IKEA's internal strengths, such as its wide product variety, high-quality standards, strong brand value, and substantial resources, alongside weaknesses like intense competition and rising raw material costs. It also identifies opportunities for expansion and technological advancements, while acknowledging threats from competitors, online business, and potential production issues. The PESTLE analysis delves into the macro-environmental factors, including economic and technological influences, and their impact on IKEA's business decisions and profitability. The report concludes by summarizing the key strategies IKEA employs to maintain its position in the industry, supported by references to relevant academic sources. This analysis is valuable for students studying business, marketing, and strategic management.

IKEA

INTRODUCTION
 IKEA is one of the biggest Swedish founded European multinational retail company
operated in 433 stores worldwide offering customers wide range of products and
services varying from furniture, home decor products and kitchen fitting applications.
This report explains internal and external business environment factors and the effects
on company operational structure business decisions..

SWOT ANALYSIS
 Swot analysis refers to framework which enables business managers to analyze the
internal factors of company constituting the strengths, weaknesses, opportunities and
threats. The micro environment of company direct leaders to makes strategies for
minimizing the threats and weaknesses arising due to competitive business trade and
high entrants of new brands.

Cont.
 Strengths:
 Large variety of products and services among all stores
 High quality standards and strong customers satisfaction services
 High goodwill among consumers worldwide
 Strong brand value on global platform
 Huge capital and human resources deployed in all stores

CONT.
 Weaknesses:
Large competition due to entrants of new brands on
global scale
 Increasing cost of raw materials along with high
demand of suppliers
 Opportunities:
 Expansion into new sectors of business trade for
reaching new segments of customers
 Advanced technology usage in production will keep
cost efficiency standards.

Threats:
 High competition from new brands entry on world level
 Low promotion activities on online business platforms
 Low quality standards of goods produced due to less innovative technology
 Less online portals and websites available for people who love online shopping
 Decreased sales revenues in recent years due to low output levels, diminishing
production standards

PESTLE ANALYSIS
 Pestle analysis refers to macro
environment analysis where the
external environment factors such
as political factors, economic
environment, social environment
technological environment and
environmental factors are
evaluated. Business managers have
the responsibility to analyze these
factors for establishing firm place
in the industry as the external
factors are highly important for
long term profitability and
attracting new segments of
customers for expansion of
business scale in market share

Economic factors
 Economic factors such as
changing tax rates of countries
and disposable incomes of
customers has impacted IKEA
business operations structure
largely. The changing
economic rates and the taxes
has affected company
expansion descions due to
which it is unable to work
efficiently and reach customers
satisfaction levels.

Technology factors
 Technology factors are external factors
of macro environment which affects the
profitability of company on various
parameters which can be analysed by
the output machines are able to produce
with cost effectiveness. There is high
competition among new brands I retail
industry where usage id advanced
technology and production is vital for
reaching the set benchmarks.

CONCLUSION
 This file can be concluded with explanation of internal and external factors affecting
the business operation of IKEA and what are the key strategies management has taken
to establish firm position in industry

References
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Mobile-Assisted Foreign Language Learning: A Mixed-Methods and SWOT Analysis of the
TELL-OP Training Module for Language Professionals. In Recent Tools for Computer-and
Mobile-Assisted Foreign Language Learning (pp. 289-306). IGI Global.
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industry within the ASEAN economic community. In Proceedings of the 28th IBIMA conference
on Vision.
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