Threats: The competition in the business world is increasing as new companies are coming up

with better business models or innovative products. The same goes for IKEA when it faces a lot
of local stores with a similar business model. The economic condition of the people is getting
better day by day. The living standard is increasing. So, it would be not practical to think that
consumers with keep on buying the same low-quality products with increased income. They will
move on to the higher quality brands (Norton, 2012). IKEA can face provable sues for the bad
press of the company. The lawsuit can be based on the product on employment. However, the
main problem is not the result rather the bad impression due to the lawsuit. Consumers will lose
trust in the company if the company faces a serious problem.

IKEA’s PESTLE analysis

PESTLE is an external environment analysis to figure out how the factors may create
opportunities a threats for the company. Below is a PESTLE analysis of IKEA.
Political: As IKEA operates in several different countries. Thereby, it has to take care of the
rules and regulations of different countries simultaneously. However, some countries have
political stability and some do not. Depending on the stability and business friendliness of the
countries, the import and export of a country are run. The friendlier the country is, the better for
the businesses and vice versa. For example, China and India are becoming open multi-national
businesses (Harapiak, 2013). And thus IKEA is considering moving its business to the Asian
markets. In brief, IKEA always watches out for countries that are less complex in terms of
political stability.