RoJon Evans IKEA SWOT analysis 1. A SWOT analysis is an acronym for strength, weakness, opportunities, and threats. This is a strategic planning tool that helps business identify and focus on key internal and external issues. 2. The difference between internal and external factors is that internal factors such as strengths and weaknesses of a company are controllable whereas external factors such as opportunities and threats are outside a company’s control. 3. IKEA has been able to minimize threats to its business through its economies of scale in the market. By being such a large company, IKEA is able to better use technology and employee specialized managers. IKEA also has a competitive edge over competition within the same market through cost savings that are passed down to the consumer. IKEA’s low pricing strategy is appealing to customers in struggling financially and also attractive to those with higher budgets through producing furniture of good quality and design. These all put up barriers to entry for other companies. 4. With the use of SWOT analysis, IKEA was able to assess and improve upon their strengths such as sustainability, brand recognition, and concept of offering a wide range of well-designed products at low prices. These have all contributed to IKEA attracting and retaining customers. IKEA was also able to identify external threats to its business growth such as changing social trends, competitive market forces, and economic factors.