IKEA SWOT ANALYSIS

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Table of Contents
Table of Contents .. 2
Introduction ... 3 - 4
Strengths 5 - 9
Weaknesses 10 - 13
Opportunities 14 16
Threats .. 17 20
Recommendation .. 21 - 24
Works Cited .. 25 - 27















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Introduction

In 1926 in the country of Sweden Ingvar Kamprad was born and so was IKEA.
When Ingvar was five years old he started selling matches to his neighbors. When he was
seven he branched out his selling to more people using his bicycle. Ingvar then built off
of the matches and started selling more things like greeting cards, flower seeds,
Christmas decorations, and eventually pencils and ball-point pens. When he was
seventeen he used the money his dad gave him, for succeeding in his studies, to establish
his own business named IKEA. The name IKEA is formed from the founder's initials
(I.K.) plus the first letters of Elmtaryd (E) and Agunnaryd (A), the farm and village
where he grew up. IKEA started out only selling a very limited amount of products like
pens, wallets, picture frames, table runners, watches, jewelry, and nylon stockings.
In 1948 IKEAs plan developed even more by introducing the furniture
department of the store. The first IKEA store opened in Sweden in 1958. This store has
6,700 square meters of home furnishings. In 1959, they added the 100
th
co-worker to the
IKEA business. They opened the first IKEA restaurant in the Sweden store in 1960. In
1985, IKEA opened its first store in the United States in Philadelphia. The IKEA website,
www.IKEA.com, was launched in 1997. The childrens IKEA was also launched in 1997.
The food department of IKEA started in 2006. IKEAs headquarters is located in the
Netherlands.
IKEA is a very large company that targets customers who are buying new homes
or a place to live. Their primary products are home appliances and furniture and their
services are restaurants, hotels, and operating houses and flats. IKEA has a very clear
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vision; At IKEA our vision is to create a better everyday life for the many people. Our
business idea supports this vision by offering a wide range of well-designed, functional
home furnishing products at prices so low that as many people as possible will be able to
afford them.
As a group the strengths, weaknesses, opportunities, and threats were found by
doing some research. The groups each did research on the category they were assigned
and found eight things that fit in the category. All the strengths, weaknesses,
opportunities, and threats were found online. The most common website that was used
was the actual IKEA website, but there was also other websites used as well.














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Strengths
IKEA has a large number of strengths that play a key role in IKEAs outstanding
success. One of IKEAs many strengths is that it has a very strong global brand.
According to IKEA, they have 298 stores in more than 26 different countries making
them a very strong company internationally. They are the largest furniture store
worldwide and just to put things into perspective; IKEA had over 690 million visitors in
the last year. IKEAs main strength is that it appeals to customers worldwide with the
same quality at remotely the same price. Even though IKEA began in Sweden, they have
become a large company that many customers shop at no matter where they are in the
world. They offer high quality products for a very reasonable price that can be shipped or
picked up anywhere at any store (Welcome Company). Due to IKEAs stores being
worldwide, it makes it easier for customers to buy, pickup or ship items to their homes.
Another one of IKEAs strengths that put them above their competitors is their
diversified product portfolio. This means that IKEA has a wide range of products and
services that they can offer their customers. Many people think of IKEA only as a
furniture store. In addition to the large furniture factory and store that they operate, IKEA
is involved in other business opportunities. Despite their massive popularity as a furniture
retailer, IKEA runs restaurants as well as operating houses and flats (SWOT Analysis of
IKEA). Just recently, IKEA has paired with Marriot International to open up a chain of
3 star hotels (IKEAHotels). They are planning the construction of 150 of these hotels
that will be named Moxy Hotels. While IKEAs competitors are only invested in the
furniture business, it is easy for IKEA to stay ahead of the game. Even with another
market crash or a drop in furniture purchases across the world, they will have separate
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investments and projects like the restaurants and the soon to be hotels to keep the
company running smoothly while their competitors fall. The diversity of IKEAs business
makes them one of the most successful companies in the world. They spread their
business and resources into more than just the production and selling of the furniture to
continue to be not only a profitable company but also a respected one.
