Business Analysis

In-Depth SWOT Analysis of IKEA

  • X(Twitter) icon
  • Facebook icon
  • LinkedIn icon
  • Copy link icon
In-Depth SWOT Analysis of IKEA.jpg


Since 1943, IKEA International Group has made a name for itself as a reputable home furniture design and manufacturing company. For over seven decades, IKEA has specialized in providing stylishly designed products at considerably low retail prices. IKEA is the go-to home furniture brand for low-income earners looking for great home furniture designs, but only if they are available at a comparably lower cost. 

IKEA has its headquarters located in the Netherlands, but this retail home furniture brand is available on a global scale. They have been able to position themselves as a leader in a highly competitive industry with competing brands like Ashley Furniture Home Stores, Argos, B&Q, and John Lewis. 

IKEA is a successful company employing well over 135,000 workers worldwide. The IKEA SWOT analysis report here highlights the strengths of the brand and those opportunities available to the company in this current economic climate. This SWOT analysis also points out those identified weaknesses as well as possible threats to the continued financial success of IKEA. 

IKEA's Strengths

Some of the strengths of IKEA which have made them such a success in the retail industry for home furniture design and manufacture include;

  • A world-renowned furniture brand: IKEA is a global brand with over 600 million consumers worldwide purchasing their products on an annual basis. IKEA home furniture products are available in over 38 nations, and this company is reputed for providing impressive designs at low costs.
  • A complete understanding of what customers want and need: This is perhaps the most telling strength of IKEA. They know exactly what their customers require, and they strive to meet their needs. Basically, IKEA provides a line of home furniture products that are both aesthetic and very affordable.
  • A high sales volume: IKEA records a high sales volume on an annual basis. They are very impressive in this regard, and part of their success in recording high sales is because of their clear understanding of their customer needs. 
  • A huge collection of designs: Walk into any IKEA store today, and you will be astonished by the sheer number of designs available. What'd more, customers get to see the assembled furniture design, which helps them in making up their mind on whether to buy or not. All IKEA designs can also be disassembled for convenient, portable carriage and transportation.
  • Affordable home furniture products: This is the hallmark of IKEA as a brand. All their products are affordable and specifically designed for low-income earners.

IKEA's Weaknesses

The weaknesses of IKEA in this SWOT analysis are as follows;

  • Increasing customer distrust due to negative press: They're have been many incidents where IKEA has been portrayed in a bad light by the media. There are incidents where IKEA has been mentioned in relation to injuries and even the death of kids. 

IKEA has even been forced to recall some of its products due to accusations that they were dangerous and harmful to consumers. Their advertising style in developing countries around the world has also been criticized by analysts and industry observers. 

Employees of IKEA have been known to speak to the press about their experiences while working for IKEA. These employees complain about inadequate work conditions and salaries. Negative press can go a long way in damaging the reputation of any brand, and IKEA is no exception. 

  • Criticism for designing low-quality products: IKEA has been criticized for producing low-quality furniture. This weakness is weird because it is near impossible for any brand to have both high-quality products sold at highly affordable prices. Quality is often associated with premium prices. However, IKEA gets a lot of criticism from both customers and non-customers for the quality of its products. 

IKEA's Opportunities

There are many opportunities available to IKEA as a business. Here are a few on this IKEA SWOT analysis;

  • IKEA can expand its operations into more countries around the world: IKEA is known to be operating in about 38 nations around the world. However, they can still expand their business into more countries, especially developing countries. 

Since IKEA provides low-cost furniture products to consumers, they could explore the possibility of branching out into countries where the need for great furniture designs is high, but only if they are available at a low cost. Developing countries like Brazil, Mexico, and Malaysia are prime locations where IKEA can set up the business. These locations have a larger population desirous of low-cost furniture designs.

  • Increased focus on eCommerce: IKEA receives over 800 million visitors online every year. Many people prefer purchasing products online, and they can really capitalize on this with exciting promos and discounted deals. They can also expand their business into many more countries around the world through their eCommerce platform with affordable shipping costs coupled with low prices for their products.
  • Diversification opportunities: IKEA has also diversified into the fast-food business. They can also diversify into the grocery store franchise specializing in the provision of naturally grown, healthy foods.  

IKEA's Threats

IKEA is not exempted from exposure to external threats. Some of these threats include the following;

  • An ever-growing competition in the home furniture design, production and sale industry: IKEA is faced with even more competition in this industry. Other retail stores like Walmart are now offering affordable home furniture and appliances. IKEA is not only getting competition for their products but also their pricing too. Other companies offer similar designs, if not better, and at comparably more affordable prices.
  • Improvement in economies and increase in disposable income: With the economies of developing countries improving, the standard of living of their citizens also improves. This leads to better-paying jobs and increased disposable income. The consequence of this is that many IKEA customers in these countries can decide to buy more expensive but better quality home furniture and appliances. 

Since the business model of IKEA is to provide affordable, low-quality products, they end up losing existing customers at the end of the day. As customers see their income improve, their tastes and preferences also improve. 

Brand loyalty is really slim when quality is involved. The only reason why these customers have been loyal to IKEA for so long is that they really cannot afford not to. However, the moment their condition changes for the better, they instantly switch to buying better quality products despite the high costs.

  • The threat to product liability claims and lawsuits: Those consumers that have been harmed in one way or another from using IKEA products may decide to file a lawsuit against the company. This leads to the bad press that causes distrust from existing and prospective customers. With social media now a useful tool for promoting or crushing a brand, negative comments can go a long way toward hurting IKEA's business.  

Mind Map

Key Takeaways

This IKEA SWOT analysis report states the strengths of this home furniture brand. One of the key strengths is affordability. IKEA designs furniture for the average person. The SWOT also indicates the weaknesses of IKEA, with the negative press being a serious weakness that can hamper business. 

Also, this report shows some business opportunities open to IKEA, such as; diversification into grocery store franchise business focused on providing healthy and natural foods. Last but not least, the IKEA SWOT shows external threats to the brand, with lawsuits by customers being a major threat. 

If you found this report helpful, you can save it in PDF format for posterity. But you will require a PDF reader that is easy to use with useful features. One desktop PDF reader app that comes in handy is PDF Agile.

PDF Agile is available for download here for your Windows OS desktop computer. With this software, you can compress your PDF document into smaller files for convenient storage on your internal hard drive.

PDF Agile also allows you to convert most document types to PDF and from a PDF file to Excel, Words, and so on.

You can edit your PDF document using the highlight tool. You can resize, change the background color and even redact content if you want. PDF Agile also offers you a direct to print option with a preview page available before printing. 

PDF Agile is your number one PDF solution software for both casual and professional users. Download the app for FREE now.


SWOT Analysis of IKEA: What's the Brand's True Strength?


SWOT Analysis of IKEA: What's the Brand's True Strength?

Related Articles

Business Analysis6 Mins

In-Depth SWOT Analysis of Nike

Nike is one of the top sportswear brands in the world. The SWOT analysis of Nike highlights why the brand is a success but also states weaknesses and threats as well.


Business Analysis5 Mins

SWOT Analysis of Walt Disney

The Disney SWOT analysis highlights key strengths, weaknesses, opportunities, and threats that define the success of the brand and possible dangers hindering its progress.


Business Analysis5 Mins

Coca-Cola SWOT Analysis

Coca-Cola’s SWOT analysis provides insight into the strengths and opportunities open to this global beverage brand while also revealing threats and possible weaknesses.