However, Ikea is countering its main weakness with its key opportunity, which is expansion into emerging markets in Asia and Eastern Europe. The development of premium lines, whether within existing stores or through new high street fascias complementing the out-of-town stores, and an increase of sales via the development of e-commerce sites in each country, are both improving customer service, and reducing the volume demand on existing stores. Unfortunately, these extra developments are driving the threat of a possible over saturation of the market, increased by the fact that competitors are following suit, by introducing similar product ranges at low prices. This is compounded by the negative impact on sales of continued depressed economic conditions in its core European market as well as the adverse effect of a weak dollar on sales in the US, and the political and economic instability of the Chinese and Russian markets, in which the company plans to invest heavily in the short-mid term, also presents a potential threat.
Ikea group is a private group engaged in the business of retail home furniture and other housewares. INGKA Holding BV is the parent company of Ikea group companies, including the industrial group Swedwood, which manufactures Ikea furniture. INGKA Holding BV is wholly owned by Stichting INGKA Foundation. The group operates in Europe, the US and Asia. It is headquartered in Helsingborg, Sweden and employs about 104,000 people. The group recorded revenues of E17,300 million during the fiscal year ended August 2006, an increase of 16.9% over 2005.
Scope of the Report
- Provides all the crucial company information required for business and competitor intelligence needs
- Contains a study of the major internal and external factors af ...