The business that affect the business, and it has no control over them
External influences are factors outside of the business that affect the business, and it has no control over them.
Ikea have got many competitors nearby but this does not have a major affect on them as they are constantly competing on prices, quality, availability and their product range. They have got many different competitors selling the same types of products as them; their main competitors are B&Q, Homebase, Argos, DFS, and Toys R US. These businesses are in similar markets and have a similar kind of product range as Ikea.
With Argos Ikea mainly compete on furniture and DIY goods, which are quite similar to Ikea’s products. DFS are also competitors of Ikea; with DFS Ikea compete on different types of furniture ranges. Toys R US are competitors of Ikea as well, Ikea compete with Toys R Us on ranges of children’s toys. Ikea compete with B&Q on furniture and DIY products. With Argos Ikea compete with most of the items that they sell. With Homebase Ikea mainly compete on their ranges of DIY goods. Ikea’s biggest selling point is their great value for money deals as well as their quality products.
Economic conditions look at the factors, which may affect people’s spending
The number of people unemployed in the UK is very low. This affects Ikea because if the rate of people unemployed is very low it means that Ikea may find it difficult to find workers for their stores. As well as gaining extra customers as people will have less money available to spend, so therefore they won’t be looking to purchase furniture. At present interest rates in the UK are very low, this a major benefit to Ikea because if interest rates are low, it means that customers have more money available to spend and if they buy on credit they are paying less cash in interest on top of the cost.
For Ikea getting money is no problem they don’t have to borrow money from any banks for the reason that they have got their very own company bank, so if an Ikea store needs to borrow any money, they borrow it from their main bank. This is a very good thing as the money stays in the business and no interest is charged.
Exchange rates play a major part in the running of Ikea; this is because Ikea are an international company. They rely on the exchange rates in order to get money back into business. If the exchange rates were increase this would be very good for Ikea and they will be very well off. But if exchange rates were to decrease, it would lead to a downturn in Ikea’s profits and affect their sales.
Environmental constraints are laws and regulations that businesses needs to follow in order to ensure that they’re not harming the environment.
Ikea are a business that are very environmentally friendly and try their best to try and keep the environment free of any harm or destruction. Ikea aim to help protect the environment, they try to do this by using only wood or wooden fibres because wood is renewable, recyclable and biodegradable, but only if it originates from well- managed forests.
Ikea also try to recycle many of their products because they try to re-use the parts of recycled products in order to make new products to sell in their stores. Ikea try not to waste any of their products, instead they make good use of products which are not bought and recycle them in order to develop new products which will sell.
They also sell damaged products, at very cheap prices in order to make some money as well as to ensure that their products are not going to waste. These products are sold at cheaper prices in order to get rid of damaged and unwanted stock.
Lansing Linde compete on the following items-technology and innovative products, they compete on technology by making sure that their products are up to date with today’s technology and they compete on innovative products by creating new, exciting top of the range products.
They are market led and carry out a vast amount of surveys and gather information from people who are likely to buy their products. They compete on customer relationships and try their best to keep their customers happy. Lansing Linde are very customer orientated, they adapt and design forklift trucks to suit their customers needs.
They also compete on after sales services which are mainly to do with the repair work of the trucks, they have specialist engineers who have got the knowledge and are on 24 hour call outs.
In order to keep going Linde have to borrow money from banks in order to ensure that they are still in business. Lansing Linde has not got their very own bank like Ikea, therefore when they borrow money they are stuck with having to pay back the borrowed money but with interest on top. This amount varies depending on the level of interest rates.
Buying materials for their forklift trucks, Lansing Linde are very dependent on the exchange rates, as they buy most of their materials from abroad. As a result of this Lansing Linde rely upon the pound to be stronger rather than weaker. If the pound is weak they are going to get less in exchange for it, but if it is strong they will get more materials in return for it.
As there is low employment in the UK at the moment there is more demand from the existing work force to complete construction of houses for example and deliver products of a really high standard. There is also more demand for their products so they have to work hard to ensure that their products are up to the standard of what is required from them.
Lansing Linde tries to make sure that they are following the rules while they are carrying out work and handling their forklift trucks, they also try to make sure that any unused parts are recycled and used in newer products. They must also be careful with the fuel that they use to power the trucks so that their trucks aren’t causing major pollution when they are being operated. They must also ensure that the machinery is safe for their customers so that accidents and injuries can be avoided. Linde must also be very thorough and carry out many tests before they market their products.