Analyzing the Impact of Macro Environment on IKEA's Strategies

Business
Strategy
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Contents
INTRODUCTION.......................................................................................................................................3
TASK 1.......................................................................................................................................................3
P1 Applying appropriate frameworks analyze the impact and influence of the macro environment on a
given organization and its strategies........................................................................................................3
TASK 2.......................................................................................................................................................6
P2 Analyze the internal environment and capabilities of given organization by using appropriate
framework...............................................................................................................................................6
TASK 3.....................................................................................................................................................10
P3 Applying Porter’s Five Forces model evaluate the competitive forces of a given market sector for an
organization...........................................................................................................................................10
TASK 4.....................................................................................................................................................12
P4 Applying a range of theories, concept and models, interpret and devise strategic planning for a
given organization.................................................................................................................................12
CONCLUSION.........................................................................................................................................15
REFRENCES............................................................................................................................................17
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INTRODUCTION
Business strategy is considered as combination of competitive or rivalry practices which
are adopted by a company in order to attract more customers enhance performance, gain
competitive advantages and many more. It will also help in developing proper guidelines that
help in conducting business operations in effective manner for attaining desire goal and
objective. There are main three basic business strategies which every organization needs to adopt
i.e. cost leadership, differentiation strategy and focus (Al-Surmi, Cao and Duan, 2020).
Organization selected for respective report is IKEA which is operating in retail business and it is
founded by Ingvar Kamprad in year 1943. Its head office is located in Delft, Netherland as well
as they design and sell kitchen appliances, ready to assemble furniture and home accessories at
worldwide level. Topics included in this report are impact of macro environment of company
operation as well as it also explain about internal environment and capabilities of firm.
Moreover, it will also evaluate as well as apply outcome of using porter’s five force model in
retail sector as well as it include application of different theories for developing strategic plan.
TASK 1
P1 Applying appropriate frameworks analyze the impact and influence of the macro environment
on a given organization and its strategies.
For an organization it is very much potential to analyze the macro business environment
and its impact on the organisational strategies and tactics to remain competitive in the
marketplace (Hanggara, 2019). Before evaluating the Macro business environment required to
evaluate the organisational vision, mission and objectives that are as follows:
Mission: IKEA’s mission is to provide one of best services for everyday living for people and
keep alive the mission for their employees. The Team members of respective organization share
the doctrines that contribute to build the best products and dream of.
Vision: The one liner simple vision of respective organization is “To create the better everyday
life for the lots of individuals”
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Business objectives and goals: The main objective of respective organization includes to
provide wide range of products includes furnishing home appliances of very good design,
function and in great quality at low price so that every individual can afford it.
Strategic intent and differ kinds of strategic direction:
In context of IKEA they take each and every step in very much planned manner and
depict it to their employees so that constantly they can contribute one of their best efforts in
organisational development and enhancement. In context of IKEA the strategic intent and
strategic direction are as follows:
Strategic intent: In strategic intent consist of the providing low price products with unique design
and functionality to enhance the consumers experience in potential manner (Hanggara, 2019).
IKEA strategies: In strategies of respective organization includes self assembly features that
directly cut operations and transportation cost. Focus on the individual marketing rather than the
mass marketing to achieve the desirable goals and objectives. Further it includes the providing
limited warranty and service model by opening the small retail stores and segmented marketing.
Macro business environment:
In macro environment is very much important for an individual as well as organization to
build strategies and tactics in achieving the desirable goals and objectives. With the help of
PESTEL analysis organization can be able to work in effective manner that are as follows:
Political factor
In political factors consist of the government regulations, political
regimes and taxation and many more. In context of IKEA which
operates in the UK marketplace that is very much unstable in the
nature. Due to advent of brexit organizations not able to operate in
potential manner. Brexit lower down the consumer disposable income
that directly impacts the profitability of organization. Another
important aspect is UK government deciding to lower down the tax rate
from the 30 to 28%.
Positive: Due to the decrease in corporate tax organization can be able
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