IKEA Group - Five Forces Analysis

IKEA Group - Five Forces Analysis

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Intensity of Existing Rivalry

Large industry size (IKEA Group) Large industries allow multiple firms and produces to prosper without having to steal market share...
Exit barriers are low (IKEA Group) When exit barriers are low, weak firms are more likely to leave the market, which will increase the...
Fast industry growth rate (IKEA Group) When industries are growing revenue quickly, they are less likely to compete, because the total...

Bargaining Power of Suppliers

Large number of substitute inputs (IKEA Group) When there are a large number of substitute inputs, suppliers have less bargaining leverage over...
High competition among suppliers (IKEA Group) High levels of competition among suppliers acts to reduce prices to producers. This is a positive...
Diverse distribution channel (IKEA Group) The more diverse distribution channels become the less bargaining power a single distributor will...
Critical production inputs are similar (IKEA Group) When critical production inputs are similar, it is easier to mix and match inputs, which reduces...
Volume is critical to suppliers (IKEA Group) When suppliers are reliant on high volumes, they have less bargaining power, because a producer can...
Low cost of switching suppliers (IKEA Group) The easier it is to switch suppliers, the less bargaining power they have. Low supplier switching...

Threat of Substitutes

Substitute product is more expensive (IKEA Group) Please edit this page to add a description…
Substitute has lower performance (IKEA Group) A lower performance product means a customer is less likely to switch from IKEA Group to another...
Substantial product differentiation (IKEA Group) When products and services are very different, customers are less likely to find comparable product...

Bargaining Power of Customers

Large number of customers (IKEA Group) When there are large numbers of customers, no one customer tends to have bargaining leverage....

Threat of New Competitors

Strong distribution network required (IKEA Group) Weak distribution networks mean goods are more expensive to move around and some goods don’t get to...
High sunk costs limit competition (IKEA Group) High sunk costs make it difficult for a competitor to enter a new market, because they have to...
Strong brand names are important (IKEA Group) If strong brands are critical to compete, then new competitors will have to improve their brand...
Industry requires economies of scale (IKEA Group) Economies of scale help producers to lower their cost by producing the next unit of output at lower...
Customers are loyal to existing brands (IKEA Group) It takes time and money to build a brand. When companies need to spend resources building a brand,...
Entry barriers are high (IKEA Group) When barriers are high, it is more difficult for new competitors to enter the market. High entry...

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