For all kind of tactical decision which makes it is essential to consider amount of internal and external factors so a company can completely understand its position in strategic group it is situated and which could assist the brand to device strategies which could lead the business towards the success of it tactical objectives in the light of it's perspective and mission statement, following is the visual representation of the Porter's five causes model and thorough justification of ikea's and h&m strategic position in the light of the political, economical, social, scientific, legal and environmental (PESTLE) aspects in addition to a brief overview of their advantages, weakness, opportunities and dangers (SWOT) to obtain a complete hold on the understanding of the under consideration companies' history, present and future standings and shows;
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IKEA being a giant company and genuinely very affordable which ultimately reflects on its rates strategy, that leaves the customer with a very low or nil bargaining electric power Ikeas standardised procedure has always made IKEA out list the opponents which leaves the consumer hardly any choice to consider an alternative for the products and services on offer at IKEA.
Like IKEA another Swedish brand which has a great name quality and low price product range with a huge selection of designer working day and nights to keep carefully the trend of continuous improvement and variety has given a difficult blow to its rivals worldwide, due to lessen prices of the merchandise which is because of excellent supply string and production procedures control and management h&m has gained its show on the market quite perfectly with the utmost effort to expand rapidly to be able to get maximum talk about in the target market therefore leave a very low bargaining power of buyer as there sits only handful of brands which could come in competition with h&m e. g. Primark, new look etc.
Although the development is subcontracted to different countries but IKEA offers a complete hold on its procedure abroad and has a sturdy control and management system to stay in bargaining position using its suppliers, scheduled to bid system adopted by IKEA the suppliers around the globe finding themselves lucky to relate with the brand always try their level best to win the bid to get a chance to create for the marketplace head in furniture industry which leave the suppliers almost with no power to discount at any occasion
70% of the suppliers are from Asia e. g. India etc who have found themselves in an exceedingly good scale of performance independently records as credited to H&M growing strategy to expand has resulted in more items to prepare yourself at all times with the growing propensity of 15-20% each year, therefore suppliers in this time of utmost tough economy are lucky to be associated to a brand which in this time of downsizing have extension ideas which would fetch more opportunities that could be availed by thousands of more suppliers bring them don to stage where nothing of the suppliers have any bargaining power
Below average threat of some competitors in a few aspects of the industry operation and marketing combine but overall IKEA being a giant company does not allow the opponents to reach near its cost range in a similar quality habits therefore resulting in IKEA being powerful than it rivals to be a danger to them
Competitors like Primark, new look, Zara, next etc have a high concentration and hold on the market together with h&m but credited to production outsourcing therefore much variety of clothing h&m has found its own place on the market and an chance to grow and develop therefore delivering h&m to very better position to its rivals
IKEA has an extremely low risk if any substitutes whereas h&m has a number of substitutes in the market but due to ultimate fast pace pattern in clothing and fashion industry threat of substitutes is low on the scale
In this age when downturn has devastated world economies IKEA and h&m are one of those smart companies which includes found an opportunity to expand and grow their business as they have analysed their potential to boost and take benefit of various fruitful aspects of the economy utilizing their resources that have massively grown over the last decade which finally brings the risk of new entrants to zero.
IKEA manages in 35 countries and h&m operates in 38 countries which makes them global brands providing gain to the neighborhood economies in conditions of occupation, sales, establishment and operation cost etc. therefore political factors with regards to both companies doesn't create any hurdles in the functions of any sort, together with sales its well worth noting that IKEA and h&m have outsourced development facilities to different countries with hundreds and a large number of suppliers which are successfully operating and providing to gdp with their respected countries.
Recession wave nowadays in world overall economy has propagate a great deal of destruction but despite of the actual fact both IKEA and h&m has greatly became risk takers and found their spaces on the market to develop with H&M 10-15% of the enlargement planned every year is a full reflection of the intention in which brand needs to be recognized, with income soaring in conditions of IKEA it has now started to diversify a bit to be able to expand with no hesitation to be the first ever to enter into smooth pack homes in china recently.
Right from staff relation to child labour insurance policy IKEA and h&m has always given a huge mount worth focusing on to interpersonal factors and has always accounted for issues like poverty and other cultural issues, they have a very strict insurance policy towards it suppliers never to to employee any child labour presence of which may lead to cancelation of deal, both the brands also have an extremely smart plans for customer welfare and has launched loyalty cards to understand the commitment through various kinds of promotional offers to their permanent and new customers, both the brands have a dynamic involvement in charity activities and added generously
Over the previous 10 years technology has made so convenience for everyone to use in a better way whether it's a house partner or a multi national companies like IKEA and h&m, IKEA and h&m took a great benefit of technological advances occurred over the last couple of years, online surveillance of some of their development facilities with central based human tool system to regulate and monitor the most effective asset of the firms i. e. humans, well communicated promotional offers and fast designs availableness are one of the areas in which technology has performed a very important role in the success of the reputed companies.
IKEA and h&m has a very strong brand image and position in the relevant sector, alongside the goodwill they have a reputation of representing Sweden in the furniture and clothing industry, globally liked brand with standardised perspective has made IKEA and H&M to be the marketplace leader with a brilliant online marketing strategy where every country they launched they had the likability factor already made up of a fantastic degree of marketing mix used for each and every particular region of the world they went into, economies of size achieved through subcontracting the productions centres where they have got managed to lower adequate cost percentage which ultimately reveal in their pricing approach which is leaner then market average providing great confidence towards increasing sales and growing customer satisfaction
It is evident that IKEA hasn't acquired any immediate competition which has also its cons as competition always keep the marketplace alive and fascinating therefore leave almost no choice with various visitors to not to avoid IKEA towards any brand, but on high street level opponents like Argos and john Lewis have were able to pick up their market talk about as IKEA being really big in how big is its establishment cannot be accommodated on the traditional level where Argos has perfectly explored the distance and has turned into a bit of a threat to IKEA together with other like dfs and local furniture vendors which are not really considered a risk but surely considered, as well as that a difference in high end market is also been dealt by IKEA with a different name called habitat but despite of that still lacks focus on custom made handmade furniture area in the market, IKEA is not also very famous in seniors due to smooth pack approach used the brand, one of other weakness is its limitation for the administrative centre inflow credited to it being privately had and in the long run the scale which is of some hindrance at time when customers with no conveyance find it unapproachable as IKEA store are situated in outskirts of places to ensure lots of space is available for a huge blue stop!.
