Importance of Forming Vision and Mission

Running head: MANAGEMENT
MBA Assignment
Name of the Student:
Name of the University:
Author Note:

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Introduction:
The essay provides an insight to the IKEA concept through analyzing importance of the
mission and vision statement and the SWOT analysis. IKEA represents a European firm that
design and sell knock down furniture, home accessories and kitchen appliance amongst other
occasional services and useful goods. The company was found in the year 1943 by Ingvar
Kamprad and went on to become one of the biggest retailer of furniture since the year 2008.
IKEA is a private firm that is owned by the Inter IKEA Systems B.V. which is registered in
Netherlands and controlled by Ingvar Kamprad, the founder (ikea.com 2019). The company is
famous for the modest designs of various kinds of furniture and appliances while its work related
to the interior design work remains associated with the eco-friendly simplicity. The firm is
known for its operational details, cost control and continuous development of product that
allowed the company to lower the prices by close by two to three percent. The group has a
complicated corporate structure and is controlled by various foundations located in Liechtenstein
and Netherlands.
The essay through an analysis provides an insight into the mission and the vision
statement of IKEA concept along with a Strength, Weakness, Opportunities, Threat (SWOT)
analysis.
Discussion:
Importance of Forming Vision and Mission Statement
The vision statement is usually used for describing future state of an organization. It is
what an organization hope thinks of becoming in future (Hattangadi 2015). It represents long
term goal that provides a direction for an organization. It also communicates purpose of an

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organization to employees and the stakeholders thereby providing them an inspiration for
achieving the purpose. Put differently, the vision statement of the organization represents the
future or upcoming desire that is valid and must go on and never change with every cycle of the
organization.
On the other hand, mission statement provides a description to the present state of the
organization along with its objectives and goals (Babnik et al. 2014). It provides in detail
information regarding what an organization does, the way it does and for whom it is doing for.
Unlike vision statement, it has a short time nature. It is however related to vision statement in
outlining the primary goals which will enable an organization in achieving the future desired by
an organization. In other words, the mission statement focuses on the advantages offered to
consumers as well as patrons. It also discloses the particular purpose of the organization.
Nevertheless, the importance of the vision and the mission statement is described in the
following paragraphs.
A noble mission statement is the outcome of success of an organization (Williams,
Morrell, and Mullane 2014). It is vital for companies in finding out ways and ensure regular
confirmation on whether the company or the organization remains on the right track. The
purpose of mission statement of an organization lies in aligning the people and merge all
individual activities in group. It also informs the employees of the organization whether the work
they do is worthwhile or important. A strong statement is also able to describe importance of the
work to an organization. It can bring about a change in the thought process for improving the
organization and providing ancillary customer level service to customers. Mission represents the
value that reflects the change within an organization (Kickul and Lyons 2016). The mission
statement of an organization puts across the primary objectives and the purpose. The key

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function of the statement lies in the evaluation of the key business and the success of the
company along with stockholders and the team leaders.
The aim of the vision statement lies in defining the purpose of the company. This
statement does not measure bottom line but it measures value of a company (Plan 2015). In other
words, this statement helps in communicating the values and aims of a company. It provides
direction to employees on how they are able to their best service to the customers.
Thus, the mission and the vision statement have the benefit of aiding the company in
achieving where the company want to reach. These statements are also helpful in focusing what
needs to be done and what should be done. The mission and the vision statement provides higher
energy for attaining or setting the goal (Calder 2014). In this regard, it can be said that a mission
without a vision is nothing. Mission statement puts forward a proper aim and activity of a
company which is vital for the vision. In other words, mission statement acts as the North Star
thereby providing a direction to the organization while vision statement the goals that needs to be
reached through this direction. The aim of both the statements lies in addressing and achieving
the major and vital goal of the organization. Therefore, without a proper mission and vision
statement the company is unable to achieve its goals. Hence, such statements are formulated
within the company.
Another key benefit of mission and the vision statement lies in defining the strategic plan
of a company (Rajasekar 2013). Thus, these statements possess acts as propellant for the
company in future. These statements are helpful in communicating and guiding a company or an
organization. Besides, these statements also allows in properly aligning resources of the
organization through attaining a successful future.

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It can also be said that the mission statement provides an organization with an effective
and clearer guide for, making decisions while vision statement ensure proper alignment of all the
decisions in accordance with what the organization aims in achieving (Wheelan 2014).
These statements finds a mention in the corporate strategy and is accessed through
culture and core values. The mission statement defines the current position of the company while
the vision statement portrays where a corporation might head in the future. These statements
provides the focal point that aids in aligning every individual with an organization thereby
ensuring that every single person is working towards single purpose. This also aids in increasing
the productivity and the efficiency of an organization. The vision and the mission statements are
key tools of strategic planning that aids in shaping the strategy to be used by the organization in
achieving desired future.
Possible Mission and Vision Statement of IKEA
IKEA holds the reputation of a reliable global marketer and designer of ready-for-
assemble accessories10. Since its existence, the company has been constantly trying to diversify
the kind of products offered to customers along with aim of carrying out expansion in various
territories. The success factor of IKEA has primarily been due to its practical and specified
vision and mission statement. They emphasize on fulfilling the customer needs via better
services which is considered one of the factors that stimulates loyalty amongst client base
(ikea.com 2019).
The impact of both vision and mission statements with respect to IKEA’s positions
portrays their criticality in a furniture industry (Morsing and Roepstorff 2015). The corporate
vision remains more inclined towards describing the future with which the company plans to get

