IKEA SWOT Analysis (2016)

IKEA is a brand known for its quality and affordable furniture. It sells an affordable range of home furnishing products.  Affordable pricing and good quality have resulted in high popularity and great sales for the brand. IKEA has achieved this by combining several factors. It provides utility, quality, design and value in its products. Sustainability also features importantly on its agenda. From design, packaging and sourcing to distribution, its focus has remained on affordability and quality in all its products.

It aims to provide people with beautiful lives inside their homes. IKEA products are sold in stores and through online channels. IKEA calls its design process, democratic design for it involves the customers. Some of the best things about it are its vast product range, attractive designs, great product quality as well as a great distribution chain. All of these things mean a great brand.

IKEA SWOT Analysis 2016


  • Worldwide presence
  • Brand image
  • Affordable products
  • Excellent product designs
  • Enormous range of products
  • Leading brand with strong financial position
  • excellent store design

IKEA is present worldwide. Globally, it operates 377 stores. However, its products can also be found on the web and purchased through apps. It has maintained a strong brand image. IKEA is best known for its affordable products. Despite their affordability, these products are great in quality and design. They have attractive designs which makes them popular. Apart from these things its product range is enormous.

It is a creative brand that caters to all types of furnishing needs. IKEA makes homes beautiful. It has a separate category of outdoor products for beautiful exteriors. IKEA is a leading brand in its category. Sales of the group last year, grew to 31.9 billion Euros which was 11.2% higher than previous year. This shows its financial strength. Another important strength of the brand is its store design. For a brand that  sells 9500 products through its stores, an excellent store design is a must. It sells modern and stylish furniture. Clearly, its products are made for the Gen Y.


  • Weak position in Asian markets
  • Demographic design concept not a major source of competitive advantage

IKEA has not been able to perform as well in the Asian markets as the other markets. In the Asian markets, its presence and demand both have remained low. Moreover, it has seen increased competition from other brands. In the Asian markets, there are a number of other big and small brands providing affordable furnishing. Its demographic design concept has also failed to provide a sustainable competitive advantage. While its presence in Asia may be improving, the pace is still slow. It might have to do a lot more to improve its brand awareness there.


  • Business opportunities in emerging markets
  • Strategic partnerships with other brands
  • Production in India and China
  • Adding premium quality products

IKEA can find significant business opportunities in the emerging markets. If it can only improve its brand presence in these countries, its profits and revenue can be higher. Moreover, the brand can form strategic partnerships with other brands. Especially in the Asian markets, it would be profitable to partner the local brands to increase market presence. Moreover, the cost of raw materials and labor are low in the Asian markets. If IKEA sets up production facilities in India or China it will reduce production costs. Another strategic step IKEA can take is to add premium products to its kitty. This way, it will find it easier to expand its customer base. It should also focus on CSR activities to increase its brand awareness.


  • Increase in demand of premium products
  • Increased competitive pressure from the rival brands

The recession has passed and economic activity has surged worldwide. The demand of premium products has increased with improved economic conditions. This can be a threat to the affordable range of products that IKEA sells. Moreover, the competitive pressure from the rival brands has risen. IKEA has been unable to build a very strong position in the Asian markets. The other brands pose a major threat to its sales there.


The brand should focus on improving its brand awareness in the Asian markets. It should actively pursue marketing strategies to increase its brand awareness in India and China.  Moreover, the brand should partner with local retail brands to gain a foothold in the emerging markets. Not just this, it can add new premium quality products to its portfolio. It is because with improvement in the world economy, the demand for these products has increased. IKEA's products are made for the new generation. It provides excellent variety in its  product range. Overall, the brand has made a strong position for itself in the market. Now, it may be the time to expand the brand to the less explored corners of the world. IKEA could grab a larger market share if it introduced products in all  price ranges. This could help it target customers from all the tiers.

['SWOT' is an acronym for Strengths, weaknesses, opportunities and threats. It is a powerful strategic management tool that can help to know one's important strengths and weaknesses and to exploit the opportunities. It can also help counter the threats. Strengths and weaknesses are internal factors and opportunities and threats external. So basically, SWOT is a tool designed to help you reduce your weaknesses and counter the threats. This can improve the business' chances of success.  Companies conduct a SWOT before they embark on a new strategy or before they make an important business move like investing in a new project.]


Other SWOTs, you may also check, COSTCO,  Apple, Nike, Walmart, Microsoft, Coca Cola, Toyota.

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