Problem
IKEA's profitability depends on many factors including their competition. Porter (2008) makes the claim that we often think about competition too narrowly. He claims that firms do not just compete with their rivals, they also compete with customers, suppliers, substitutes, and even potential entrants. He outlines many different factors that influence the strength of each of the forces. While Porter's Five Forces are often seen as a tool for analyzing industries, we have discussed that the Five Forces are not always the same for each firm in an industry. For the questions below, you should look at IKEA rather than the furniture industry more broadly.
A. First, list and justify who the strategically important actors are that constitute each of Porter's (2008) five forces for IKEA. That is, who are IKEA's most important suppliers, customers, substitutes, and rivals, and what types of potential entrants can you identify?
B. Discuss the factors that influence the clout of IKEA's customers (i.e., their strength). You should outline both the factors that are in the customers' favor and the factors that are in IKEA's favor.
C. Discuss the factors that influence the strength of IKEA's suppliers. You should outline both the factors that are in the suppliers' favor and the factors that are in IKEA's favor.