Business Strategy: Analysis of IKEA's External Factors and SWOT Analysis

Business Strategy
1

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
TASK 1............................................................................................................................................3
Influence of Environment............................................................................................................3
PESTLE Analysis........................................................................................................................4
Stakeholder Analysis...................................................................................................................5
TASK 2............................................................................................................................................6
Swot Analysis..............................................................................................................................6
VRIO framework.........................................................................................................................8
TASK 3............................................................................................................................................9
Evaluation of competitive positioning of IKEA..........................................................................9
TASK4...........................................................................................................................................11
Strategic management plan of IKEA.........................................................................................11
CONCLUSION..............................................................................................................................13
REFERENCE................................................................................................................................14
2

INTRODUCTION
Business strategy includes various norms, culture and direction that firm uses in order to
get competitive advantages, attract maximum number of customers so that particular objectives
can be achieved. Internal and external factors of environment impact adversely on functioning
and profitability of organisation so they need to be evaluated for growth and success of
enterprise. SWOT Model helps in analysing firm strength and weakness that it can uses in order
to effectively utilise opportunities and gain differentiate position. This report is about IKEA is
enterprise that was establish on 28 July, 1943 that is well known for providing ready to assemble
furniture, home accessories and kitchen appliance. It has explained about various external
factors that impact on business strategy of IKEA and strength, capabilities of firm that
contributed in growth and success of organisation. Porter five forces model is used in report to
analysis level of competition and power of customers in the industry company operate. At last it
has described about various strategic direction that can be used by IKEA to meet its specific
objectives.
MAIN BODY
TASK 1
Mission:The mission of the IKEA is to increase its market share by 10% within the international
in its respective industry or sector.
Vision:The top-level management of company has set the vision of gaining the very large loyal
customer base by providing the best quality products and services.
Objectives
 To increase customer base within the market.
 To boost existing marketing operations.
 For improving quality of products and services.
 To gain huge competitive advantage in the market.
 For leading its respective industry or sector.
Influence of Environment
Currently Ikea has highly influenced through different external factors which are
affecting this company in both ways, positively and negatively (Bashirand Verma, 2017). In this
situational there are two models (PESTLE analysis and stakeholder analysis) has been used
3

below which can support this company for analysing those different external factors. After
analysing, this company will be able to develop some appropriate business strategies for
systematically dealing with these factors.
PESTLE Analysis
PESTEL analytical tool is very supportive to the Ikea, because the management can
easily analyse its major internal factors of its business environment. There are PESTEL tool is
helpful in knowing main external factors to a company. Analysis of business environment factors
is veryimportant for this company to develop some productive strategies to deal with influence of
these factors. This tool mainly includes six factors which has been mentioned below;
Political Factors:Political factors highly affects business environment of Ikea, because the
management of Ikea is always responsible for fulfilling those all formalities which has passed by
government of the United Kingdom on various business. The taxation is one of the main
examples of political factors, because Ikea always takes various steps forfulfillingthe taxation
formality.
Economic Factors:The Ikea is able to take lots of advantages from economic factors of the
United Kingdom, because this country is one of the richest countries in the world (Holotiukand
Beimborn, 2017). That’s why most people in the UK comes from high income groups, in which
they can easily afford different products and services which has offered by Ikea in the market.
Social Factors: Social factors are very favourable to the Ikea in the UK. Reason is, most people
of this country believes in purchasing products and services from only those companies which
has offered quality products in the market. The Ikea is also offering quality products and services
in in the market, so this company has great opportunity for attractingmany customers towards
own brand with the support of its good product quality.
Technological Factors:Technological factors can support to Ikea for developing its all over
performance in the market. Nowadays those all technological machineries, tools andgadgets etc.
are present in the market, which if Ikea adopt in its workplace, then it will be able to develop its
all over performance within different market segments.
Legal Factors:The government of the United Kingdom has passed various business legislation,
regulations, standards etc., in which the management of Ikea highly responsible to adhere every
business legislation in its daily operations for maintaining an ethical environment in itsworkplace
(Kuula and Haapasalo, 2017). There is employment law and contract lawact etc. some major
4