Korea and China

IKEA uses its strength to take advantages of the opportunities that arise. The business gets to response quickly to the changes of environment on both a broad and narrow scale. There are four opportunities for IKEA. First of all, the growing demands for greener products. The new global pursuit of green growth is an opportunity for the IKEA. Growth of greener products will increase the sales of IKEA as it is always practicing environmental activities. Asian economies such as Korea and China are future large market for IKEA as they are looking at cutting environmental impact.

The demand for reduced water usage and lower carbon footprints are another trend that promoting IKEA’s environmentally activities. Then, there is a growing demand for low priced products. The current financial climate may result in consumers trading down from more expensive stores. IKEA as a store selling low cost products will gains advantage from the trends. Consumers will reduce their expenditure by purchasing less expensive products. Thus, IKEA may target larger range of customers during this period.

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Besides that, the moving from International to global status. IKEA is moving from international to global status through the development of Asia and Eastern European models as the result of globalization. The large proportion of middle class consumers in Asia country represents the target customers for IKEA. Following the raise in demand of better living standard in Asia has opened a large market for IKEA’s business. Last but not least, E-commerce. E-commerce represent another opportunities for IKEA following e-commerce as the new trends in business market.

Internet penetration in regions such as North America, Australia, and Europe, has made World Wide Web an important medium for e-commerce transactions. IKEA is now possible to reach the target customer anywhere in the world with the help of IKEA’s ecommerce website. Lastly, threats are the final part in this analysis. Threats are an external factor that will affects IKEA. If IKEA is aware of these possible external threats, it can be able to encounter them. Threats to IKEA are as follows.

The first one is the social trends. The slowdown in first time buyers who entering the housing market is one of the social trends referred to. This phenomenon occurred due to the buyers are lack of awareness and information about the unique of IKEA products. This is a core market segment for IKEA products. IKEA needs more newly customers to enter the market in order to stimulate its sales. With the growth of percentage customer, IKEA may able to expand their market share as well. The second one is the market forces.

One of the reasons that IKEA has grown rapidly is the way of its furniture’s packing – flat-packed, that ready to be assembled by the customers which will allows a reduction in costs and packing In order to gain the advantages from it, more competitors are entering the low price household and furnishings markets. The competitors are imitating the strategy of low cost value flat packed furniture which will impact on the buoyancy of IKEA. Therefore, IKEA is facing the threat of the entry of the new competitors in this field which may also affect its sales.

Last but not least, the economic factors. Economic factors are normally referred to the hit of the recession. A recession is a general slowdown of economic activity. During the recession, it will reduce the consumer’s spending power because the incremental of their income have reduced. In conclusion, there is no doubt that IKEA is an internationally known home furnishing retailer. IKEA has conducted a SWOT analysis in its business operation. A SWOT analysis allows the company to assess and evaluate its business operation from both internal and external point of view.

The company will then examine each strengths, weaknesses, opportunities and threats deeply in order to improve their business performance. The first part of the SWOT analysis covers the strengths of IKEA. Those five strengths clearly shown that the reason of succeed for IKEA. Another part covers the weaknesses. This part allows IKEA more in depth to know the weakness of its internal company. The next one is the opportunities. This part successfully identified that the opportunities that IKEA hold which may help to expand their market.

Threats are last part which covered in this SWOT analysis. With thoroughly knowing the threats that IKEA faced on, it may not only able to minimize it, but also may help to avoid it to take place. In short, IKEA may take the advantage of strengths and opportunities to develop the strategy which may help to expand the market. However, IKEA may also through the analysis to minimize the weaknesses and reduce the threats that they facing on. Through this, IKEA may then be able to generate the strong growth and up hold a strong identity in the market.

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