Ikea Swot Analysis

SWOT ANALYSIS

SWOT analysis is a strategic tool that helps corporations to identify their strengths, weaknesses, opportunities and threats. Since the firm ultimately controls its strength and weaknesses, this analytical tool helps firms improve their competitive advantage. Opportunities and threats reside in the external environment. However through transforming weaknesses into strengths, a firm can deflate threats and grasp opportunities. Presented below is the SWOT Analysis of IKEA.

STRENGTHS:

* The key strength of IKEA is the application of strategic practices such as optimizing materials to reduce material costs , development of manufacturing plants to optimize use of recycled material. In addition the corporation uses innovative technologies such as catalogue, i-phone apps to facilitate consumer experience (Mintel Oxygen ,2010).

* IKEA is also considered as the leading specialist in the retail furniture manufacturing industry with its strong brand image. The strong global brand targeting key consumer groups, offers uniformity in quality and product range across the globe, The right approach to strike off balance between quality, design, functionality and cost, gives IKEA cost and competitive advantage in the highly competitive market.

WEAKNESSES:

* Highly competitive market brings IKEA weaknesses such as multitude of the global business that is or isn’t capable of managing stakeholders, product differentiation, suppliers’ issues of not abiding by IKEA group code (IWAY code) in the limelight. Other weaknesses of IKEA that is, ineffective communication and information exchange with its consumers n stakeholders due to huge scale of business operations are also identified (Johansson et al., 2008)

* Specific to the UK market, perhaps these weaknesses are resulting in providing competitive advantage to Argos as it beats IKEA in terms of most visited furniture retailer (Mintel Oxygen, 2010)

* Another competitor of IKEA, DFS, also beats IKEA in terms of...