1.) List IKEA’s external and internal challenges.

Looking at IKEA’s challenges, which ones do you

think pose the greatest threat? Why? How would you address the challenges?

IKEA faces significant challenges on moving forward and the external and internal challenges that
IKEA had face are listed below

 External challenges:
 PESTAL
 PORTER FIVE FORCE

 Opening a New store is critical to drive future growth.
 Finding new sources of supply to support more store openings.
 Difficulty finding suppliers that are a strategic fit with its highly efficient operations.
 World’s consumers are becoming more sensitive to the issue of deforestation and its
possible to link to global warming, IKEA would need to take into consideration finding a
low cost material as replacement of wood.
 IKEA holds less than 5% of the home furnishing markets whereas in some European
markets it holds 30% of markets which is also a challenges for IKEA.
 Increasing competitors of low price furnishing like, K-mart and target.

 Internal challenges:
 SWOT

 Without Mr. Kamprad’s involvement no strategic decisions have been made and he
announced that he is stepping down from chairing inter IKEA which influences on the
culture and organizations of the company.
 IKEA is privately held company through a complicated network of foundations from
Netherlands, Lichtenstein and Luxembourg, which creates constraints in accessing large
sums of capital needed for rapid global expansion.

2.) Walmart entered a period of difficulties after Sam Walton stepped down. Do you anticipate
IKEA having the same leadership transition challenges? Why or why not?
 Here, in the case of IKEA there might be much similar case like Walmart after Sam Walton
stepped down because leader represent like an icon of the company and in the IKEA case after
the stepped down of Mr. Kamprad the leadership will be taken further by his son’s and the
business still stays within the family and I supposed that the son will would be somehow guided
or advised by his father so there would not be difficult in the decision making process and
achieving the results. However, if the leader initiates to bring any changes within the rules and
regulation of the current IKEA’s strategy then it may lead to conflict and a lot of challenges may
arise because IKEA runs in a global network and making such changes needs a lot of adaptation
in order to sustain smoothly.