IKEA is able to create a global network by marketing the same quality products
all over the world. They make and market products that are functional, well made and
designed, but priced low. One way they keep the price down is by sending the customer a
flat box with as few parts as possible to construct the pieces themselves. By having the
customer build their piece of furniture themselves, they cut down on labor costs
(SWOT planning). To go along with this idea, the company has put How to Build
videos on YouTube. This helps ensure that the customer has confidence that they can
build the product on their own (Felix, Jorge). IKEA does a wonderful job marketing to its
potential customers from all over the world. They have stores all over the country and
they intentionally place the blue and yellow buildings off of major highways so that
people can see their bright buildings as they drive by. They also place their stores away
from major competitors to ensure that their store is the ideal choice for possible
customers. IKEA lays their store out so that customers walk through all of their
beautifully designed show rooms before they actually pick up any of the pieces they want
to purchase (Felix, Jorge). By doing this, their customers see all of their products and
may even purchase items that they were not initially thinking about purchasing. Another
way IKEA lures customers into their store is by their catalogs whether the paper copy or
online. It shows what kinds of products they have and it shows customers that IKEA
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would be a store that they would like to shop in. This also gives their customers the
option to purchase items without having to be in the store.
By giving out information about their company IKEA keeps their customers
knowledgeable. Information can be accessed on their website whether it is information
about specific products, customer service needs, sales, store openings, future plans on
being green etc. (News Room). They also have the basic information on the
development of their business and how they choose to run their business on their website.
They even provide the information about store locations, how many stores there are, how
many new locations opened in the past year, the number of suppliers, co-workers and
how many products there are and how much revenue they earned from 2008 to 2012
(Welcome company). By making all of this information available to their customers,
their customers can trust in the company that they are buying from. This creates lasting
relationships with the company and their customers.
A popular Business Blogger, Robert Malone, recently quoted in a blog about
IKEA Theres no room for wasted space in product packaging. By this he means the
logistics and shipping methods behind a companys product has a major impact on the
consumer (Malone). IKEAs logistics team does an outstanding job making all products
readily available, while ensuring they are in perfect condition. But most importantly, their
success by mastering logistics helps keep consumer prices low. IKEAs logistics
department has become proficient at moving goods as quickly and efficiently as possible
("Logistics"). By shipping only flat stackable packages transportation costs are
minimized. Receiving products directly from the supplier eliminates the middle man
and, again, helps minimize cost. Handling thousands of products each day is not easy,
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which is why about 20-25% of IKEA store workers are focused in the logistics work area.
These IKEA employees are involved in all aspects of the supply chain, from the supplier
to the customer ("Business Types"). These employees exhibit great team spirit,
willingness to learn, and professionalism needed to achieve complete control of the
companys space and volume of goods transported to help continued sales. IKEAs goal
to perform at both national and international levels helps provide accurate logistics
management, stock control, and receiving and replenishing processes. When developing
logistics strategies, IKEA keeps our environment in mind ("Logistics"). Whether
transporting by train, boat, or truck, flat packages means more items in one trip to help
reduce the number of trucks on the road. As a result, CO2 emissions are kept to a
minimum (Malone).
Not only do IKEAs transportation methods help strive for a green world, but
many of the products they produce are continuously becoming more efficient ("IKEA
Group Sustainability Report FY12"). For example, today IKEA dishwashers are 2251%
more efficient compared to the 2008 products. IKEA has a goal of converting all of their
lighting products to LED by 2016. This is part of the reason why 83% of IKEA workers
say they are proud of IKEAs efforts to become more sustainable ("Business Types"). Of
all products IKEA offers their consumers, 91% are made from recycled or renewable
materials. Within the last year IKEA has reduced their buildings CO2 emissions by 17%
and improved in store energy efficiency by 3%. IKEA also plans to help customers
become more sustainable at home by increasing sales on efficient products by 2020,
while keeping prices low ("IKEA Group Sustainability Report FY12"). With combined
efforts from IKEA stores, warehouses, manufactures, and consumers, IKEA is doing their
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part in preserve our planet Earth.














