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Information about IKEA PPT

Published on October 7, 2009

Author: chirujith

Source: authorstream.com

Slide 1: IKEA Introduction : Introduction Founded:1943 in Älmhult, Småland, Sweden Headquarters: Leiden, The Netherlands Industry: Retail (Specialty) Products: self-assembly furniture Revenue: $28.6B USD (FY 2007) Employees: 104,000 (2006) Website: www.ikea.com 2 Slide 3: INGKA Holding is the parent company for all IKEA Group companies, including the industrial group Swedwood, which commissions the manufacturing of IKEA furniture coming from any manufacturer worldwide. INGKA is owned by STICHTING INGKA foundation. The company which was originated in Smaland, Sweden, distributes its products through its retail outlets IKEA has shown leadership in adopting more environmentally friendly measures in its manufacturing processes Acronym- I (Ingvar)-Founder’s first name K (Kamprad)-Founder’s last name E (Elmtaryd)-Farm where he grew up A (Agunnaryd)-Home village Store Format : Newer IKEA stores are usually very large blue buildings with few windows and yellow accents (the company's colors are also the national colors of Sweden. Store Format Slide 5: 5 International business IKEA stores around the world: "United States, Denmark, Germany, Spain, Israel, Saudi Arabia," CHAIN OF PRODUCTS : CHAIN OF PRODUCTS Restaurants and food markets Furniture Houses, flats Family Mobile Manufacturing QUESTIONS : QUESTIONS 1. Describe what is meant by a SWOT analysis. A technique that enables a group or individual to move from everyday problems and traditional strategies to a fresh perspective. Slide 8: S – Strengths W – Weaknesses O – Opportunities T – Threats Internal Environment External Environment Strength : Strength Any existing or potential resources or capability within the organization that provides a competitive advantage in the market. Example: Strong distribution network Intense Staff commitment and loyalty Increasing profit margin Weakness : Weakness Any existing or potential force which could serve as a barrier to maintaining or achieving a competitive advantage in the market. Example: Lack of a clear company strategy Lack of training opportunities for using a new software Opportunity : Opportunity Any existing or potential force in the external environment that, if properly leveraged, could provide a competitive advantage. Example: Organization's geographic location New technology Threat : Threat Any existing or potential force in the external environment that could erode a competitive advantage. Example: A new competitor entrant A recession, rising interest rates, or tight credit lines Aim of SWOT Analysis : Aim of SWOT Analysis Take advantage of strengths and opportunities. Minimizes weaknesses and eliminate threats Solving problems Implementing change Developing strategies for achieving the organization's objectives and mission Benefits of SWOT Analysis 2. What is the difference between Internal and external factors? : 2. What is the difference between Internal and external factors? Strengths and weaknesses are internal aspects. This means that they are within the control of the business. They may refer to aspects of marketing, finance, manufacturing or organization. Opportunities and threats are external factors. This means that they are outside the control of the business. These may include the environment, the economic situation, social changes or technological advances, such as the internet. Slide 15: Strengths Strengths could include a company’s specialist marketing expertise or its location. They are any aspect of the business that adds value to its product or service. IKEA’s strengths include: • a strong global brand which attracts key consumer groups. It promises the same quality and range worldwide • its vision – ‘to create a better everyday life for many people’ . • a ‘democratic design’ – reaching an ideal balance between function, quality, design and price. IKEA’s ‘Cost Consciousness’ means that low prices are taken into account when each product is designed from the outset. These strengths contribute to IKEA being able to attract and retain its customers. Contd… : Contd… IKEA has strengths right through its production process:- Increasing use of raw materials Smarter use of raw materials Volume Commitments Using New Technologies Slide 17: IKEA has a number of areas of focus to its work with sustainability, each of which it supports in various ways: Solutions for a sustainable life at home – IKEA gives online tips and ideas for this. Sustainable use of resources. IKEA aims for zero waste to landfill, wastewater treatment and programmes to reduce its use of water. Reducing carbon footprint. IKEA aims to reduce energy use, use more renewable energy, cut its use of air transport and reduce packaging. Its green transport initiative includes an aim to reduce business flights by 20% in 2010 and 60% by 2015. Developing social responsibility. IKEA’s policy includes support for charities such as the World Wildlife Fund, UNICEF and Save the Children. Being open with all its stakeholders. This involves building trust through good communication with consumers, co-workers, key opinion formers and the press. Being sustainable is a central part of IKEA’s image. OPPORTUNITY Slide 18: Weaknesses IKEA has to acknowledge its weaknesses in order to improve and manage them. This can play a key role in helping it to set objectives and develop new strategies. IKEA’s