It has one of the advantages which could be hurdle sometimes which is bulk buying, it is surely a hindrance as everybody knows H&M being truly a risk taker will buy in bulk with the motive and assumption to market everything in the long run which could fail due to tons of uncontrollable externatilitites and could have direct adverse influence on the business's business in both brief and permanent, therefore well-timed sales are incredibly essential and may really be in charge of big drop in the performance, another weakness is the men's range that includes a age group limit in its range which skips an enormous industry sector which is children and small children range for guys baring great potential, different variety in various stores which is available quite bothersome if a person is after certain specific product and must visit more than 4 branches on the same traditional.
IKEA and h&m are broadening in an exceedingly smooth way worldwide from chine to Western region and from Israel to Parts of asia both the businesses have captured a handsome talk about in the global markets of their relevance, smaller stores for IKEA is a great possibility to explore as well as designer furniture which displays a gap in the market ready to be explored by IKEA where as h&m kids clothing range could be expanded more to repay unexplored areas, considering h&m competition stores like Zara and difference have competitive border over H&M because of brand image and quality criteria which can be an opportunity for H&M ready to be explored to get better share in the market.
Both the brands are confronted with various sorts of threats which range from high power to low level, for instance both labels although being excellent in what they are doing have competition to provide for and overcome any hurdles as a consequence of it, rising prices due to vat increases would definitely have an effect on the low price image of both the brands as well as increasing duties of shipment could have a direct affect on the price tag on production and in the end price to last consumer would grow, risk of duplicate cats to follow the trend released by the brands and offered on the market to talk about the go back of the original concept which also offers a legal facet of it as well but still there is placed various gaps in the market which is solely filled by grey market which are absolve to operate in the marketplaces which are not been explored by the brands in a variety of parts of the entire world.
IKEA and H&M both have a very effective strategies for next 10 years, right from growth and development in market talk about to customer commitment and satisfaction both brands pressured a great deal on anticipation of all the relevant aspects of externatilities in order to get complete control over their future functions and strategies, changing quotas and tariff systems are being expected as well as factors like opponents, substitutes, new entrants on the market with increasing volume of suppliers throughout the world to provide efficient output. Need for any change is also predicted and in the light of vision and objective of the reputed brand strategies are developed to help run the businesses smoothly in the next decade. Ikea's and H&M strategies so far are noticeable that in coming years they have great potential to innovate more principles and explore more specific niche market markets like ikea's smooth pack residences launched lately, and their current strategies are quite expressively emphasizing on the need for training and development of their employees for long term profitability, evaluation of current position of all the political, legal, public, technological and environmental evaluation done in prior paragraphs are simple reflection with their futuristic motive to grow and become the best on what they do in the relevant market segments. It's very vital which is also been accepted and applied in both the companies the necessity for change management in action promptly to face any type of change issues successfully is very effective.
Game theory is a representation of an expert active strategy towards any type of changes appear in the surroundings which brings about change of strategies already prepared for this period of time and for a particular aspect to be able to suit and favour the entire goal of the company, very smart technique to change the strategies according to the situation before its too later, IKEA and h&m employ a systematic approach towards change management
Between IKEA and h&m you should in the competitive edge scenario IKEA wins the race probably being in an exceedingly suitable place in its relevant market with competition to face straight where H&M has a list of several competitors in the market to keep it active all the time, there are various other edge which IKEA might well have on its opponents like difference of labour market, industry features which is more favourable to h&m due to its fast pace industry, capital resources available to IKEA are more on more impressive range considering its size as compare to H&M establishment as H&M doesn't own any place for its retailers which even though effects its operating cost but gives an good thing about no frozen cost any place in the complete process, how big is the outlets has also their benefits and drawbacks as well, more opportunities for IKEA being truly a market leader as compare to H&M which is bounded by strong opponents giving very less chance to consider big hazards.
to offer an array of home furnishing components of good design and function, excellent quality and durability, at prices so low that almost all of people can afford to buy them
Considering the PEST and SWOT evaluation done recently the strategies adopted by both organisation has an extremely profound reflection of these vision and quest statement, ikea's vision has a cultural aspect expressing from it which automatically attaches its routes with the provision of low price products with excellent quality and background is apparent IKEA has performed perfectly in satisfying its eye-sight and is still have a great focus on its key unique selling point that is low prices which through eyesight has ultimate influence on the well being of the consumers who shows their trust on the brand, following the vision the quest assertion of IKEA again has expressed a deep matter about providing a customer a variety of products with quality criteria which as everybody knows is still the advantageous edge IKEA have over it opponents. H&M on the other hands has come up with an exhibition of its leading edge in the market that it possess and has shown that in its perspective, the trendy brand with low charges strategy has paid big time by allowing it to gain a good share on the market with increased goodwill around the world, Infestation and SWOT evaluation are evident that company has certainly done very well for itself and everything the stakeholders, low price strategy in this time of tough economy has its brilliance and this as well as quality guarantee from a socially responsible brand is a fantastic exemplory case of inspirational brand name.