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IKEA has a very low threat if any substitutes whereas h&m has quite a few substitutes in the market but due to ultimate fast pace trend in clothing and fashion industry threat of substitutes is low on the scale. In this era when recession has devastated world economies IKEA and h&m are one of those smart companies which has found an opportunity to expand and grow their business as they have analysed their potential to improve and take advantage of various fruitful aspects of the economy using their resources which have massively grown over the last decade which ultimately brings the threat of new entrants to zero.

IKEA operates in 35 countries and h&m operates in 38 countries which makes them global brands providing benefit to the local economies in terms of employment, sales, establishment and operation cost etc. therefore political factors in relation to both the companies doesn’t create any obstacles in the operations of any kind, together with sales its worth noting that IKEA and h&m have outsourced production facilities to different countries with hundreds and thousands of suppliers which are successfully operating and providing to gdp of their respected countries.