Legal issues have a huge impact on an organization`s growth. Ongoing litigation and/or multiple court cases create a negative image. PESTEL analysis IKEA lists the legal problems that should be identified and solved by the company: after a detailed study of the IKEA Pistill analysis, we came to the conclusion that legal problems are the most dangerous of all. The company should focus on producing quality products, improving the delivery system, and responding to complaints from dissatisfied customers. As of November 2018, IKEA was present in more than 52 countries with 424 points of sale. This huge global presence means that IKEA is exposed to ram forces. There are many external environmental factors such as political, economic, social and technological and many other factors that influence brands and companies. Another notable example of the impact of political factors on IKEA is its doll named Lufsig, a Swedish word for “clumsy”. Although the translation of Lufsig into Chinese is no problem, Lufsig resembles the offensive term “mother`s c***” in the Cantonese dialect. IKEA`s sales depend on the political situation of the market and various political factors such as the government`s attitude towards the brand and political stability. Other political factors that may affect IKEA`s business include the level of bureaucracy, the level of corruption, domestic lobbying and import restrictions in the markets where the global furniture retailer operates. The macroeconomic situation and the purchasing power of consumers is one of the most important economic factors influencing the performance of IKEA as well as that of a company. The global economic and financial crisis of 2007-2009 is a clear example of the impact of the external economic factor on companies.
However, it is important to note that the negative impact of the crisis on IKEA has been less compared to many other companies due to the company`s cost leadership strategy. Although IKEA had to cut 5,000 jobs, sales fell by only 1% in the second quarter of 2009. You can easily find your country, major offers and interior design on www.ikea.com. The Ikea website can also help you find a store near you. If you are a housewife or hate going out in traffic, you can place an order online, which is also very easy and convenient. IKEA also strives to achieve a high level of sustainability. According to its reports, the company uses only safe and clear raw materials to manufacture its products (IKEA facts and figures 2018). This means the absence of possible complaints regarding the deterioration of the health of customers. At the same time, the brand is investing in the development of renewable energy in the poorest countries to meet their demand (Inter Ikea Group 2018).
In the production of solar and wind modules, the company wants to replace traditional sources with renewable sources, which becomes essential given the increased demands for sustainability. These factors show that the focus is on promoting various environmentally friendly approaches that enhance the brand`s image globally and help it become a leader in this field (Kotler & Armstrong 2015). So many people know that homosexuality is legal in Russia. But the majority of the public doesn`t think that`s fair. When IKEA in Russia featured a photo of a lesbian couple in its catalog, it got a lot of criticism. This is because such publicity sends a bad image of the country abroad. Although the company later removed the image; But it has also been criticized by advanced countries. [2] Bradford, H. (2013) Huffington Post, available at: www.huffingtonpost.com/2013/03/18/ikea-secrets-horse-meat_n_2411475.html Environmental factors are the external factors now associated with sustainability, and every company should focus on its environmental concerns to remain sustainable. In this way, not only are costs reduced, but the image of the Ikea brand is also improved. IKEA has invested in the climate by investing $1 billion in renewable energy. The company also strives to ensure that its corporate energy is completely renewable.
This can be achieved by investing in wind and solar panels. In addition, the brand is also relocating its materials such as cotton and wood to come from sustainable sources.
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