IKEA Assignment Example | Topics and Well Written Essays - 2500 words

IKEA - Assignment Example It came into existence in the year 1943 and within a very small time frame it attained a renowned brand image due to its modern architectural designs and eco-friendly nature. Due to which its revenue and operating income enhanced by â‚ ¬27.628 billion and â‚ ¬3.482 billion by the end of 2012 as compared to other rivals in the market. This marked the success of the organization of IKEA and so it expanded in many other parts of the world like Germany, Norway and Denmark (Inter IKEA Systems B.V, 2012). IKEA’S History IKEA is established in the year 1943 by Ingvar Kamprad, a young entrepreneur residing in Smaland of Southern Sweden. The name of the organization IKEA is derived from the initial letters of Ingvar Kamprad, i.e. I and K along with the first letters of his hometown, Elmtaryd and Agunnaryd. Ingvar Kamprad started his career in business by selling matches, pen, pencils, fishes, seeds and many others. However, slowly and gradually, he started offering high-level of concentration over IKEA and so presented varied types of advertisements in local newspapers to attract wide range of customers. Moreover, in order to make it a branded furniture retailing house, he presented varied types of attractive and stylish furniture’s such as beds, chairs, tables, home appliances and many others at a quite lowest price. This proved quite effective for the organization and helped Ingvar Kamprad to open his first store in Norway in the year 1963 and in Denmark in 1969 (Inter IKEA Systems B.V, 2013). After that, within a small time frame, IKEA expanded to other parts of Europe, Switzerland, Australia, Hong Kong, Canada, Germany, UK and many others. Therefore, by the end of 2009, IKEA group became successful to operate in more than 332 stores in 40 countries. Hence, IKEA took more than six decades to mark its position in the segment of trendy furniture’s among other retailers. IKEA Today Inspite of extreme economic downturn, IKEA maintained its popu larity and brand image in the market in a quite stable condition due to its objective to present qualitative products at a competitive price. Due to which, the leading leader of home furniture enhanced its total sales by ?2.15 billion and net income by ? 3.51 billion by the end of 31st August 2013. Along with this, the market share also increased from 7.3% in 2012 to 8.5% in 2013 in the market of UK. This became possible only due to its wide expansion into 332 stores in more than 40 countries in the entire globe (Inter IKEA Systems B.V, 2012). Other than this, the annual sales figure and sales per region is presented in the below graphs. Therefore, from the graph, it might be clearly depicted that the rate of sales of the furniture’s of IKEA is very high as compared to others. This enhanced the equity and profit margin to a significant extent among other retailers (Inter IKEA Systems B.V, 2013). 2. Macro-environment of IKEA In order to analyse the external environment of the market of UK, one of the most renowned technique is used. It is named as PESTEL analysis. Political Factors- the political scenario of UK is quite cacophonous due to the presence of inefficient bureaucracy and corruption. Other than this, the instable government policies and regulations also acted as a curse that hampered the growth of the organization of IKEA. Not only this, shaky coalition of the government of UK hampered the business scenario to a