10
Weaknesses
Over the last 70 years IKEA has developed itself into the worlds premier
furniture retailer. IKEA is a company that prides itself on its mastery of logistics, and
ability to keep prices low. These are undoubtedly two of the companys greatest
strengths, however in this particular case, IKEAs greatest strengths also may become its
greatest weaknesses.
Because IKEA is such an efficient company in every facet of its business, IKEA
is able to offer some of the cheapest furniture options on the market to its customers.
This seems like a great scenario, as low prices generally look attractive to potential
customers, however it can not be forgotten that buyers tend to attach the label of, poor
quality, to cheap prices even if this is not the case. In this regard, IKEAs logistics
department almost does too good of a job in cutting out costs in order to keep prices low
as they sometimes drive customers to look for pricier, higher quality, items even if this
is not actually the case. Therefore, the problem is not the actual quality of the IKEA
brand; it is the perception of the quality of the IKEA brand (Kaferle, Businessweek).
Another strong suit of IKEAs is the concept of the flat pack, although just as
before, IKEAs biggest strengths are often its greatest weaknesses. The flat pack allows
for the cheapest manufacturing possible as it relies on the customer to assemble finished
products, and allows prices to stay very cheap which is great. The problem however lies
with the initiative of the customer. Many customers simply do not want to take the time
to assemble furniture themselves. Many will see it as too much of a burden, or simply do
not have the means to self-assemble. This can be a damaging factor to a target market as
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it shrinks the demographic from which IKEA can market. Furthermore, the concept of,
do it yourself, coupled with low prices once again creates the perception of a cheap
product, and no one wants to buy furniture that they think is poor quality.
Another weakness that IKEA creates for itself is location. The company builds
gigantic superstores filled with food, entertainment, and much more than just furniture in
an attempt to make the place more desirable to visit. The problem is that there are very
few IKEAs throughout the United States: Only 38 stores to be exact (IKEA-US). With
such few stores, IKEA isnt able to sell to as many people as it may be able to otherwise.
Due to the lack of stores, customers are forced to drive two or three hours just to visit
IKEA with the possibility of not buying a single thing once they get there. The stores are
inviting and fun to be in but many consumers dont feel like its worth the hour-plus drive
visit a store. With more and more companies going online it is likely that a lot of
customers would rather order furniture on the Internet instead of traveling hours to visit
an IKEA. Alternately, the consumers may just go to a local furniture store and save
themselves from wasting hours of driving and money on gas.
Furthermore, the stores are placed in unconventional places. IKEAs arent
located in large cities or around competitors; they are located off highways, away from
everything. With IKEA being located away from other competitors they arent able to
draw customers away from the competition, so IKEA runs the risk of customers checking
out the local furniture store first, and then finding something that they like there.
Therefore it is likely that IKEA will lose customers due to location.
One unique weakness, and one that is potentially only present in America is the
fact that some customers would prefer not to shop from a notoriously European company.
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Unfortunately, there is a large group of overly patriotic Americans who do their best to
steer clear of anything European (Consumer Reports, Made in America?). Many
Americans would rather shop from a mom and pop furniture store that can be found right
by the local barbershop or ice cream parlor. Some may believe that the products at IKEA
are too common or generic while the ones found locally have more of a homegrown feel.
Not to mention that the quality at the local store may be just as good if not better
compared to a trip to IKEA, which could be a daylong trip.
Another potential issue is the overall style of the furniture sold in IKEA store.
