Business Environment Study of IKEA

B13075
BUSINESS
ENVIRONMENT

EXECUTIVE SUMMARY/ABSTRACT
This project covers the Business environment study of chosen company IKEA; it also covers
internal and external factor analyses of same company. Report starts with identifying
economic and non-economic environment of IKEA which impacts organisational behaviour
of the company. Economic environment consists of various elements like economic system,
policies and conditions which classified into factors like market, taxes, inflation, distribution and
manufacturing of goods in economic system; laws, regulations, EU laws, prices and consumer rights
in economic policies; remaining factors Brexit, companies stability, virus and tourist covers in
economic conditions. PESTLE analyses and SWOT analyses will reflect the external and internal study
done on IKEA.

Table of Contents
1. INTRODUCTION.............................................................................................................................4
1.1 COMPANY BACKGROUND............................................................................................................4
2. LITERATURE REVIEW..........................................................................................................................5
2.1 IMPACT OF ECONOMIC ENVIRONMENT ON ORGANISATIONAL BEHAVIOUR..............................5
2.1.1 ECONOMIC SYSTEM..............................................................................................................5
2.1.2 ECONOMIC POLICIES.............................................................................................................6
2.1.3 ECONOMIC CONDITIONS......................................................................................................7
2.2 NON-ECONOMIC ENVIRONMENT AND IMPACT ON BEHAVIOUR................................................8
2.2.1 DEMOGRAPHICS...................................................................................................................8
2.2.2 NATURAL...............................................................................................................................8
2.2.3 CULTURAL.............................................................................................................................9
3. DISCUSSION AND ANALYSIS...............................................................................................................9
3.1 SWOT ANALYSIS...........................................................................................................................9
3.2 PESTLE ANALYSIS.......................................................................................................................11
4. CONCLUSION...................................................................................................................................12
5. REFERENCES....................................................................................................................................13

1. INTRODUCTION
Business environment are the factors like internal and external which impacts business
through its surroundings. It includes the impact of external and internal factors on business
decisions and operations. Some of these factors discussed in this project are employees,
customers, stakeholders, government, supply, demand, laws and other factors impacting
business decisions.
In this business environment report of IKEA; company’s organizational structure and its
impact on employees have been discussed. This assignment aims to facilitate the analyses of
various business environments like SWOT analysis and PEST analyses and their affect on
business decisions and operations of IKEA is discussed.
1.1 COMPANY BACKGROUND
IKEA is a UK company and a UK furniture retail brand. The company is a popular brand and is
very well known about its quality products and services. The company provides quality of
furniture and furnishings including office furniture, home furniture with unique and
innovative designs to provide attractive products to customers. The company is
headquartered in Delft, Netherlands. IKEA Dose not only deals in furniture, but also expands
its business to homes and apartments and also owns the Mega Store ( Tarnovskaya and de
Chernatony, 2011).
The organizational structure of the company is divided into two main heads, which have
shops and factories and franchise operations. The structure of the organization is complex
and not easily understood. The objective of the company is to increase the company's
profitability by providing quality products to customers and achieve maximum customer
satisfaction as well as a ranking position in the corporate world. The company's
organizational functions include the various functions described below, including the
company's objectives and structure explaining their relationship with information
technology, communications, purchasing, distribution, product development, and sales. The
organizational structure consists of franchising and proprietary stores that include these
functions of the organization (Daunfeldt, and et.al., 2015).
Interrelationship refers to dependencies and dependencies on other functions.
Interrelationship provides dependent organizational functions and operations to achieve the
organizational goals and objectives of the company. These tasks have interdependence for
better achievement of the goals and objectives of the organization. The functions of
organizations have connections between each other and also provide a chain of
responsibility and a chain of command. As mentioned above IKEA is a retail company for
retail and unique designer furniture. The organization has various functions of HR, Finance,
Marketing, Sales and IT. These various tasks have to be managed in a way to achieve