Analysis of IKEA

This business report analyzes IKEA's international expansion, competitive strategy, organizational structure, entry strategies, operational control, HR management, and provides recommendations for improvement.

Analysis of IKEA

Cover Content
 Introduction
 Overview of the company and current operating position
 Review of company’s international competitive strategy
 Existing organisational design structure and control issues
 Entry strategies used to enter other regions/countries
 Operational control, production and distribution/supply chain
management
 Management of Human Resources across borders
 Identify key issues or opportunities for management
 Recommendations to management for improvement
 Conclusion
 References

Executive summary
The purpose of this business report is to perform the
analysis of Ikea that has expanded its operations
across borders into foreign market. Analysis is done
by taking into consideration overview of the company
current operating position, by reviewing of company
international competitive and entry strategies used to
enter other countries.

Introduction
IKEA is one of the privately held international home
product retailer who deals in selling accessories,
flat pack furniture, bathroom and kitchen items in
their retail stores all around the world.

Overview of the company
and current operating
position
 Ikea is one of the Swedish founded multinational
group which generally sells and design ready to
assemble furniture, home accessories and
occasionally home service.
 It was founded in 1943 by Ingvar Kamprad and
began to sell furnitures five years later.

Review of company’s
international competitive
strategy
IKEA is mainly based on Porter's Generic Strategies
which was proposed by Michael Porter. “Cost
Leadership strategy” is mainly taken into
consideration by Ikea who seeks for suppliers and
could fabricate well fashioned sub-assemblies at the
lowest cost(Hrelja, Isaksson and Richardson 2012).

Existing organisational
design structure and control
issues
Organisation structure of the every business
company refers to a formalized practice of action
that connect the company technologies, people
and tasks (Jonsson, Rudberg and Holmberg,
2013).

Entry strategies used to enter
other regions/countries
There are different types of entry strategies which
can be used by different organisation in order to
enter a foreign market, as one strategy cannot be
used by all international market.
Therefore, IKEA implement the Franchising strategy
in some countries so that it can manage minority
stores.

Operational control, production
and distribution/supply chain
management
Ikea is one of the most successful furniture retail
company with its 276 store in 36 countries and
they have managed there own special way of
selling furnitures to its final customers which has
lead in increase in sales.

Contd....
Operation function refers to the series of process
which are interdependent to each other and
consumes resources as an input in each stage of
operations.
Ikea takes into consideration lean management and
just in time approach to control the overall
production process of the company.

Management of Human
Resources across borders
As the main vision of Ikea is to “create better
everyday life for many individuals like for
customers, employees, community etc. As per
human resource philosophy of Ikea it is being
believed that employees term to be more
productive and committed towards their
respective task only when the company take care
of them and their respective needs.

Identify key issues or
opportunities for
management
Key issues and opportunities for Ikea management
can be identified only if Ikea admits its weakness
and threats so that they can be controlled and
overcome. Thus, it will help in assisting IKEA to
set their goals and to expand business at an
international level Major weakness

Recommendations to
management for
improvement
It is to be recommended that IKEA can take into
consideration joint venture strategy for expansion of
business at an international level (Rese, Schreiber
and Baier, 2014). As this strategy terms to be good
because it assist company to enter into different
cultural market.

Conclusion
From the above report it can be concluded that
this report was based on analysis of Ikea
company. Company uses porter's generic
strategy in order to expand business at
international level.

References
Grant, R.M., 2016. Contemporary strategy analysis:
Text and cases edition. John Wiley & Sons.
Hrelja, R., Isaksson, K. and Richardson, T., 2012.
IKEA and small city development in Sweden:
planning myths, realities, and unsustainable
mobilities. International Planning Studies.
17(2). pp.125-145.
Hultman, J.and et. al2012. An interaction approach
to global sourcing: A case study of IKEA.
Journal of purchasing and supply management.
18(1). pp.9-21.

Thank-You