IKEA SWOT Analysis

IKEA is one of the most popular and iconic brands in the world. From the beginning, IKEA was founded on different principles—namely, frugality and low cost. Most furniture companies offer service and advice in settings where salespeople compete for sales commissions. However, IKEA founder Ingvar Kamprad recognized that customers were willing to trade off typical amenities to save money. Today, the no-frills frugality is the cornerstone of the IKEA caché and the reason for its immense popularity. IKEA’s marketing strategy is based on building customer relationships. IKEA’s vision and core operating philosophy makes this clear:

The IKEA Concept: Provide functional, well-designed furniture at prices so low that as many people as possible will be able to afford them. Creating a better everyday life for the many people.

IKEA’s strategy is based on maintaining a downward pressure on costs and operating expenses. Along with the clean, frugal styling that IKEA uses in its product design, the company’s cost control measures are vital to its low retail prices. List three examples you find to explain this clean, frugal styling.

Modular design           

Simple design       

pairing of appropriate material

However, IKEA’s frugality will be challenged as it expands its store operations in the United States. Let’s explore more details in its expansion strategy.

Internal Strengths

• IKEA offer low price furniture to customer as compared to competitors

• The company believes in quality products at lower prices.

• Strong relations with suppliers

• low operational cost

• Brand reputation is high due to quality products, instant delivery, low cost and non-threating shopping experience.

• Serving Worldwide

• Production efficiencies by replication of IKEA proprietary, easy to manufacture product designs.

• Strong customer relationship management

• Strong brand image

Internal Weaknesses

• Do it yourself approach aren’t suitable for some people as they have put extra efforts in buying, bringing and assembling furniture is a cumbersome job, thus they would prefer to pay more for convenience.