Business Scenario of Ikea

Business scenario of IKEA, largest furniture retailer

Q1. What is the business scenario of IKEA?

The company, founded in 1943, is the largest furniture retailer in the international setting. It offers a set of fashionable and affordable furniture that generally possess Scandinavian designs. Ikea’s expansion in the international market is through franchising. The company operates its franchising approach by looking for untapped market and consequently penetrating it either by joint ventures or by creating a direct subsidiary in that market. Though the head office provide certain restrictions in the operations particularly with the respective requirements for the products of the subsidiary, the franchise have some level of autonomy with regards to designing the products to fit with the taste of the market.

Q2. What is the market situation of IKEA from SWOT perspective?

Strengths

The company has a strong brand recall which appeals to the certain demographics. Moreover, the company does not have a direct competitor as it has a very distinct manner of doing business. In the same manner, the company is the primary provider of innovative and stylish designed functional products. It has ingrained in popular culture as synonymous to such items of furniture.

Weaknesses

The good thing about being an international brand is the ability of the consumers to relate it to quality. However, the case of Ikea is different as it ironically depends highly on the Western markets. It has yet to take on the challenge of Asia. Moreover, the low prices as well as the kits provided by Ikea appear to compromise the consumer relationship management of the company. Since the products are built by the customers by themselves in the comfort of their home, store employees appear to neglect the company’s goal of complete service.

Opportunities

The internet has great potential for the company. It could engage on e-commerce and cater to all types of demographics who like their products....