The company seems to only have a more modern and sleek look while many customers
may be looking for something different. Of course they are designed this way to make it
easier for self-assembly, however with this style it appears one may not be able to obtain
furniture that has more of a fluffy, comfortable, homey feel. The overall style of IKEA
seems to be more of a sleek, straight-line kind of deal while many other brands have
different varieties and styles.
Moving forward, in terms of profitability and sustainability, return customers and
the lack of being publically traded stand out as weaknesses. For a company to constantly
retain and create return customers, a corporation needs to have both quality products,
which IKEA has, and return customers, which is where there is a lot of grey area. IKEA
sells home furnishing and appliances (IKEA). Once a person has successfully purchased
a couch, bed, dishwasher, etc.; they are not going to be a return customer for quite some
time to replace their newly purchased, high quality item, where as a store similar to a
grocery store, has return customers multiple times in a month. This lack of continued
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returning customers seems to be an issue that can cause a huge problem for IKEA as a
whole.
The second main profitability issue with IKEA is that it is not publically traded
(NYSE). When a company is publically traded, it allows for consumers to buy in and
support their company with the intent to expand. Also, a second major benefit of being
publically traded means that all pertinent financial information needs to be released. This
information being released will prove to customers that the company they are supporting
is both open to expansion, and not having any unknown areas of finances.
At the end of the day, IKEA is a fantastic company that has built itself into a
furniture empire. However, as with all great things, The company still leaves room for
improvement in weaknesses from perception of quality, to location, even to overall
profitability.








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Opportunities
The largest furniture retailer in the world is IKEA. Because of this, IKEA has many
more strengths working in its favor than weaknesses working against. The goal of any
company is to maximize its profit. IKEA has many opportunities that would both increase
revenue and help attain long-term growth. Major opportunities that would help increase
IKEAs profitability are; expanding into emerging markets, growing their online
presence, appealing to younger consumers and increasing sustainability.
While IKEA is known commonly in the United States with 38 stores nationwide,
many other developed countries have significantly less IKEA stores. The economies of
countries like Brazil, India, Russia and China are known as emerging markets
(Emerging MarketsBRICS). Having an emerging market means that both the
economy and industry are rapidly growing. On average, the retail market in these
countries increased by 5% in 2012 (Rahman). Opening stores or increasing the number
of IKEA stores in these countries will greatly benefit the IKEA Company because the
retail market will continue to grow. Emerging markets, and many countries in general,
has a large or growing middle class. IKEA is known for their high quality goods for low
prices, which greatly appeals to the middle class. The population of emerging countries is
also growing rapidly. An example is China, the worlds most populous country, yet, there
are only eleven stores. The population in China would be an advantage to open a larger
number of stores because the number of possible customers will be incredibly high.
IKEA does not have any stores in Latin America, South America or Africa. Opening
stores in these continents would truly make IKEA global and would increase profit.
Brazil has one of the worlds fast growing economies in both purchasing power and GDP
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(Taborda). By opening a store in a heavily populated area, IKEA could increase both
their profits and global recognition.
Opening stores around the world takes years of planning and preparation, but by
growing the companys presence online, could help increase both online sales and
popularity. IKEAs main competitor such as Lowes, Wal-Mart and Home Depot have a
much larger internet base store in addition to having many more stores than IKEA. Since
there are significantly less IKEA stores worldwide than their competitors, many people
look online to get information about the company. By increasing their online presence
further, IKEA could get more customers who are not willing to make a long drive to the
nearest store. As of last year more than 870 million people visited IKEAs website
(About IKEA-GB/EN). In the American retail market, approximately 4% of total retail
sales are online, so by increasing the number of sales online, IKEA could decrease their
cost of having to expand into many areas, but still increase their annual profit (Thomas).
Recently, IKEA doubled their number of Facebook likes and Twitter followers and
created a Share Space so customers can upload pictures of rooms they furnished with
IKEA goods to appeal to a younger consumer base on social media (Frampton).