weaknesses may include: • The size and scale of its global business. This could make it hard to control standards and quality. Some countries where IKEA products are made do not implement the legislation to control working conditions. This could represent a weak link in IKEA’s supply chain, affecting consumer views of IKEA’s products. The IWAY code is backed up by training and inspectors visiting factories to make sure that suppliers meet its requirements. • The need for low cost products. This needs to be balanced against producing good quality. IKEA also needs to differentiate itself and its products from competitors. • IKEA needs to keep good communication with its consumers and other stakeholders about its environmental activities. The scale of the business makes this a difficult task. IKEA produces publications in print and online (for example ‘People and the Environment’) and carries out major TV and radio campaigns to enable the business to communicate with different target audiences. Slide 19: Threats If a company is aware of possible external threats, it can plan to counteract them. By generating new ideas, IKEA can use a particular strength to defend against threats in the market. Threats to IKEA may stem from: • social trends – such as the slowdown in first time buyers entering the housing market. This is a core market segment for IKEA products • market forces – more competitors entering the low price household and furnishings markets. IKEA needs to reinforce its unique qualities to compete with these • economic factors –the recession slows down consumer spending and disposable income reduces. Slide 20: 3. Analyze ways in which IKEA has managed to minimize threats to its business. IKEA addresses these issues in many ways. It manages weaknesses and threats to create a positive outcome. Social trends: IKEA is building online help to guide customers to a more sustainable life. Here it can focus on home improvement in the slowing housing market. It supports customers with tips and ideas on its website to reduce their impact on the environment. This will also save them money. Staff are trained on sustainability, both on what IKEA is doing and how they can take responsibility to become sustainable for themselves. Market forces: IKEA is large enough to enjoy economies of scale. This lowers average costs in the long run through, for example, better use of technology or employing specialized managers. Economies of scale also give a business a competitive edge if cost savings are then passed on to customers in the form of lower prices. This puts up high barriers to entry for smaller companies entering the market. Slide 21: Economic factors: IKEA’s low prices create appeal amongst its customers in tough financial times. It is vital to keep prices as low as possible when the retail sector is depressed. IKEA’s pricing strategy targets consumers with limited financial resources. Its products will also appeal to those with higher budgets through good quality and design. The company must ensure that it is always recognized as having the lowest prices on the market in the future. Communication plays an important role here. Slide 22: 4. Discuss the contribution of SWOT analysis to IKEA’s business growth. IKEA is a home furnishings manufacturer that has conducted a SWOT analysis of its business operations. A SWOT (strengths, weaknesses, opportunities, threats) analysis allows a company to evaluate their operations from an internal and external point of view. The company examines their strengths and weaknesses internally. A strength may be an excellent order management process while the weakness may be poor communication between departments. An opportunity could be the ability to partner with a non-profit organization and a threat could be government regulation of the use of raw materials. IKEA is a home furnishings manufacturer that has conducted a SWOT analysis of its business operations. In order to improve performance, 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. IKEA responds to both internal and external issues in a proactive and dynamic manner by using its strengths and reducing its weaknesses. Through this, IKEA is able to generate the strong growth it needs to retain a strong identity in the market. Conclusion : Conclusion IKEA is a well-known global brand with hundreds of stores across the world. In order to improve performance, it must assess its external and competitive environment which will reveal the key opportunities to analyze there advantages and threats. IKEA responds to both internal and external issues in a proactive and dynamic manner by using its strengths and reducing its weaknesses. This helps IKEA to retain its strong identity in market. IKEA’s passion combines design, low prices, economical use of resources, and responsibility for people and the environment. IKEA believes that there is no compromise between doing good business and being a good business. It aims to go beyond profitability and reputation. IKEA is intent on becoming a leading example in developing a sustainable business. This will create a better everyday life for its customers. IKEA has discovered a business truth – being sustainable and responsible is not just good for customers but it is also good for the business. Slide 24: Home Is the most important place in the world! www.ikea.com East, West, Home is the Best! Any Questions? Thank you 

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