Analyzing the Macro Environment of IKEA

Business strategy
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Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Analyse the influence of macro environment of company..........................................................3
TASK 2............................................................................................................................................6
Critically evaluating the internal/micro environment and capabilities........................................6
TASK 3............................................................................................................................................8
Evaluate and apply outcome of porters five force model............................................................8
TASK 4..........................................................................................................................................10
Theories, concept and Interpreting strategic direction..............................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
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INTRODUCTION
Business strategy is defined as the combination of all decision taken and action
preformed by the business to accomplish by management. It is firm working plan for achieving
vision, prioritizing objectives and optimizing financial performance with its business model. It is
a set of competitive moves and action which business uses in order to attract customers,
strengthening performance and compete successful. The present study is based on “IKEA” which
is multinational group that design and sells ready to assemble furniture, home accessories etc.
The report will identify mission, vision and objective of company as well as analysis macro
environment. This will critically evaluate the internal environment and capabilities by using
SWOT and VRIO.. Report will evaluate and apply outcomes of porter five force models. At the
end of report will applying a range of theories, concept and models as well as produce strategic
planning for company.
TASK 1
Analyse the influence of macro environment of company.
IKEA is the Swedish multinational group which is design and deals in ready to assemble
goods and services like home and kitchen appliances among accessories and other goods for
home. Company is following the hierarchical functional organizational structure for providing
guidance in order to completing work. The macro environment is affect to business in negative
and positive manner. This refers with the condition which exists in economy as a whole, rather
than in the particular sector and region. This includes gross domestic product, inflation rate,
spending, and employment, monetary and fiscal policy. Here is highlight vision; mission and
objective of IKEA are as follows:
 Vision: vision of IKEA is to create a better everyday life for the many people.
 Mission: the mission statement of IKEA is to provide a better life by keeping the mission
alive is their everyday employee (IKEA mission and vision statement, 2019).
 Objective: to offer a wide range of home furnishing items of good design and function,
excellent quality and durability at price.
Business strategy is providing the effective and valuable opportunity to IKEA in order to get
success at market place. Company already have various competitors at market place. For that,
business needs to become important for company to prepare their competitive price strategy by
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analysing micro and macro environmental factors. Through that management is able to analysis
affect of those facts. In order to analysis macro environmental factors and its affect on business,
here is discussed on PESTEL model and stakeholder analysis.
A PESTEL analysis is the framework which is used by marketers for analysis and
monitor macro environmental factors that have impact to IKEA.
Political factor:
IKEA is operates across more than 41 countries. A political factor is generally affected to
the business performance. This refers with the political parties business policies. In that some of
the nation’s party have power clear majority and the less majority to perform tasks. In the case of
fewer majorities is help to take big decision easily (PESTEL analysis, 2016). Sales activities
through supply chain management are affected by the political factor. This leads to economic
stability and turn it means better sales and profit.
Economic factor:
Economic factor is refers with the economic condition of nations and the global
economy. Present day’s economic condition is hardly affected through the corona virus. This
affect business in negative manner because businesses are not run properly all is locked as per
the government orders. However, if economic condition is good than it is beneficial for IKEA
because through customers have great purchasing power to purchase any product with their
income.
Social factor:
Social factor is affected to business in negative manner because this refers with attitude,
believes and taste of customers. Taste and preference are changed as per current trends (Akter
and et.al., 2016). For that here is taking best example as that customer is become more informed,
there is increasing demand of best quality of product and services as well as with new design
than it can affect to IKEA because customers wants new design of product. In that management
need to analysis complete market and their needs with company are help to produce best design
of product is help to attract more customers towards company. This will be more beneficial for
company.
Technological factor:
Technology is most important part of the market because present day customer order
there product from online platform in order to fulfil their needs and wants in effective manner.
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