Impact of Macro Environment on IKEA: A Strategic Analysis

Business Strategy
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Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Affect of macro environment on selected firm.......................................................................3
TASK 2............................................................................................................................................7
Internal environment analysis and capabilities of company...................................................7
TASK 3..........................................................................................................................................10
Strategic management plan...................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
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INTRODUCTION
Business tactics or strategies can be defined as decisions and appropriate actions that
each organization can takes in order to achieve set goals and smart objectives of its ventures. It
can be developed in recent time especially to gain competitive edge within specific sector, which
is really very important to do. This term clearly defines what a company needs to do to obtain
desire outcomes that can aid direct decision making procedure relate to resource allocation and
recruitment. The current assignment will be based on IKEA, which falls under leading kitchen
appliances, furniture and home accessories provider companies in the world. This study will
explain impact of macro environmental factors on chosen brand. Furthermore, it will define
internal capabilities and environment of organization by applying appropriate models. This
report will describe strategic management plan that will be developed including range of correct
models, concepts, approaches and theories.
TASK 1
Affect of macro environment on selected firm
IKEA is the best and well known home furniture organization in the whole world (Al
Shuwaler and et.al., 2020). This Swedish firm excellently sells a wider category of interiors
design products and home accessories to target customers. Mission of this company is to develop
a better everyday life for each customers either new or existing one. The vision statement of
chosen firm is to build overall foundation based on openness, honesty, fairness and trust. The
goal of company is to offer quality products or services to buyers. The main objective of
business is to give workers as well as employers sense of progressing direction. IKEA can
achieve all these things after analysing external environment, and then taking right decisions.
Strategic intent of this firm is to gain competitive edge. There are range of frameworks has been
accessible in the world of business that can be used to conduct external environmental analysis.
PESTEL analysis-
Political factor-
Political stability, instability, tax rate and trade policy are different types of political
factors that have an impact on any company (Shen, Bui and Lin, 2017). Political stability is one
of the elements that put positive impact on IKEA business growth and success. It also leads to
economic stability which in return increases sales and profitability of company. Due to this
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factor, organization can achieve its goals and objectives in systematic manner. With political
support firm can easily enter into new market place and collaborate with any other reputed brand.
Economic factor-
All economic factors play vital role in environment of business. In case of IKEA,
unemployment is one of the biggest components that influence strategic aims and objectives of
firm positively. For example, company can hire those people who lost his or her jobs and seek to
work with well reputed brand like IKEA. This factor gives a new chance to management,
through which they can achieve above aims in effective manner (Lorincová, Schmidtová and
Javorčíková, 2018). Human resource management can recruit skilled and talented applicants who
are able to contribute gaining competitive benefits in marketplace.
Social factor-
Buying habits, lifestyle change, income level etc. are appropriate examples of social
factors that affect strategic plans and objectives of organizations. Preference of each buyer has
change according to trends in market, which directly influence profitability and productivity of
IKEA in negative manner. When people demand for new and stylish furniture design, it direct
put pressure on organization for which they have to conduct deep analysis of market. It impact
negatively on current production strategy, plans, marketing activities and other things.
Technology factor-
Technology advancement is the most effective and influencing factor that impact
positively on sales, revenue and success of IKEA (Sánchez-Gutiérrez and et.al., 2019). For
example, with digital marketing tools and platforms, organization marketing department can
reach at global level by promoting their business via Facebook, Instagram and Billboard. It can
be considered as the best opportunity for chosen brand which they can grab to gain all benefits
like intense competition level. It can help to increase consumer base and build strong bond
between management and buyers.
Environmental factor-
Government and consumer concern for environment safety could put positive impact on
current practice and strategic goals of IKEA, because they already invested in eco friendliness.
Organization More than 1 Billion has been invested in context of renewable energy in poorer
countries. Furthermore, they also invest in wind and solar panels that save electricity and
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