Business Strategy: Analysis of IKEA's Internal Environment and Competitive Positioning

Business Strategy

Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
PESTEL Analysis........................................................................................................................3
TASK 2............................................................................................................................................5
Analyse internal environment and capabilities of IKEA.............................................................5
TASK 3............................................................................................................................................9
Porter’s Five Force Model...........................................................................................................9
TASK 4..........................................................................................................................................13
Strategic Planning for Organization in Market Place................................................................13

INTRODUCTION
Business strategy can be considered as the group or set of various competitive moves of
organization which can be used by the company in the competitive market to gain effective result
from the market place. Most of organization used to plan their business strategy in order to gain
high profit from market place. This report is about IKEA. IKEA is a n international furniture
manufacturing organization that was established in year 1943 by Ingvar Kamprad. The
headquarter of the organization is in Delft, Netherlands. Company is operating on 433 locations
around world to run their business effectively in international business scenario. Organization is
working on global level with its creative and effective furniture products. In this report the
impact of external business environmental factors has been explained in the report (Johnson,
2016). For the macro factor analysis PESTEL Analysis can be used by the organization to get
better overview about the market place. The internal capabilities of the organization also has
been considered in the report. Different tools like SWOT and VRIO analysis will be used in
there port to evaluate the internal capability of the organization. Porter’s Five force model will be
used in report to analysis the competitive positioning in market place and Ansoff matrix will be
used to evaluate proper strategy the can be used by organization for new market.
TASK 1
PESTEL Analysis
IKEA operates more than 375 stores which have their various parts in the globe which have the
global level of presences which is brand of subjects by the several forces. In this era level of
globalization form the political to economic, social and technological, there are several forces
that affect the brands and their business. IKEA have been affected with more furnishing products
in towards provide their lower prices along with greater quality. This is able to have their strong
brands in able to respond by changing the marketing dynamics faster.
Political factor
IKEA have the clear operating more than 41 countries as the political factors as there is in every
nation effecting the business. In order to have their supply chain activities to have sale which is
being political factors. There is leads to economic stability which is turned means which have the
better sales and profits. The government have the attitude towards foreign brands which have the

policies too have proper mattering. This have led to supply chain disruption the different
countries have lowered the political barriers foreign brands which have the presences of the
international brands. IKEA is planning more level of domination towards the emerging Asian
market. There are barriers are reducing with IKEA supply chain by having activities in supply
chain located in Europe and political disruption can affects which is more deep manner.
Economical factor
Economic forces play a very special roles in the business environment as the condition with
respective world economy have the description of unlimited profit and revenue which is earned
by business (Gattorna, 2017.). There is existence pf several ageing brands which are considered
to be more level of poor in shape during the time period of recession. This have recent level of
causes. which leads to declines which have results in loss of varies job. On other hand Brexit
have the current level of impact on there company which have results in increased prices of
products.
Social factor
Social factors have the deep impact on the business as well as profits in order to have there
important understanding in respecting local cultural values. The firm have experienced level of
failure as Ikea has not always gotten these local nuances right. The company came under fire for
Photoshopping women out of its catalogue in Saudi Arabia and for removing a lesbian couple
from its magazine in Russia. In order to that’s firm have tried to have proper ensuring the wrong
things don’t have the show up their right culture.
Technological Factor
Technology have turned out to be service in order to have the providing the better level of
customer service to customer in all level of perfectives. IKEA ids having the proper level of
focusing on their providing the more kind of experience with help of explained digital channels.
On the other hand, the firm have also argument reality to improve the level of customer service it
provides. Now, consumer expectations are heightened and most focus has to be on better
customer service. Technology such as the artificial intelligences along with cognitive one have
proper enabling to retailer in order to have the understanding between level of consumer
behaviour and provide them better level of customer experience.