In business and economics, gap analysis is a tool that helps a company to compare its actual performance with its potential performance. At its core are two questions: "Where are we?"and "Where do we want to be?". Gap analysis is a formal study of what a business is doing currently and where it wants to go in the future.
The Swedish furniture-retailing phenomenon Ikea had by theturn of the century grown from a tiny mail order business to a $5.8 billion multinational concern.5 In 2003 and in uncertain economic times, the company was still opening new stores. The effect thatIkea’s 1986 UK arrival had on the furniture market is illustrated by the following anecdote. A Habitat employee, interviewed by the BBC, described how before Ikea’s arrival, Habitat employees wereushered into a darkened training room. Suddenly, the slide projector clicked on and the sales manager described in solemn tones how ‘this blue and yellow monster’ was going to arrive from Sweden and taketheir business. Ikea subsequently acquired Habitat, probably its closest UK competitor.
IKEA is a major competitor in the home furnishing and home goods industry with operations in more than 30countries and maintains operations spanning 230 locations. IKEA’s unique brand identity in the home furnishing industry involves around its unassembled products that require consumer assembling.According this present research IKEA’s products, while being fair-quality and low priced in nature, do suffer a quality image relative to market competition.
One method that has been hypothesized in thisresearch to improve quality and price image is to implement a limited warranty strategy on all its furniture items which would cover all its products for a period of 120 days. Relative to productplacement or distribution, IKEA can also offer an optional deliver and setup serve for all of its furniture products. The only negative of this last placement strategy is that the IKEA warehouses will...