IKEA was founded in the 1940s as a home furnishings company and quickly expanded into its current form. The companies mission is to "offer home furnishing products of good function and design at prices much lower than competitors by using simple cost-cutting solutions that do not affect the quality of the products" (Ikea.com, 2011). The company operates on a franchise model. There are IKEA stores in 41 countries around the world. The company is privately held, but does publish its revenue figures in an annual report. According to this report, the company earned €21.8 in revenues and €2.5 billion in profit.
Internal Environment
Ikea's success derives from several strengths. The company has earned a strong brand, and this means that wherever it opens a store there is immediately a strong demand. People in places with no Ikea know the brand and that pent-up demand allows the company to easily expand to new markets. The brand strength is driven by the design of the furnishings and the concept of the company, both of which have strong appeal to a mass consumer audience. A further strength is the store design, that encourages consumers to spend long periods of time in the store shopping, thereby increasing the average ticket. There are few weaknesses apparent at Ikea -- what it does, it does well. The company does not overextend its own capabilities. It may, however, be dependent on Kamprad's leadership, since he has always been at least the spiritual leader of the company.
External Environment
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