COMPETITIVENESS ANALYSIS

Ruchika Rawat : 197 Neha Bhasin : 190

IKEA History
In 1943, IKEA was founded by Ingvar Kamprad Based in Sweden World's largest furniture retailer Worlds leading home furnishings retailer IKEA numbers 1,04,000 employees in 267 stores in 45 countries

PORTERs 5 FORCE ANALYSIS

Threat of Buyers bargaining power
There is a little power because of the existing lowprice options IKEA ensure that their customers in all aspects will be satisfied for quality service they provide Focused their marketing approach on demands and needs of the buyer IKEA uses their corporate responsibility as a good public image to their customers IKEA Family -card as a membership

Threat of Suppliers bargaining power

IKEA has its thousands of suppliers that set standards in delivering the materials

Because of the low-pricing, IKEAs profit margin also affects the prices in raw materials than by prices in labour IKEA has a wide network of 1300 suppliers. They carefully select the manufacturer of its products. The company has own production factories and designers which makes it less dependent on others Bargaining power of supplier could be threat for the profit of the company

Threat of Substitute Products

There is no specific product that can be a substitute for the furniture but IKEA at least, have to keep up with the latest trends, to avoid becoming out of style Problems faced due to distribution channels

Threat of Intense Segment Rivalry

The IKEAs furniture competitors offers different styles and functionality Conrin targets a new low cost in terms of furniture line; Crate & Barrel offers a furniture in a box which is subject in higher prices Ethan Allen aimed at a more upscale market Wal-Mart is equipped in a big box furniture that is categorized under the general store must-have-items, but dont have much of a style IKEA is the most successful in delivering the complete package for the customers that reflects on weak rivalries There will always be substitutes for furnitures but IKEA competes with price and there isn't competitors in same price range

Threat of New Entrants

IKEA stores do not reach many small towns and this is an opportunity for the new competitors to move into small and midsize cities with smaller stores and less selection. But not easier in city because new entrants have to establish a vast supply chain and create a unique brand name The furniture market is already highly competitive - the risk of new entrants is not extremely high - huge capital needed to start the business