Impact and Influence of Macro Environment on IKEA

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1 ...........................................................................................................................................3
Impact and influence of the macro environment and its strategies ............................................3
TASK 2............................................................................................................................................5
Critically evaluating the internal capability and environment....................................................5
TASK 3............................................................................................................................................8
Evaluate and apply outcome of the Porter's five Forces Model of IKEA company...................8
TASK 4..........................................................................................................................................11
Interpreting strategic Directions................................................................................................11
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
IKEA is the company which is dealing in kitchen appliances and ready to assemble
furniture. The company was founded in the 1943 and was founded by the Ingvar kamprad.
Company is the world largest furniture retailer which are providing services to customers. The
IKEA group of the companies have complex administration structure and the company is
successful in making the 423 stores in 52 countries. Report consist of impact and the influence of
the macro environment on the company. It includes the business strategies which are used by the
company to improve the performance. Internal environment of the company is affecting business
and capabilities of the business as well. The report has also applied the porters five model on the
company which would also improve the competitive edge. The theories, models and the concepts
have been included in the report which would help the company to improve the performance.
Report wants to provide the awareness to the students regarding the different kinds of the
strategies used in the organization.
TASK 1
Impact and influence of the macro environment and its strategies
Mission statement and vision statement of the IKEA include the IKEA vision to create
the better life for the customers. Company wants to provide a well furnished products to the
customers at low prices. Through this statement the company is providing services effectively
and also company is raising the standard of the living of the customers as well. The company is
adopting new technologies for improvising the product. Macro environment is influencing the
company, so the pestle analysis is done below.
PESTLE analysis
Political factors
Company is affected by the political controversies in UK. The company is also accepting
the furniture which are made in the prisons in Germany. The act of the company has affected the
image of the company and the goodwill of the company. Founder of the company was Ingvar
kamprad and founder of the company was involved in the pro-Nazi movements in swedan and
these was also affecting the company image and the reputation as well (Smith and Rees 2017).
Economic factors
Economy of the country is affecting the companies on the large scale. There was the
change in the economy at the time of the brexit and due to that the company had to increase

prices of the products as well. Changes in the currency was also having the impact on the
performance of the company. In order to increase the sales the company had entered the global
market and also these emerging economies was strong base for the company for the growth.
Sociological factors
The company is taking the initiative to merge with the local organizations for training the
youth. This was increasing the skills and the abilities among the youth through the at the youth
ware able to apply the jobs on the basis of their skills and the abilities. The youth of the country
was shifting from the mobiles which consist every thing. This was shifting the focus of the youth
and the youth employees which are working in the company (Sutton and Filip 2018).
Technological factors
The company is using the latest technology for increasing the sales and the productivity
and as well. Company is investing in the augmented reality to increase the sales as well. The use
of the latest technology is improvising the products according to the customers need (Mahmudov
2019). As the time is changing continuously the technology is an essential part of the life.
Legal factors
There is the criticism over the taxes in countries. These are affecting the sales of the
company. There are entry barriers and the rules and the regulations for the new entries In the
market. This is not increasing the competition in the India but it is affecting the company.
Environmental factors
The company is focusing on the environment and also taking the effective measures for
protecting the environment. Organization is investing in the renewable energy resources through
which environment would be protected as well (Hisrich and Ramadani, 2017). The company is
also concentrating on the sustainability and the fulfilling the social responsibility towards the
environment.
STAKE HOLDER analysis
In the stake holders analysis the company is able to identify the people at the time of the
projects and the work is allotted to them according to the skills, abilities, and interest of the
employees. The analysis is done to help the organization and clear the goals and plans of
stakeholders. It would solve the conflicts and issues between the employees and the employers.
Stake holders analysis is done in the process and process is described below.
Determine the stake holders