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Business Strategy Assignment - IKEA

Added on - 23 Nov 2020

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Business Strategy
Table of ContentsINTRODUCTION...........................................................................................................................1LO 1................................................................................................................................................1P1 Analyses the macro environment of IKEA...........................................................................1LO 2.................................................................................................................................................2P2 Analysis of internal factors with reference to IKEA.............................................................2LO 3.................................................................................................................................................4P3 Porter five forces...................................................................................................................4P4 Theories and concepts of strategic planning.........................................................................5CONCLUSION................................................................................................................................7REFERENCES................................................................................................................................8
INTRODUCTIONBusiness strategy refers to plan of action of firm for achieving its mission vision,objectives and gaining competitive advantage, This aids in increasing financial performance byusing appropriate business model. Present study will be based on IKEA company that operatesin field of designing and selling ready-to assemble furniture.Study will explain impact of macro environment on an organisation. Furthermore, it willundertake use of a framework to analyse the internal environment and capabilities. Report willcritically evaluate all the external environmental factors.LO 1P1 Analyses the macro environment of IKEAIKEA is a firm that involved in designing furniture,home appliances, kitchen equipment.the business has a vision to improve quality of day to day life of the people its ideas supports itsvision by creating well- designed, home furniture at a very minimum prices. so that more peoplewill be able to purchase its products((Aithal, Shailashree and Kumar, 2015). The main objectiveof entity is to boost sells by creating awareness and maintaining strong relationships with people,gain high market share. Analyses of various external environment factors in relation to IKEA aredescribed as below:The business operations of IKEA is affected by several external environment factors andany modification in such factors directly impact on growth of company.the reasons of thisimpact is also described as below-Political:This factor affects operational activities of IKEA, changes in governmentpolicies, laws or regulations influence business operations. Political instability maydisrupt supply chain of organisation.Social:it consist of changes in needs and wants of consumers. Business is focusing moreon customer oriented operations in order to deal with social changes. By giving priorityto needs and demand of the society it may increase revenue generation of concern.Economical:Favourable changes in tax rates, unemployment, interest and inflation ratesin nation can influence buying pattern of consumers as it will positively influencedisposable income of prospects. The business activities of IKEA are affected by positiveand negative changes in the economy(Hinkelmann and Pasquini, 2014). If people have1
adequate financial resources then they will buy goods of IKEA that would help in raisingrevenues but if there is low employment rate then it might create trouble for business.Legal:The operations of IKEA is affected by changes in laws and legislation in legalenvironment that impact operational functions of the entity the government has created“make more in India” but IKEA is searching for new suppliers in some category ofproduct like sofa and mattresses .Technology:The frequent changes in technology affect growth of IKEA. Business has toadopt new technological changes in order to increase effectiveness of operations and keepits entity update. (Anwar, Shah and Hasnu, 2016).Environmental:This component includes changes in climate. Positive changes in climatemay increase the efficiency of furniture making process of firm. On the other handnegative changes may impact the overall working operations of the business.M1 & D1Macro environment factors affects the growth and success of IKEA and also impacts itsdecision making process and strategies .this factors include- political ,social, legal, economical,environmental components. The main goal of IKEA is to maximize its sales and profitability oforganisation.. but economic changes like increase in inflation rates will increase the cost of thecompany and reduce the revenues and profitability of the entity. Ultimately that impacts over allproductivity of the organisation(Yang, Kueng and Hong, 2015). Rapid changes in technology,changes in trends and fashion may impact to organisational functions negatively. likemanagement need to provide training to manpower in order to train its employees .it willreduced operational efficiency for some time and increase the lead time of services. That impactsthe overall growth of firm.LO 2P2 Analysis of internal factors with reference to IKEAThe internal analysis of the company refers to the management of employees,stakeholders, suppliers, proper allocation of resources that may improve or decrease the level ofperformance of the firm. SWOT analysation of IKEA on the basis of IWAY approach isexplained as below:Strength:2
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