Ikea
- Submitted by: DivaRokStar
- Views: 339
- Category: Other
- Date Submitted: 04/11/2014 09:23 AM
- Pages: 4
- Report this Essay
IKEA
PORTERS FIVE FORCES ANALYSIS
RIVALRY WITHIN THE INDUSTRY
IKEA had to compete with several companies within the furniture industry when Kamprad initially started selling furniture and when he went global with his company. For example; IKEA competed directly with Sweden's expensive furniture stores, the U.S. who has countless retailers within this market; such as Home Depot, Wal-Mart, Evan Williams, Costco, and several mom and pop stores, China also plays a huge part in this because many of IKEAS competitors import from China, in order for them to sell at relatively low prices.
BARGANING POWER OF SUPPLIERS
Kamprad faced infrequent obstacles pertaining to the bargaining power of suppliers. In the early 1990's after opening several stores in the U.S. IKEA was sourcing many of its goods from overseas however U.S. Currency held lesser value than the Swedish kronor the currency of his suppliers. IKEA wanted to pinpoint the best suited suppliers having the least costly materials without sacrificing quality. IKEA held1380 suppliers in over 50 countries, by 1991 IKEA faced the risk of losing its supply base. As time passed IKEA foreshadowed it having an opportunity of barrier to entry for others who chose to enter into the furniture business by working with the suppliers in the company's big market, Kamprad, built strong relationships with his suppliers and also by purchasing Swedwood; a Swedish manufacturing company IKEA secured its position in the furniture industry.
BARGANING POWER OF BUYERS
Within an industry that is highly volatile and ever changing to fit new trends, the bargaining power has always been high and lay in the hands of the buyers. For many years furniture has been considered treasures passed down from one generation to the next. In the Western European Countries IKEA was able to accommodate consumers with elegant yet practical designs that were low costing and its immediate availability. However, Kamprad found after expanding...
PORTERS FIVE FORCES ANALYSIS
RIVALRY WITHIN THE INDUSTRY
IKEA had to compete with several companies within the furniture industry when Kamprad initially started selling furniture and when he went global with his company. For example; IKEA competed directly with Sweden's expensive furniture stores, the U.S. who has countless retailers within this market; such as Home Depot, Wal-Mart, Evan Williams, Costco, and several mom and pop stores, China also plays a huge part in this because many of IKEAS competitors import from China, in order for them to sell at relatively low prices.
BARGANING POWER OF SUPPLIERS
Kamprad faced infrequent obstacles pertaining to the bargaining power of suppliers. In the early 1990's after opening several stores in the U.S. IKEA was sourcing many of its goods from overseas however U.S. Currency held lesser value than the Swedish kronor the currency of his suppliers. IKEA wanted to pinpoint the best suited suppliers having the least costly materials without sacrificing quality. IKEA held1380 suppliers in over 50 countries, by 1991 IKEA faced the risk of losing its supply base. As time passed IKEA foreshadowed it having an opportunity of barrier to entry for others who chose to enter into the furniture business by working with the suppliers in the company's big market, Kamprad, built strong relationships with his suppliers and also by purchasing Swedwood; a Swedish manufacturing company IKEA secured its position in the furniture industry.
BARGANING POWER OF BUYERS
Within an industry that is highly volatile and ever changing to fit new trends, the bargaining power has always been high and lay in the hands of the buyers. For many years furniture has been considered treasures passed down from one generation to the next. In the Western European Countries IKEA was able to accommodate consumers with elegant yet practical designs that were low costing and its immediate availability. However, Kamprad found after expanding...