Faculty of Business, Economics & Accounting

            Department of Business Studies9


HELP Bachelor of Business (HONS) Year 1 – HUBBU

Subject                :  MGT 101

                               Principles of Management

Subject Lecturer  : Puan Norzan Abdullah


Name:  Katherine Yong Yee Hwa        B0903100

         Lee Hwee Ching                B1001467

        Wong Sies Nee                B1000546

        Chong Shu Yi                        B1000735

        Chong Ke Wei                        B1001019



IKEA is one of the world's top furniture retailers. The company offers customers a wide range of nearly 10,000 Scandinavian-style products from housewares to leather sofas and from plush toys to curtains. IKEA has ability to sustain the strategic competitive advantage to the road of success through few factors such as the cost leadership strategy where their attention are directed towards minimising costs to operate more efficiently than the competitors. As a result of their majority of furniture is flat-pack, their costs and packaging can be reduced. Besides that, IKEA is success through their wide expansion of market because IKEA now has 37 stores in the U.S. and more than 300 IKEA stores in 38 countries. Furthermore, the low price is affordable to everyone and is reasonable with their high quality and stylish products. IKEA has always been social responsible through environmental goal setting. IKEA concerns for the environment by increasing the use of recycled and reusable materials, waste reduction, etc. Its socially and environmentally responsible approach to business is recognised as a benchmark for retailers around the world.

Question 1 : Perform a SWOT analysis


SWOT analysis is the analysis of the organisation and analysis of its environment, the internal analysis of organisational strengths and weaknesses as well as the external analysis of environmental opportunities and threats. It is the initial stage of planning and helps producers to target issues. Strength is the capability within the organization that provides a competitive advantage in the market whereas weakness is any existing or potential force which could serve as a barrier to maintaining or achieving a competitive advantage in the market. On the other hand, opportunity is any existing or potential force in the external environment that, if properly leveraged, could provide a competitive advantage. Last but not least, threat is any existing or potential force in the external environment that could erode a competitive advantage.

The first part of SWOT analysis is covered by strengths.

There are five points of strengths which IKEA hold. First of all, brand recognition. IKEA is an internationally known brand and is a strong global brand which attracts key consumer groups. It ranges worldwide and promises the same quality. Since IKEA was founded in 1943 and had 253 stores in 24 countries, it has a strong brand awareness. Everyone knows about IKEA.

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Secondly, IKEA’s strong concept and clear vision. IKEA has its clear vision which is “to create a better everyday life for many people” and its concept focuses on simple, low cost, stylish and functional products. It reaches an ideal balance between function, quality, design and price. They not only taken into account of good functions and high quality products but also well and modern design as well as low price to attract customers.

Furthermore, IKEA enjoyed the economies of scale. IKEA bulk buying of materials that stem from operating on a large scale and maintained long-term relationships with the suppliers ...

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