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May 01, 2023

Answer:

Introduction

IKEA is a multinational company, with its origin in Sweden. The company specializes in ready to assemble furniture’s. Ingvar Kamprad is the owner of IKEA and founded the company in the year 1943. The business model of IKEA has been developed by paying attention to the needs of the customers and selling the products at low process, and this has helped the company to grow globally. IKEA has about 151,000 workers and 345 stores in 42 countries (Al-Zghool). This paper intends to discuss about the internal and external factors affecting IKEA especially in context to its UK operations, followed by the leadership style best suited for the company to suit the changing needs of the environment, and analyzing the CSR activities that the company has been involved in.

SWOT Analysis Of IKEA

Strengths

The strength of IKEA are as follows-

The biggest strength that IKEA has is their thorough knowledge about the customers, the company understands the purchasing factors that affects the buying pattern of the customers, and accordingly they manufacture their products to suit the needs of the customers (GURL, 2017).

The second strength is that IKEA focuses on constant innovation that helps them to cut down on their cost.

Thirdly, IKEA has a brand reputation, and a strong market presence that helps them to penetrate in the market more properly.

IKEA’s relationship with the supplier is also quite strong. The IWAY approach is used to integrate the supplier to the supply chain. This gives a competitive advantage to the company.

Weaknesses

IKEA is a multinational company that means it is present in different location in the globe, it becomes impossible for them to maintain the same standard throughout. Though IKEA tries a lot to maintain a uniform standard throughout, but at times they cannot because of the size of the company and hence it is the biggest weakness.

IKEA focuses on the Cost Leadership Model, and at times the quality of the product is affected because of this. The cost of many inputs and raw materials has gone up and has affected the profitability of the company and in this condition sometimes it becomes an issue to maintain the quality of products simultaneously (Phadermrod, Crowder, and Wills, 2019).

Lastly, there are certain scandals related to environment concerns about IKEA especially related to their operations, and the company faces issues in communicating the policies to the stakeholders and this can also be regarded as the weakness the company has.

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