IKEA

Company Analysis: IKEA



Company Analysis: IKEA

Introduction

IKEA is one of the best private furniture based companies in the world, which started in a small village of Agunnaryd in Sweden. The main reason for success for the company is its ready to assemble line of furniture such as beds, desks, appliances and different home accessories. IKEA has experience of working more than six decades around the globe and currently operating in 40 countries around the world. The company is the world's largest furniture retailer. IKEA is a company, which has always focused itself towards creating a better future for the people by producing reliable furniture at a low cost. The basic concept of the company is based on the culture of southern Sweden, which has undernourished soil and poor people, and they use their hard work to survive. The genius behind the company made sure that all these values are transferred to the company, and its core values are designed with specific inherited values The Company has evolved with respect to time, they started with only basic wood related products and at this point in time they make every housing product (IKEA, 2012).

IKEA's product ranges from various industries, which are based, on reliability and low cost. It has furnishing solutions for everyone from creative to business minds. IKEA's products are outdoor furniture, eating tables, Desks, Mirrors, children's IKEA, cooking, Bathroom storage, Beds & mattresses, chairs, clothes storage, Decoration, flooring, Kitchen cabinets and appliances, Lighting, small storage, sofas and armchairs, storage furniture, Tables, Textile and rugs, tools and fittings and TV and media furniture (IKEA, 2012).

Internal and External Analysis

PESTEL Analysis

Political factors

These are the factors controlled by the government. This factor fundamentally explains the part government plays or the intervention of the government in an economy. Degree of control a government has on the economy. Political decisions decide many factors in an economy, factors like workforce, education, health and wealth of a nation (oup, 2007). When it comes to real estate, the degree of control is less. The housing bubble created was a drawback on the government's side. Many factors are included when a crisis hits but then again a government body is responsible for these actions. In this case, the political condition is perfect to support IKEA's business.

Economic Factors

Economy has a very sensitive effect on real estate especially on the hotel property. The housing bubble discussed in this case shows that the overall wealth of the economy is poor. Housing bubble causes labor problems, unemployment and loss of value of money. Keeping other factors more or less constant a housing bubble can send an economy into depression or recession. The current population of UK is around 62.2 million and it will increase to 64.3 million by 2015 according to the recent forecast. This implies a strong demand for housing. Due to increase in inflation, the prices of raw materials have increased and it is a negative point of housing industry. The economy is still recovering from rescission and people are not ...