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associated. This is similar to the achievement of target. While the mission statement helps in
identifying particular approaches that will direct the company toward a particular vision.
However, in case of IKEA, both the vision and the mission statements emphasizes more on the
transformation of the company which it strives to undertake by taking the customers through its
products and service. On the other hand, the vision statement seems more specific and it implies
that IKEA is a part of day to day living for the customers. The company has always lived up to
meeting furniture needs of customers (De Roeck, Maon and Lejeune 2013). This commitment
also helped in guiding IKEA’s business strategy of which is also one of the reasons behind its
rapid growth.
The possible mission statement of IKEA is “offering a wide range of well designed,
functional home furnishing products at prices so low that as many people as possible will be able
to afford them” (Butov 2017). Although this do not represent a certified mission statement
nevertheless this mission statement can remain consistent with corporate mission statement and
describe how IKEA seek in converting its vision into reality. The company also puts across a
message thereby making it evident that it offers customers some of the quality products at the
most reasonable prices. Thus, the implicit mission statement of IKEA comprises of the below
mentioned components. This includes:
 Unique products
 Reasonable prices
 Greater Expectations
The key feature that remains close to IKEA’s reputation is the unique products that remains
incomparable with others in market (Abrahamian 2013). Over decades, IKEA adopted the skill

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of designing extraordinary furniture along with related products. Integration of the sophisticated
technology with the plants has provided an edge over competitors. For example, the company
puts across an exhaustive range based on customer choice. A customer can choose from home
products for the kids and babies, rugs, bathroom appliance and makeover for revamping their
home (ikea.com 2019). Besides, it also offers tailored customer service for meeting the needs of
each customer.
Another component of the mission statement emphasize on IKEA’s pricing strategy
(Hinterhuber and Liozu 2017). The company opts for the most affordable quotations for its items
in order to ensure that it is able to serve all customers irrespective of social status. Instead of
prioritizing bigger margins of profit it becomes clear that IKEA concentrates on the economies
of scale. This provides an explanation on why the company expanded into the global regions
including UK and the Germany. IKEA goes beyond its limit in order to bring along the feel good
factor for the customers which is being portrayed in last component of its mission statement. For
example, the company is always up to some discounts for the customers.
The possible vision statement for IKEA is “to create a better everyday life for the many
people.” (Kreutzer 2019). This statement indicates the straightforwardness of a company in
serving the customers across the world. The management of IKEA applies a sales and marketing
system which is free from the misleading ads and any complications. To inform the customer
choice, the company values and trust quality of the products. However, the key components of
vision statement include:
 Creation of Better Life
 Serving Everyone

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The business approach for IKEA is based on the forthcoming future. The company
established it as reliable brand via unmatched products (Jonsson, Rudberg and Holmberg 2013)
to remain appreciated and relevant to customers. IKEA aggregated some of the best designers for
ensuring that the products remains updated with the needs and the time of the patients. However,
perfection is vital component in a world with home accessories and its related appliances. It has
been found that the clients demand finished goods which are also well thought off and agrees
with changing times. This is what IKEA managed in grasping that helped it to grow as one of the
desirable companies with the industry. The company is always full of surprising ideas for
keeping the customer base in search of what seemed new for the platform. It is the variety of
products that makes it easier for IKEA in serving everyone which also defines second component
of the vision statement.
Ways Organizations Adopts in Using SWOT Analysis as Strategic View
SWOT analysis is a strategic tool that aids the business in identifying the things done
right and the needs for change within the organization. In fact, it refers to the methods of
planning that helps the organization in building the strategic plan for meeting the goals,
improving the operations and keeping business relevant (Brooks, Heffner and Henderson 2014).
The SWOT analysis helps in identifying the strength, weakness, threats and opportunities of an
organization that pertains to the organizational growth, services, products, market competition
and the business objectives. A SWOT analysis is built with the help of two by two matrix where
horizontal pairings comprises of the internal factors that includes strengths and weakness and
external factors that includes opportunities and strengths. The results of analysis will enable the

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organization in determining whether the products, objectives, services, goals or project represent
a strategic fit. The best strategic fit is determined by the alignment of the internal and the
external environment.
.
Figure 1: Diagrammatic Representation of Strategic Analysis Matrix
Source: (Gürel and Tat 2017)
As SWOT analysis puts across a proper outlook of a present business situation along with
assessment of strength, weakness, threats and opportunities in an exhaustive manner so
organizations uses this analysis as a means of strategic view. The following paragraphs
represents the ways that the company adopted.
Strengths are factors within the control of an organization and the category takes into
account every aspect of business done right while they try to achieve a specified initiative, goal,