Appealing to younger customers is a big opportunity for IKEA. Many people are
opting to live in dorms or apartment sized housing for longer periods of time before
buying a traditional family home. Because of this, the furniture needed for apartments has
to be significantly smaller than furniture needed for a traditional home. IKEA can appeal
to a younger market by the use of advertisements that attract to their taste. An example
would be including a wider range of dorm room or apartment sized furniture, bright
colors and items that save space like folding furniture and storage units. IKEA could also
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build stores closer to college towns to expand into the college market. Many people, from
undergrad to graduate schools, will live near the college they attend in an apartment. By
opening stores closer to those areas, it could increase sales by providing an outlet to buy
easy to assemble and environmentally friendly products.
Going Green became a big trend among consumers and since then, many companies
have taken precaution to insure their business is as green as possible. The majority of
furniture made through IKEA contains wood, and because of this roughly 1% of all the
worlds wood supply is used strictly by the IKEA Company. Of the wood used, only
about a quarter is sustainable (Gorman). Although IKEA has made many efforts to
decrease its carbon footprint by cutting transportation cost, flat packaging, and soon
powering all Swedish stores with wind turbines, over 100 million pieces of furniture are
sold every year that contain wood. The demand for greener products has caused IKEA to
sell more energy saving appliances and to set up a webpage that gives tips and ideas for
living a sustainable life (About IKEA-Sustainability).
The opportunities for IKEA, in general, focus on increasing profit while appealing to
customers in various ways. By appealing to a wide range of consumers, IKEA will be
able to expand to different areas and still be confident that they will increase revenue and
attain long-term growth in the retail market.




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Threats
IKEA is a company with worldwide influence and has a hold in several markets.
They specialize in furniture, which is not costly for consumers but is still quality material.
According to the Swedish founder, Ingvar Kamprad, Our idea is to serve everybody,
including people with little money (Ingvar). The do it yourself method makes IKEA
unique and cheap compared to its many competitors. As a company, IKEA has many
weaknesses, challenges, and restrictions that they face. The many threats towards IKEA
include decreasing first time homebuyers, increasing household income, other furniture
competitors and increasing lumber prices.
Young first time homebuyers are decreasing every year due to student loan debt,
higher interest rates, and competition from real estate speculators. One statistic shows
that, first-time buyers have represented around 40% of home sales over the course of the
last three decades, but in the last year, that has dropped to only 30% (Morran). Less first
time homebuyers means a decrease in the number of consumers for IKEA. With young
adults in debt with student loans, it is hard for first time homebuyers to make a big
purchase such as buying a house. It is required to pay 20% of the sale price upfront when
buying a house, which creates problems for young adults who are in debt. Many people
do not want to put less than 20% of the sale price down [because it] often requires the
buyer to purchase mortgage insurance, which raises the monthly payments for years,
possibly decades (Morran). Young Americans hold a large portion of the $1 trillion in
outstanding student loan debt which makes it hard for them to save and spend money
(Morran). The student loan debt that young Americans owe causes them to look like a
higher credit risk, which makes it hard for them to take out loans to buy a house. Renting
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is an option for young Americans, which can cost the same, or less than a mortgage but
there is no equity. On the other hand, first time homebuyers would sell their house after a
decade or so and earn profit, which could lead to a more expensive house or savings.
However, that is not the only threat that IKEA faces.
