Ikea Pestel Analysis Essay

Introduction

Ingvar Kamprad “IKEA” came into existence in 1943, when he was just 17 in the small village of Agunnaryd in Sweden (IKEA History, n.d.). IKEA started selling furniture product in 1947. After receiving positive response IKEA opens their first store in Almhult, Sweden in 1958. At present IKEA grand total of 301 stores in 37 countries among that IKEA itself owns 267 stores in 25 countries. Estimated sales revenue in 2009 financial year was 21.5 billion euro's with the help of 123,000 co-workers in 25 countries (IKEA group stores, n.d.). The current global economic downturn has turned many businesses around and forcing them to close down the business. IKEA was one of the businesses which got affected by the global downturn and it resulted

These are the important factors as per the present time. The PESTEL analysis is the tool which helps in determining the future of

According to Scherrer, 2003 consumer preference, purchasing pattern and condition under which the product can be sold are affected by the social culture changes.

The period after 1990's is said to be the booming period. Many countries around the world have changed or modified their county policies for international companies to boost their own economy (“Pan”, 2007). Among all the developing countries china was one of the fastest and strongest economy and IKEA took that advantage and opened the first store in Shanghai. But IKEA's policy of do-it-yourself did not work due to social differences in different countries (Anonymous, 2009). IKEA changed it policies and used the cheap labor available in China and provided its product with a free delivery and fully assembled product. After the changes in their own policy IKEA became successful in China and is now planning to open 2 more store and bringing their total to 10 in