Analysis of Impact and Influence of Macro Environment on Strategic Decision-making of IKEA

Business Strategy

Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Analysis of the impact and influence of macro environment on the strategic decision-
making of IKEA..........................................................................................................................1
TASK 2............................................................................................................................................4
P2 Analysis of the internal environment and capabilities of IKEA.............................................4
TASK 3............................................................................................................................................7
P3 Evaluation of the competitive forces and position of IKEA applying Porter’s Five Forces
Model...........................................................................................................................................7
TASK 4............................................................................................................................................9
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning
for IKEA......................................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
IKEA was established by Ingvar Kamprad in the year 1943 in Delft, Netherlands to offer a
wide range of products for home furniture and decoration purposes. The following project report
aims to comprehend and evaluate the impact of external factors on decision-making by IKEA
and also tries to examine the internal capability and strength of the organisation. In the report, a
competitive analysis of IKEA has been done with a motive of helping the management in
preparation of a strategic plan for future direction and generic strategies which can be used for
business growth and development.
TASK 1
P1 Analysis of the impact and influence of macro environment on the strategic decision-making
of IKEA.
IKEA is certainly on the list of topmost trusted companies when it comes to home-care and
furnishing products. Company’s vision statement is ‘To create better everyday life for the many
people’. It can be observed from the vision statement of the company that the management has
the primary motive of providing better standard of live to its customers through a strategy which
aims at making home-care products and furniture easily accessible and affordable for as many
people as possible. To accomplish the vision of the company, the management involves itself in
strategic policy formulation and planning. From the mission statement of the company which is
considered to be “offering a wide range of well designed, functional home furnishing products at
prices so low that as many people as possible will be able to afford them”, it can be analysed that
the management of IKEA is determined to provide the best range of home-care products which
are of best quality and easy to assemble at prices which makes the product affordable for the
masses and increases the ambit of potential customers for the company. Every decision which is
being taken by the management of the company has a massive influence of the company’s vision
and mission statement. However, it is important to notice that the vision and mission of a
company are not the only factors influencing the strategic decision-making by the management
and a lot of external factors present in the macro environment of IKEA also affects and haves an
impact on the decision-making process of the company. To understand and comprehend this
impact and influence in a better way, a PESTLE and stakeholder’s analysis of IKEA is being
done as follows:
1