Organisation in Global Economy

Organisation in Global
Economy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Background to IKEA...................................................................................................................1
Background to Business Environment........................................................................................3
Application of an appropriate analytical approach.....................................................................6
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Organisation in global economy reflects the growth and development of business that has
been affected or influenced by various factors as like employees, customers, clients, supply,
demand, management, government policies and many other as well. Business environment
always being very complex as it includes different factors that keep on changing on continuous
basis (Arvis, 2018). It is the biggest factor due to which company faces a lot of difficulties to
achieve their goals and gain the competitive advantage from the market. It act as the resistor that
resist the performance and effectiveness of the company that operates their business in a certain
country. This report is bases of the case study of IKEA Czech republic that was founded in
Swedish European multinational that design and sales furniture, home accessories and kitchen
appliances. It was founded by Ingvar Kamprad in 28 July 1943 and have the headquarter in
Delft, Netherlands. They decided to expand their business and operates the new branch in
Australia. This report includes the macro environmental factors by using PESTLE analysis,
porter's five forces to analyse the business environment.
TASK 1
Background to IKEA
IKEA stands for the Ingvar Kamprad Elmtaryd Agunnaryd and it is the private owned
company that designed and sales the assembles furniture, appliances and accessories as well and
other goods on the basis of occasion and provides home service (Axtmann, 2018). It has been the
world largest retailer of furniture since 2008 and its founder is the eight richest person of the
world in 2008. it is registered in Netherlands and controls as well as manages by his son. IKEA
is known as the modernist furniture as per their designs and there interior design also being
known for the eco-friendly and its simplicity. IKEA is also known for its balance operation and
their control on costing and continuous improvement, development that decreases its prices to
approx 2-3%.As per the detailing of 2019, IKEA operates their business in 52 countries and have
a worth of €38.8 billion. IKEA has its own websites named as www.ikea.com and it contains
around 12000 products and there are approx 2.1 billion visitors as from the year 2015-2016. It
consumes around 1% of the wood and becomes the worlds commercial product and it makes
them the largest retailer of furnitures. Many of the stores and buildings of IKEA is owned by the
INGKA that is the holding company and controlled by Stitching INGKA foundations, and it is
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one the most wealthiest foundations all across the world. In addition to this there are some more
background of IKEA is as defined below as:
Mission: IKEA works with the mission to support their vision and by offered the wide
range of best and quality products to the customers and provides the furnitures that is well
designed and sale at low price that attracts the large number of customers base .
Vision: Their vision is to create the better life for many peoples and provide the
diversified range of products to their customers.
Competitors: Their are many competitors of IKEA Czech republic and some of them are
as Target, Amazon, Walmart, Bed Bath and beyond. And they all brings the lot of challenges for
IKEA to measure the success and growth in effective manner.
Size: IKEA stores almost have 300,000 square feet that is approx average of five football
grounds and works with 211,000 number of employee all across the world.
Types: IKEA has works for the wide variety of furnitures as like kitchen accessories,
home appliances and well furnished furnitures as well (Bartley, 2018).
Amenities: IKEA have different kind of services for bathroom, laundry, bedroom,
cooking, furnitures for office, living rooms, lighting, children and many other as well.
Incentives: IKEA presents the best value to the customers in terms of eco-friendly and
pleasant package of furnitures but also provides the best and flexible benefits to everyone who
support them to measure growth. IKEA Czech republic provides bonus programmes to fulfil the
requirement and demand of the customers. Provides gift to the customers and employee in the
occasions and discounts to the loyal customers. Provides free internet access to the employees
and 5 days vacation to the employee in a year and many more other facilities as well.
Considerations: IKEA major considerations is the marketplace and then sale their
product and services with the other's companies product as well. They are to launch their own
place just overcome their limits and provides the wide variety of other home related product.
Ownership structure: IKEA owned and operates their business with complicated array
in which they didn't look forward for profit but for to operate the profit. IKEA is owned by the
holding and it is registered company in Luxembourg.
Franchised: IKEA franchisee pay 3% of their gross salary to IKEA and that is 789 euros.
Cash investment of IKEA is $9,250 and range of investment is $9,250 - $9,250 while the fees of
franchise is $9250.
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