Business Finance
Porter's model

Question Description

Apply Porter's model to Ikea company. I attached a file containing the instruction and the questions.

please follow the instruction carefully and answer all the questions

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Apply Porter's model to Ikea for the industry analysis utilizing porters Step 1. Gather the information on each of the five forces Use one of the many templates on porter’s/ competitive analysis to assist with this assignment. Some modifications will be necessary to customize for this class: Information Systems. Check the researched information against some of the factors listed e.g. under the threat of new entrants “How much capital is required to enter this market? Step 2. After gathering all the information, analyze the results, what impact does this force have? Sample: Porter’s five forces worksheet Name of force: e.g. Threat of New Entrants Threat of New Entrants is High/Low if (use ranking List your reasons to support your conclusion (this must be based on facts, so please ensure you can refer to your sources) Are there any opportunities? (opportunities are used to lessen the threat level or give you an advantage you did not consider before) How does Information Systems affect this force? Continue for each of the five forces Once complete Step 3.Summarize your findings, make recommendations. Formulate strategies based on your findings. Create a table summarizing the forces? Summary of Forces Threat Threat of Substitutes Ratings Role of IS (scales may vary e.g. 1- How 5; low-high) Competitive rivalry Which opportunities should the company embark upon? Create a table summarizing the opportunities Opportunities How Ratings Role of IS How? Which forces pose the greatest threats? Where are the company’s greatest opportunities? What are the main drivers of competition in this industry? Based on your analysis, can you suggest a competitive strategy(ies)? Gather at least ((10 reference sources)) In addition to google searches, here are some possible sources of information. Please ensure you use a mixture of primary and secondary sources. Annual report & accounts Newspaper articles Analysts’ reports CEO interviews Regulatory /Government reports Presentations / speeches Pricing / price lists Press releases Promotions Advertising campaigns Recruiting ads Competitors’ documents ...
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Final Answer



Porter Five Forces Analysis on IKEA



Porter Five Forces Analysis on IKEA
IKEA is Swedish company which deals with selling of home accessories and furniture
and is one of the world largest home-retailer (IKEA Website, 2015). The growth of the company
is also attributed to the low prices of its products which are offered through its business model
which is coupled by the Eco-friendly and well- designed products making the business ideal to
the growing number of customers. With the increased level of competition in the industry
primarily from other international businesses and the enlarging market globally, IKEA has been
able to sustain the competitive advantage that it enjoys. According to Porters (2008), he depicts
that the five forces model it would help in focusing how the company has been able to withstand
the increasing level of completion and to hold the competitive advantage it enjoys. These forces
include Threat of entry, bargaining power of buyers, bargaining power of suppliers, Threat of
substitutes, and Rivalry among existing firms.
The Threat of New Entrants
In the industry that IKEA operates there exist a low threat to new entrants in the market
of selling furniture's and fitting business, and this is due to the high investment of capital
required to operate in the industry (IKEA, 2015). The other reason for low new entrants is due to
the saturation of the market and the requirement of the skilled labor force to ensure production of
quality goods for the consumers. IKEA also enjoys a global market which makes it difficult for
the company to get a competitive firm due to the company discounted values and the many stores
it possesses. Due to the inability for new entries in the industry, this has provided IKEA with an
opportunity to continue expanding its products globally and increasing the number of IKEA
branches globally. Information system affects this force in that due to the low entry of the firms



in the industry many firms have gained this information...

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