Rodriguez Christina WK4 PESTEL

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Factor Affecting IKEA
Description
Political
The level of political stability within markets
The level of corporate and consumer taxation
Relevant tariffs and trade restrictions within individual markets International and European trade regulation
Consumer protection legislations
Economic
Overall and industry-specific economic growth in markets
Currency exchange rates in local markets
Labor costs in each individual markets
Inflation rate
Market trends
Social
Changes in demographic variables
Lifestyle changes
Fashion trends in local markets
Local cultural factors in markets
Buying patterns of consumers
Technological
The emergence of new industry-specific technologies
The level of funding in industry researches
The level of potential for technological innovations
Innovations in information technology to drive down costs
The use of energy and associated costs
 
Environmental
Climate changes
Strong Corporate Social Responsibility in IKEA’s culture
Various tax & tariffs
Legal
Legal policies and trading regulations (SAFTA, APTA)
Further expansion into developing economies (Brazil, Mexico, Indonesia, Malaysia)

Christina Rodriguez

BUS 411: Strategic Planning

Homework #3

IKEA: PESTEL

Political
As part of the national or global trends and changes, IKEA is just one example of firms that are successful in both domestic and international business. The Swedish furniture retailer has found the Scandinavian style of furniture that was combined with “do-it-yourself” flat packaging became popular and set a global cult brand (IKEA 2013).

Economic
Retail markets grew by at least 5% on average in emerging markets in the last year, opening huge opportunities for IKEA’s revenue growth (IKEA, 2013). The company currently operates in most of the developed economies but hasn’t firmly stepped into developing economies, except China. The Company, due to the economic changes and trends have adopted different kinds of strategies...
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