PESTEL Analysis - IKEA

Extract

[...] Environmental Globally consumers are becoming more environmentally conscious, to this end, Ikea has invested more than billion towards renewable energy in poorer nations. They are also aiming to make all of their in-store energy fully renewable by installing solar and wind panels, which has already helped to reduce their carbon footprint by while sustaining a 6.5 sales growth, according to the FY19 report. In-store they are phasing out the use of single-use plastics in their restaurants, cafes and home furnishing range. [...]

[...] Pestel Analysis: Ikea A. Political One of the political challenges faced by the company is the need to adhere to laws and regulations in all of the countries where they operate. The political and economic stability of a country has a direct impact on the profitability of companies that trade in that region. The main political factor affecting Ikea would be government controls on the import and export of foreign goods. Over the last few years, countries like India and China have become more open to international brands expanding in the Asian markets, this has created a huge opportunity for companies like Ikea. [...]

[...] The company has found itself in the press on many occasions due to faulty products resulting in the customer's injury or death from fallen or tipped over products such as bookshelves, chests and drawers. The company at one stage recalled more than 17.3 million units and consumers were offered a refund or kits to secure the units to the wall. In January 2020 the company was ordered to pay a record US$46 million settlement to the parents of a year-old who was crushed to death in 2017 when a Malm dresser fell on top of him. This followed on from three similar lawsuits which cost the company US$50 million in 2016. [...]

[...] Pestel Analysis: Ikea I. Introduction A. Ikea Ikea is a Swedish-based homeware brand founded by Ingvar Kamprad in 1943. The name Ikea is derived from an abbreviation of the founder's name, Ingvar Kamprad, and the village in which Kamrad he grew up, Elmtaryd, Agunnaryd. Kampard passed away in 2018 but not before fulfilling his dream of creating a company which manufactured and supplied affordable, stylish and modern furniture and homeware. Originally Kamprad started by selling furniture from local manufacturers, by 1955 many of these manufacturers started boycotting Ikea due to their low prices, forcing him to embark on in-house design and manufacturing to meet his customers' demands. [...]

[...] Ikea confirms that all four of their rug suppliers in the region adhered to the IWAY standard practices which refuted this claim. The company has also received many one-star reviews, it would seem that most complaints were regarding ordering online and customers either never received their products or only received them after a very long waiting period. While these issues could be attributed to bad service from delivery companies, Ikea needs to address this as it is their name on the packages. [...]