Business Strategy for IKEA

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION 3
TASK 1 3
P1 Impact of Macro Environment on IKEA 3
TASK 2 5
P2 Analysis of all the internal capabilities as well as environment of IKEA 5
TASK 3 9
P3 Porter’s five force model applied on IKEA 9
TASK 4 11
P4 Strategic Plan for IKEA 11
CONCLUSION 12
REFERENCES 12

INTRODUCTION
Business strategy refers to a number of steps as well as actions which are undertaken by an
organisation in order to increase their revenues as well as profitability. There are many other
motives for formulation of a business strategy which includes attracting customers, achieving
customers satisfaction, increasing competition in the market and achieving all its business
objectives as well as aims. Business strategy is responsible for guiding a business (Bai, C. And
et. al., 2020). They provide a roadmap to business and explain which next step is to be taken by
business. It is essential in order to maintain a sustainable growth of business. It is necessary that
business strategy is formed for a long period of time. In the following report, a business strategy
for IKEA is formed. It is a multinational business which sells all the ready to assemble goods
which are furniture, kitchen as well as home appliances. It was founded in Sweden in 1943 by
Ingvar Kampard. It is present in 433 locations around the world. There are a number of analyses
performed on IKEA in order to derive its business strategy. It includes VRIO, PESTLE, SWOT,
Porter's five forces analysis and a number of other analyses to form business strategies for IKEA.
In the end of the report a business strategy for IKEA is also prepared.
TASK 1
Vision: It refrers to short term objectives of business. Vision of Ikea is to create an everyday
better for a number of people. Their business idea is to offer a number of well-designed,
functional homes as well as furniture at the lowest possible price.
Mission: Missions are long term goals of an organisation. Their business supports the idea of
developing a sustainable environment and creating better living conditions for people around
them. They believe towards giving them a better standard of lives throughout (CHENG, T.Y. and
et. al., 2020).
Objectives: Objective refers to major aims towards which a business is working. Major aim of
business is to create a better every day for people investing in their company in any possible
manner.
P1 Impact of Macro Environment on IKEA
There are a number of factors present in the macro environment which can affect a business up
to certain extent. When taken into consideration the concept of macro environment is very large
and a lot of factors can be included in it (Balon and et. al.,2019). The best way to learn about

these factors is conducting a PESTLE analysis on business. Following is PESTLE analysis
conducted on business-
Pestle analysis
PESTLE stands for political, economic, legal, social, technological and environmental.
All these factors together have negative as well as positive impact on functioning of a business.
In order to create a strategy for IKEA so that it may earn profits and stay in the market for the
long run all these factors related to the company are needed to be analysed well. Following are
all those factors affecting IKEA:
PESTLE analysis refers to analysing all the external factors present in a business
environment which may directly order indirectly have an effect positive as well as negative on
functioning of a business. PESTLE analysis generally stands for political, legal, social,
technological, environmental and economic factors. Below mentioned is Western analysis
conducted on IKEA in order to understand all the external factors affecting business:
Political factors:
IKEA has opened its doors in more than 41 countries. This makes it important for IKEA
to abide by rules and regulations of all these countries. There are many countries which have
similar kinds of political influences. But many times, these may differ for different countries
around the world (Elias Mota and et. al., 2020). However, political stability will always benefit
the company. Without political stability economic stability for a country is not possible. So, it is
important for IKEA to look into all the political matters before venturing into a new country.
Positive impact: Good relation with government might help in proper functioning in
different nations.
Negative impact: Small changes in policies might adversely affect such as change in
political party.
Social factors:
Social factors refer to all the values, beliefs of a society a company is running its business
in. It is important for business to follow the culture. It is important that the company does not
offend any social values. This makes it essential for IKEA to make sure that the marketing
material they are using to advertise their brand does not hurt feelings of any social culture. IKEA
have faced many incidents in the past where the advertising campaigns used by companies have
been criticised in the market by different communities. Profits for the company could suffer due