Introduction
Starting the analysis of IKEA, it is critical to investigate the sector in which it works, its basic peculiarities, competitors, and characteristics of the target audience. First of all, the brand can be characterized as a multinational group that designs, manufactures, and sells ready-to-assemble furniture, home accessories, kitchen appliances, and other goods that can be used to decorate or improve dwellings (Vision and business idea n.d.). At the moment, IKEA holds leading positions in the world as the major furniture retailer, and the tendency preserves in the UK because of the popularity and recognizable image of the organization. It is focused on young and fashionable consumers who follow modern trends and will buy offered products (Vision and business idea n.d.). The focus on this target audience presupposes the adherence to a particular model and stylistics to preserve the high level of interest towards the proposed goods.
PESTLE
To better understand the current position of IKEA, PESTLE analysis should be performed as it provides an opportunity to consider multiple factors impacting the firm at the moment (Berry 2015).
Political
The political factor should be considered a significant force affecting the further development of the brand. The fact is that IKEA is a global company that functions in many states across the world. For this reason, to remain within the legal environment of the UK, it has to consider the existing taxation rules and demands to companies that are accepted in the country (Gamble, Peteraf & Thompson 2018). At the same time, export, import, and other significant laws should be taken into account. Nevertheless, at the moment, there are no significant barriers in the country that might have a negative impact on the further evolution of IKEA as it acts in accordance with the regulations established by the UK government. The stability of the state and its laws can serve as a beneficial factor promoting the further improvement of the brand’s position in the area.
Economic
IKEA has to consider the current economic showings of the state in which it wants to operate, such as economic growth, inflation rates, stability, unemployment, and individuals’ income. For this reason, it’s functioning in the UK can be taken as a desired option because of the reliability of the state’s economy. At the moment, it is one of the world’s most effective models characterized by high trustworthiness, stability, and interest (Evans 2019). The currency, Libra, is also recognized as a potent financial tool that can be used at the international level (Venkataraman & Pinto 2017). Citizens of the UK have a stable and comparatively high income, which means that their bargaining power increases. That is why the given factor should be considered beneficial for the future success of the brand.
Social
This aspect represents current values and demographic characteristics of the population that impacts their decision-making and buying preferences. Analyzing this factor, one can observe the beneficial situation for IKEA’s development. Today, people in the UK are conscious of a particular lifestyle that will emphasize their individuality and specific attitude to decoration (Evans 2019). For this reason, the popularity of the brand in the country remains high and even increases. IKEA meets the current demands of community members for unusual, creative, bright, and affordable furniture that will help to self-actualize and make dwellings look unique. That is why the firm’s marketers can succeed in attracting new populations and increasing sales by emphasizing the ability to adhere to a particular lifestyle when buying IKEA’s goods, appliances, or other products (Kotler, Kartajaya & Setiawan 2016).
Technological
IKEA recognizes the critical importance of technological factors for its performance and success. As it has already been stated, it is focused on the promotion of its products among the representatives of the young generation who appreciate unusual and innovative solutions. For this reason, the company invests a significant amount of its funds in the development of technology incentives that would help to create new products looking even more attractive to the youth because of the combination of various aspects (Inter Ikea Group 2018). Additionally, IKEA constantly launches new lines that combine the freshest perspectives on design, furniture, and sustainability with the primary aim to meet the diverse demands of its customers. For this reason, technology can be considered a facilitator of the brand’s further evolution.
Legal
There are several issues that IKEA should monitor to avoid the emergence of legal claims. First of all, it should create appropriate working conditions for employees belonging to facilities placed in the UK to ensure that they meet the existing demands (Inter Ikea Group 2018). The brand emphasizes the fact that no child labor or any other illegal forms of exploitation are utilized, which means that there are no discrimination or employment laws that can be associated with its functioning and further development.
Environmental
IKEA also tries to achieve high sustainability levels. In accordance with its reports, the company uses only safe and clear raw materials to create its products (IKEA facts and figures 2018). It means the absence of possible claims regarding the deterioration of clients’ health. At the same time, the brand invests in the development of renewable energy in poorer nations to meet their demands for it (Inter Ikea Group 2018). Creating solar and wind panels, the company wants to replace traditional sources with renewable ones, which becomes critical regarding the increased demands for sustainability. These factors show the focus on the promotion of various environmentally friendly approaches that improve the brand’s image globally and contribute to its becoming a leader in this sphere (Kotler & Armstrong 2015).
In such a way, the given PESTLE analysis shows that the position of IKEA in the UK remains stable. It apparently possesses a particular competitive advantage over its rivals because of the absence of certain negative factors that might limit its further development and evolution (Kotler & Keller 2015). For this reason, one can predict the future empowerment of the firm and its dominance in the selected market segment.
Reference List
Berry, E 2015, Pestle analysis essentials, CreateSpace Independent Publishing Platform, New York, NY.
Evans, I 2019, ‘UK consumer behavior: what do the British want?’, WordBank, Web.
Gamble, J, Peteraf, M & Thompson, A 2018, Essentials of strategic management: the quest for competitive advantage, McGraw Hill Education, New York, NY.
IKEA facts and figures 2018, Web.
Inter Ikea Group 2018,Inter IKEA Group financial summary FY18, Web.
Kotler, P & Armstrong, G 2015, Principles of marketing, 16th edn, Pearson, New York, NY.
Kotler, P, Kartajaya, H & Setiawan, I 2016, Marketing 4.0: moving from traditional to digital, Wiley, Hoboken, NJ.
Kotler, P & Keller, K 2015, Marketing management, 14th edn, Pearson, New York, NY.
Venkataraman, R & Pinto, J 2017, Operations management: managing global supply chains, SAGE Publications, Boca Raton, FL.
Vision and business idean.d., Web.