Business Strategy: Analysis of IKEA's Internal and External Environment

BUSINESS STRATEGY

Contents
INTRODUCTION.....................................................................................................................................3
Task 1.....................................................................................................................................................3
Task 2.....................................................................................................................................................6
Task 3.....................................................................................................................................................7
Task 4...................................................................................................................................................10
CONCLUSION.......................................................................................................................................12
References...........................................................................................................................................13

INTRODUCTION
The business strategy can be defined as the combination of the decisions and the
actions that are taken by the companies for accomplishing the organisational objectives. With
the help of better strategies the businesses can take competitive advantage over others. To
facilitate better strategies it is important to analyse both internal and external environment so
that the impact of various factors can be identified on the business (Rivera, 2019). Such
strategies are formulated by the business o different levels such as corporate level, business
level and at functional level. This report is based upon IKEA which is a Swedish originated
Dutch company that offers ready to assemble furniture, kitchen appliances, home accessories
etc. to their customers at comparatively lower cost. The report includes the analysis of the
internal and external analysis of the market along with the resources and the capabilities with
the help of which they can expand their business. Apart from this the report includes impact
of various industry forces on the company and the strategies that can be adopted by the
company for achieving their business objectives.
Task 1
Overview of the company: IKEA is considered to the world’s largest furniture selling
company that has been trading privately. The owner of the IKEA group is Stitching Ingka
Foundation. The group has been engaged into retail stores offering furniture, shopping
centres, financial asset management, customer fulfilment, services functions etc. the company
has been operating into different location such as North America, Europe, Russia, Asia and
Australia (Pramanik, Maiti and Maiti, 2018).
Vision: The vision of the company is to create a better life for the people for offering them
better and comfortable furniture.
Mission: The mission of the company is to support the visions of the company and to offers a
wide variety of well-designed, functional home furnishing at comparatively lower prices so
that people can easily afford their products.

Objectives of the company: The objective of the company is to increase the number of outlets
so that they can increase their market share by 10% and thus the profitability within a period
of 1 year.
PESTLE analysis:
For efficiently accomplishing the business objectives it is crucial for the IKEA to analyse the
impact of various macro factors so that the influence of different factors can be reduced. It
can be done with the help of PESTLE analysis which is given below:
Political factors: The political stability and better administrative system has positive impact
on the IKEA as due to this there will no such significant changes will take place in the
policies. Also the alliances and the associations with other nations will have positive impact
on IKEA as they can easily trade with them.
Economic factors: The economic condition is feasible for the IKEA as their opportunities for
FDI are easily available and the government is expected to reduce the rate of corporate to
18% which will has favourable impact on the company. Also the per capita income of the
customers is higher which offers them the opportunity to establish their business (Chang and
Tsai, 2016).
Social factors: The standard of living of the people in UK is considerably better and due to
which they spend much on better quality products and this offers an opportunity for them to
open up their new stores in the country. Also with increased level of education the customers
prefers to purchase branded products which are both economic and of beater quality which is
factorable for IKEA.
Technological factors: In UK people prefers to have technologically advanced products as
this enables them to have more comfort. Due to which the management of v has opportunity
to offer their better products which are developed with efficiently technologically advanced
process.
Legal factors: The IKEA has to comply with the equality act and the employment act within
the premises but this will also have favourable impact on them as with they can ensure better
and satisfied workforce that can contribute with their efficiency.