There are other threats however to IKEAs profitability, one of them being the
rising consumer income in the United States of America. As of December 2012, IKEA
had a total of 37 stores in the United States and over 330 worldwide (Loeb). As consumer
income rises, the consumer may be more prone to spend more money to purchase
furniture which is higher in price. According to the US Census Bureau, over the past few
years, the per capita income has increased in the US, which means there is more
disposable income out there for people to spend on stores other than IKEA. Over the past
two years, the per capita income has increased by nearly two thousand dollars. (US
Census Bureau). Even in the recent months, consumer spending has seen an uptick in the
United States, which goes to show that income is rising, which is cause for concern for
IKEA. For instance, in August, consumer spending saw an increase of about 0.3 percent
from July, and thus since income is rising, there will potentially be less demand for IKEA
furniture and more from other furniture providers, which distribute more high quality
furniture (Lange). As to how this happens is just simple economics, higher spending
shows that income is rising, and higher income shows people have the means to purchase
higher quality items from various stores in the United States and around the world. These
stores range from high end department stores such as Macys to hand crafted furniture
stores/brands like Bassett Furniture. Seeing as these options are of better quality and
more expensive, it would only make sense for the consumers to lean that way instead of
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IKEA. Thus since consumers would be leaning towards other stores, IKEA would lose
market share, and that means they potentially would see a reduction in profit, which goes
to show that rising consumer income is a threat to IKEAs profitability.
IKEA has also incurred various obstacles in the form of competition. With
companies such as Wal-Mart beginning to provide furniture at relatively inexpensive
prices, IKEA has had a dwindling foothold in the home furnishings industry. If IKEA did
not have the competitors that it has, IKEA would have total control over the market and
could maximize profitability. Unfortunately the pool of rival stores has only increased in
the previous decade. Other furniture stores, such as Ashley Furniture and Furniture Fair,
have a precedent for having blowout sales on three-day weekends. IKEAs policy is to
not have sales, but for everyday low prices. This strategy has a fault because a few weeks
prior to a three-day weekend, the rival companies heavily advertise their sales while
IKEA goes unnoticed during the period. IKEA might be able to resolve this problem by
issuing more IKEA commercials to be played and more IKEA billboards to be erected
during the few weeks before a three-day weekend, as to dilute the number of transactions
at the competing furniture stores.
Clearly, IKEA has been hard at work dodging as many of these threats as they can
and being the top company in the home furnishing industry. But as well as IKEA has
done there is still another problem ahead of them: Ingvar Kamprad (the founder of IKEA)
is 86 and the companys legacy must continue. Kamprad is stepping down and leaving
the trusted IKEA name in the hands of his three sons (The Guardian). According to
Susanne Sweet, a specialist in corporate social responsibility at the Stockholm School of
Economics The image that has been built up around him hard-working, parsimonious
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and close to ordinary people does not work for his sons, who grew up in a completely
different world. Do those values count for them?" It is apparent that Ingvar has had a vital
role in building up this monumental business and that his sons have a trusted reputation
to uphold. In time, IKEAs success without its founder will be uncovered and the
consumer loyalty to IKEA will be tested as the flat-pack chains owner changes hands.
A final threat to IKEAs profitability is the rising price of lumber. Lumber is
important to IKEA because they use plenty of it to produce their products. In fact, they
use approximately 1% of the worlds lumber (Boyer). Thus since the cost of lumber is
rising, IKEA must dish out more money to purchase lumber which is later used to
produce their products which are sold to consumers. Over past 5 months, according to the
NASDAQ, the price of lumber has been steadily increased, which is a threat towards
IKEAs profits (Lumber). That means in the future for IKEA to maximize its profits, it
would be ideal for the price of lumber to decrease which would no longer make the price
of lumber a threat, but until that time comes, the price of lumber will be a threat towards
IKEA.






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Recommendation
IKEA is a large company that has many strengths, positive attributes, and
accomplishments. Like every corporation, IKEA has lots of threats against them that
could be improved and would help make the store more profitable and efficient. The
declining of first time homebuyers, the rising of consumer income, other furniture
competitors, and the increase price of lumber are all factors that IKEA faces.
Statistics show that there are less first time homebuyers each year in the US due
to student loan debt, higher interest rates, and competition from real estate speculators.
