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Ikea Porter's Five Forces Analysis

1492 Words6 Pages

IKEA is a multinational home furnishing retailer which famous for its stylish and functional products with affordable price. IKEA was first founded by Ingvar Kampard in Sweden in 1943. According to Loudenback (2016), IKEA is one of the world largest furniture retailers. Nowadays, there are totally 389 IKEA stores in 48 countries are owned and operated by 13 different groups of companies under franchise agreements with Inter IKEA Systems B.V., the owner of IKEA concept (Inter IKEA Systems B.V., 2015). Among them, the largest group is INGKA Group (IKEA Group). IKEA store is huge and very different from normal furniture store. According to Clara Lu (2014), IKEA store is the combination of retail and warehouse. Customers can browse for their desirable …show more content…

According to Combe (2014), the main targeted market segment of IKEA is young people. IKEA is undisputed the best choice for these kinds of people as they prefer stylish and fashionable furniture and care for the prices instead of quality and durability. Porter Five Forces is used to understand and analyze the driving forces that influence the intensity of rivalry, profitability and attractiveness of an industry (RapidBi, 2012). This model is very useful and crucial for strategy planning and decision making (Arline, 2015). By having a better insight of these five competitive forces and the furniture industry structure, it can help IKEA to improve its strengths and weaknesses and in turn improve the position of IKEA in furniture …show more content…

Below is the table of comparison between them. IKEA Wayfair Walmart Price Affordable Depend on the chosen brand Cheapest Quality Acceptable Depend on the chosen brand Normal Design Stylish and Modern Depend on the chosen brand Normal Selection Wide Widest Limited than IKEA Shipping Charge shipping cost Free shipping if over $49 (Montana, 2015) Some furniture are shipped for free (Natasha, 2015) Products Home furnishing Furniture Everything that can be founded in department store Customer Service Good, but - Slow shipping (Montana,

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