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objective or project. Anything that proves advantageous for an organization or that enables in
processing or smooth running of projects or aids an organization in achieving its business goals
falls under this category.
Weakness also remain with the control of an organization and the category comprises of
e everything that prevents a business from staying on the track for achieving the project or
business objectives and goals. These things needs fixation or a change for achieving success.
Opportunities refers to vital part of any particular business strategy that would help the
business in growth and improvement. An organization uses the SWOT analysis in assessing
opportunities for business that has been used for creating the path to success through means of
strategic planning.
Identification of threats helps the business in insulating itself. Threats represents the key
factors that hamper or threaten the success and growth of a business in order to adopt effective
means for dealing with it.
Thus, the SWOT analysis represents distinct concept that involves use of the essential
data regarding the business for creating effective solutions for ensuring its success. In fact,
SWOT analysis refers to the means of getting an organization focused towards specific
objectives, goals and projects. It is more of an organized approach that enables an organization in
identification of the ways for improving the productivity and efficiency.
SWOT Analysis of IKEA
The SWOT analysis of IKEA is represented by the strength, weakness, opportunities and
threats. The strength of the company is represented by customer knowledge, constant

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innovations, supply chain integration, market presence and brand reputation and the diverse
portfolio of products (Hildeman and Carlsson 2014). As far as the customer knowledge is
concerned, the competitive advantage of IKEA lies in its knowledge about customers. The
company understand purchasing factor that influence the customers in buying. In a move towards
this, the company not only offer lower price but a massive product range. Designers continuously
introduce newer design that looks stylish in eyes of the customers. To ensure customer
convenience the products are easier to assemble and transport. Besides, the company also aligns
shopping with the want and need of customers thereby resulting in unique shopping experience.
The continuous innovation helps in driving cost down. Lower prices has been the cornerstone
for the business idea of IKEA and the company tries doing things in a cost effective and efficient
manner. In order to drive down the cost, the company finds innovative and newer ways of doing
things thereby incorporating them in the business model. The innovations includes either
introduction of newer materials that contributes to the sustainable environment or usage of newer
means of handling, packaging and transportation of materials. IKEA ensures integration of the
supply chain through maintaining long-lasting relation with suppliers. This allows the company
to place orders in larger volumes and benefit from the lower prices and the greater quality with
guaranteed assurance to the suppliers. The company also makes use of IWAY approach for
ensuring closer integration of suppliers with the supply chain. This finally results in competitive
advantage and lower cost. The strength of the company also lies in the market presence and the
brand reputation. IKEA is considered as one of the renowned furniture retailers that is valued at
$US 12.8 billion. This ensures that the customers will choose IKEA over the other brands. The
strength of the company also lies in its diversified business. In addition to the furniture products,
the company also operates houses, flats and restaurants.

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The weakness of the company lies in the negative publicity, lower product service and
products and standardized products (Carlsson 2019). As far as the negative publicity is
concerned the company is mostly criticized poor, employee treatment, objectionable advertising
practice as well as lobbying the authorities of government. This in a way not only effects brand
reputation but also customer loyalty. IKEA was unable to balance between cost reduction and
maintenance of product quality. The cost reduction of the firm led to decrease of the product
quality that has been followed by product return and brand damage. The key competitive
advantage of IKEA is derived from the lower cost and standard products. Standard products
seem to be a weakness for a company as it attracts fewer segments of the customer.
The opportunities of IKEA lies in its expansion in the developing economy, growing
sales in the online platform and expansion in the emerging grocery market (Gvozdikov 2014). As
far as the expansion in developing country is concerned, the company presently operates in
developed economies and has immense chances of expansion in Mexico, Indonesia, Malaysia
and Brazil for sustaining futuristic growth. The growth of the online sales can be a great
opportunity for IKEA since it can utilize the opportunity and benefit from the enhanced sales.
Sales via online retail accounts for close to 17 percent and 4 percent in United Kingdom and
United States in a respective manner. The growing grocery market can be an opportunity for
IKEA to expand the grocery business through introduction of grocery stores. The company has
however been successful in managing food outlet.
Nevertheless, the threats of IKEA lies in its intensified competition and growth of
consumer income (Giunta 2016). As far as the intensity of competition is concerned, IKEA has
various competitors like ASDA, Tesco or Walmart since they also operate on similar specifics

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like lower cost, effectively managed supply chain and a greater market presence that allows them
to have a market share of IKEA. Growth in consumer income implied that people spend less in
lower priced and lower quality products. This is what is exactly offered by IKEA in all its stores.
The higher income will encourage the people in opting for higher priced and better quality
products.
Conclusion:
On a concluding note, it can said that IKEA offers products at low prices so that people
can afford them. Instead of selling luxurious home furnishings, the concept of IKEA make it
possible to serve people by putting across low priced products which contribute towards helping
more number of people so that they are able to lead a happier and better life within the premises
of home. It can also be said that the IKEA concept guides the manner in which the products are
manufactured, designed, assembled and sold. These concepts gives a realistic touch to IKEA
Concept.

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