Decreasing first time homebuyers means that less people have to go out and buy furniture
for their homes. To solve this problem, or to try and fix it, IKEA needs to start
advertising more to show people that the furniture at IKEA is really cheap and most
importantly, affordable. First time homebuyers are usually young adults that just
graduated college and have mass amounts of student loan debt and cant afford to be
spending large amounts of money on furniture.
The rising of consumer income in the United States is also another threat IKEA
has to take into account. Data shows that when a persons income increases, they are
prone to spend more money on furniture that is higher in price. Therefore, since
consumer income is rising, less people are going to shop at IKEA for their furniture since
IKEA isnt that expensive. IKEA needs to show consumers that IKEAs furniture prices
are cheap and affordable but are still quality material and that they dont need to go to
Ashleys Furniture or Furniture Fair.
The increase in lumber prices hurts IKEA since IKEA uses about 1% of the
worlds lumber (Boyer). IKEA needs to be more efficient with their use of wood if they
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want to maximize their profits. They need to think of ways to ration and save some wood
that they are using since lumber prices are increasing.
In order to build IKEAs competitive advantage, the company must know their
opportunities. By knowing which aspects it can improve on, the company can work
towards increasing revenue. One of IKEAs primary strategies should be expanding both
the number of stores and consumer base.
Increasing the number of IKEA stores around the world could both increase revenue
and global recognition. By putting an emphasis on expanding into emerging markets such
as Brazil, India, Russia and China, IKEA could increase their revenue because the retail
market in these countries are steadily increasing by an average of 5%. Countries with
emerging markets have a large or growing middle class. Because IKEA sells high quality
goods for low prices, they would appeal to the middle class. Increasing the number of
stores will help sustain IKEAs competitive advantage by having a greater presence in
areas other than primarily North America and Western Europe.
Building stores takes years of preparation, but IKEA can also increase their
competitive advantage by increasing their online presence and popularity. IKEA has
already made significant progress by doubling their Facebook likes and Twitter
followers, but by advertising their online store to areas that do not have an actual store
could help increase revenue. The online store would also be important in countries that
do not have an IKEA at all. By making shipping accessible, those countries can increase
IKEAs revenue and popularity without having to open a store.
Expanding the companys consumer base will also put IKEA at a competitive
advantage. As more and more people are opting to live in apartments for longer periods
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of time before buying a traditional family home, the furniture needed is smaller. IKEA
can appeal to a younger consumer base by using advertisements that attract to their taste
such as storage units and bright colors. By expanding its consumer base, IKEA could
potentially get a larger number of young customers who need to furnish a dorm or
apartment.
There are several other improvements that could be made to contribute to the
overall well being of the IKEA Company. One such issue that needs to be addressed is
the perception of quality that IKEA radiates. Due to the flat pack technology, and low
prices that IKEA employs, many potential customers falsely believe the companys
products to be low quality. IKEA needs to solve this issue by creating advertising or
awareness campaigns that focus on informing the customer that IKEA is not just a place
to purchase cheap low quality furniture, it is a serious retailer where customers can count
on high quality, but affordable products for their whole home.
Another place of potential improvement for IKEA lies within the convenience of
purchasing its products. IKEA prides itself on being a, Destination Experience, and
this can be a very effective strategy, however it also means that the company only offers
38 nation-wide stores. For this reason, it is not unlikely that IKEA is losing business to
local furniture stores, or other retailers that offer a more efficient use of customers time.
One recommendation besides simply opening up more stores would be to create a more
flexible online experience for customers. Allowing more purchasing options online
would allow a larger market to experience IKEAs products that may not have the time or
means to do so otherwise.
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Finally, IKEA is a proud European company, and there is nothing wrong with
that, however, it does leave the door open for alienating patriotic American buyers.
Although the European influence is part of what makes IKEA the amazing company that
it is, it may be advisable for the American sector of the IKEA company to focus on
appealing to American buyers. For example, advertisements encouraging American
ideals such as Fourth of July, or other patriotic promotions might appeal to customers that
are looking to support their country.












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Works Cited
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