Case Study of (IKEA) SWOT analysis and sustainable business planning

Case Study of IKEA 

Q1) Describe what is meant by Swot analysis.

-Swot analysis is one of the most important decision making and planing tool. This tool is the first step of decision making and planning. Most of the organization use SWOT as their primary decision making  and planning tool. SWOT mainly focuses at the Strength, Weakness, Opportunities and Threats which are involved in a business venture. Strength and Weakness are the internal factor. Strengths are positive factor and Weakness are the negative factor. Internal factor includes marketing, finance, manufacturing or organization. Opportunities and Threats are external factors. Opportunities are positive factor and Threats are negative factor. External factors include the environment, economic situation, social changes or technical advances. For e.g. one of the strength of IKEA is to use no more materials than necessary in the production of each item.

Q2) Explain the difference between internal and external factors.

- Internal Factors also refers o the Strength and Weakness of the business venture. The internal factors are affected by the different aspects of finance, marketing, manufacturing or the whole organization. All the internal factors are affected due to the working process inside the venture. It can be controlled by the top level managers. In IKEA, the Internal factors i.e. Strength is it promises the same quality and range world wide. Likewise weakness of IKEA is it needs to keep good communication with its consumers and stake holders about its environmental  activities. The scale of the business makes this a difficult task.
External Factors also refers to the opportunities and threats of the business venture. The External factors are affected by the environment, the economic situation, social changes or technological advances, such as the internet. It is due to disturbance occurred outside the business venture. It cannot be controlled by the manager of the business. In IKEA, the external factor i.e. opportunities a growing demand for ow priced products. Trends in the current financial climate may result in consumers trading down from more expensive stage. Likewise, Threats of IKEA is  more competitors entering the low price household and furnishings.

Q3) Analyze ways in which IKEA has managed to minimize Threats to its business.

-IKEA tries to manage, how to minimize the threats of its business. If it manages to minimize threats, it helps, it helps IKEA to create a positive outcome.

1)Social Trends-IKEA is developing a online guide to its customers so that it will help customers to live a sustainable life. It provides ideas, tips and suggestions to its customers on their website which helps to reduce their impact on the environment. This will also help them to save money. They are hiring just the staff who are trained on sustainability.

2) Market Forces-IKEA is large enough to enjoy economies of scale. Many competitors are entering in the market with low price households and furnishings. They must try to use technologies or employing specialized managers. Economies of scale also give a business a competitive edge if cost savings are then passed on the customers in the form of lower prices.

Q4) Discuss the contribution of SWOT analysis to IKEA's business growth.

-IKEA is a well known global brand with hundreds of store across the world. To improve its performance, it took help of SWOT analysis. SWOT analysis helped IKEA to recognize its strength, weakness, opportunities and threats. With the contribution of SWOT analysis, to improve further,it must assess its external and competitive environment. This will reveal the key opportunities it can take advantage of and the threats it must deal with. Strength could include a company's specialist marketing expertise or its location. They are many aspects of business that adds value to its product or service. Likewise in opportunities that arise. In threats, if a company is aware of possible external threats, it can plan to counteract them.