Competitor analysis Essay

IKEA is an internationally known home furnishing retailer. It has grown fast since it was founded in 1943. Today it is the domain of a functions largest furniture retailer, recognized for its Scandinavian style and the secondary belld high quality furniture items. Most of IKEAS furniture is flat-pack. This allows a reduction in make ups and packaging. IKEA has around 9500 products, including home furniture and accessories. The products are available in all IKEA stores and customers can order them as well online through IKEAS website. on that point are about 140 IKEA stores in the world in 30 different countries. IKEA stores include restaurants and cafs serving typical Swedish food. They also set out small food shops selling Swedish groceries, everything from the famous meatballs to jam.2. Analysis of current situationCurrent missionIKEAS mission is to offer a extensive range of home furnishing items of unspoiled design and function, excellent quality and durability, at prices so low that the majority of people can afford to buy them. They induce to attract customers who are looking for quality products at reasonable prices, but who are willing to assemble their furniture themselves and participate in a self-service culture. The typical target customers are young families with a low to middle low income. GoalsTheir recent goals is that all new stores will be built to a certified green building standard and sell more(prenominal) than organic goods. And to encourage their customers to travel with public transport to visit their store. They want to be more recognized as an eco-friendly business.StrategiesThe basis of IKEAS strategy is a mixture of innovate their own modular designs, mass produced components and a dedicated supplier meshwork all geared towards serving price conscious customers while still maintaining ato high standard of goods and workmanship. They design their own furniture and its a self-service, that is a big part of their strategy. T hey also yield a lot of facilities to offer. For instance they offer paper and pencils, computers so you can look certain things up, they develop a playground for children and a restaurant with delicious and payable food. Since IKEA was founded it always had concern for people and the environment. The IKEA spate is to reach a better everyday animation for galore(postnominal) people. IKEAS concern for people and the environment encourages it to make better use of both raw materials and energy. This keeps costs down and helps the company to happen upon its green targets and have an overall positive impact on the environment.43. Internal environment- stancesStrengths could include a companys specialist merchandise expertise or its location. They are any aspect of the business that adds value to its product or service. IKEAS strengths include Its a worldwide snitch which attracts a lot of consumer groups, they also offer the same quality and range in their stores. its vision to create a better everyday life for many people A strong concept based on offering a wide range of well designed, functional product at low prices. A positive Human Resource Management approach towards its stave, which leads to a positive attitude among the staff and increased performance for the company. This makes the staff happy with their jobs. The staff has an equal treatment, no matter which background they have. This makes them adapt to the consumers in different countries en within different cultures. They adapt quickly to change.They use the latest technology such as IKEA IT (information technology), this provides IKEA with all its system requirements such as common business solutions, architecture, infrastructure, service and support. Such as KPI (Key performance indicators) it helps IKEA to measure the progress of its vision and long-term goals by setting targets and monitoring progress towards it. Environmentally friendly insurance policy.Volume commitments IKEA believe s in creating long-term partnerships with its suppliers in order to achieve this. By committing to get large volumes over a number of years IKEA can negotiate lower prices. This also benefits the suppliers because they enjoy the greater security of having guaranteed orders. Economies of scale for instance, bulk buying at cheaper unit costs. Good marketing.WeaknessesIKEA has to acknowledge its weaknesses in order to improve and manage them. This can play a key role in circumstances it to set objectives and develop new strategies. The size and scale of its world wide business. This could makes it difficult to control all the stores, the staff and the standards. The need for low cost products. This necessarily to be balanced against producing good quality. That is hard to do, sometimes they do have low quality. IKEA also needs to be different from competitors. IKEA needs to keep good communication with its consumers and other stakeholders about its environmental activities. The scal e of the business makes this a difficult task.54. impertinent environment OpportunitiesA business uses its strengths to take gain of the opportunities. a growing demand for greener productsa growing demand for low priced products.Low economy makes low priced furniture even more appealing.demand for reduce water usage and lower carbon footprints little terrors Porters 5 forces model6 menace of buyers growing bargaining power there is a little power because of the existing low price options. IKEA ensure that their customers in all aspects will be satisfied for qualityservice they provide pore their marketing approach on demands and needs of the buyer. IKEA uses their corporate responsibility as a good public image to their customers. IKEA family card as a membership.Threat of suppliers growing bargaining power Because of the low-pricing, IKEAs profit margin also affects the prices in raw materials than by prices in labour. IKEA has a wide network of 1300 suppliers. They gu ardedly select the manufacturer of its products. The company has own production factories and designers which makes it less dependent on others. Bargaining power of supplier could be threat for the profit of the company.Threat of substitute products or services There is no specific product that can be a substitute for the furniture but IKEA at least, have to keep up with the latest trends, to avoid becoming out of style. Problems faced due to distribution channels.Rivalry among existing firms The IKEAs furniture competitors offers different styles and functionality IKEA is the intimately successful in delivering the complete package for the customers that reflect in weak rivalries. There will always be substitutes for furnitures but IKEA competes with price and there isnt competitors in the same price range. Threat of new Entrants IKEA stores do not reach many small towns and this is an opportunity for the new competitors to sustain into small and midsize cities with smaller s tores and less selection. But not easier in city because new entrants have to establish a vast supply chain and create an unique trade name name. The furniture market is already highly competitive, the risk of new entrants is not extremely high.75. Conclusion.IKEA is a well-known global brand with hundreds of stores across the world.In order to improve performance, it moldiness assess its external and competitive environment. This will reveal the key opportunities it can take advantage of and the threats it must deal with. IKEA responds to both internal and external issues in a proactive and dynamic manner by using its strengths and reducing its weaknesses. Through this, IKEA is able to chip in the strong growth it needs to retain a strong identity in the market.6. SWOT-analysisInternal EnvironmentSWOT AnalysisExternal EnvironmentStrengthOpportunitiesAdapt quicklyWorldwide brand Low price high quality Positive Human Resource Management Environmentally friendly policy Good market ing A growing demand for greener products A growing demand for low priced products.Low economy makes low priced furniture even more appealing. Demand for reduced water usage and lower carbon footprints WeaknessesThreats Low communication of environmental activities The size of their worldwide business The need for low cost products The IKEAs furniture competitors New trends IKEA family card Bargaining power of supplier8ForewordThis assessment is about the company IKEA. I will contend several issues including an introduction of the company, an analysis of the current situation within the internal (Strengths and Weaknesses) and external environment (Opportunities and threats) . The treats are described in Porters 5 forces model. The answers of my research can be found in the conclusion and SWOT analysis.3IndexPage numbers1. Introduction42. Analysis of current situation43. Internal environment54. External Environment6,75. Conclusion86. Swot-Analyses87. Bibliography927. BibliographyCo ntinuing Case by Alan Hogarth http//businesscasestudies.co.uk/swot-analysis-and-sustainable-business-planning/swot-analysis.htmlaxzz2eJ2NvcnR http//www.slideshare.net/FenellaAndrade/ikea-9167089 http//www.strategicmanagementinsight.com/swot-analyses/swot-analysis.html http//research-methodology.net/porters-five-forces-analysis/9IKEA