Business Strategy

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................4
TASK 1............................................................................................................................................4
P1 Apply appropriate tool to analyse the impact of Macro environmental factors on strategies
of chosen organization:...........................................................................................................4
M1 Critically analyse the macro environment to determine and inform strategic management
decisions.................................................................................................................................6
TASK 2............................................................................................................................................6
P2 Analyse the internal environment and capabilities of an organisation using appropriate
framework...............................................................................................................................6
M2 Critically evaluate the internal environment to assess strengths and weaknesses of an
organisation‟s internal capabilities, structure and skill set..................................................10
TASK 3..........................................................................................................................................10
P3 Applying Porter‟s Five Forces model evaluate the competitive forces of a given market
sector for an organisation.....................................................................................................10
M3 Devise appropriate strategies to improve competitive edge and market position based on
the outcomes.........................................................................................................................12
TASK 4..........................................................................................................................................12
P4 Devise strategic plan and management plan for company..............................................12
M4 Produce a strategic management plan that has tangible and tactical strategic priorities and
objectives..............................................................................................................................15
D1 Critique and interpret information and data applying environmental and competitive
analysis to produce a set of valid strategic directions, objectives and tactical actions........15
CONCLUSION .............................................................................................................................17
REFERENCE.................................................................................................................................18

INTRODUCTION
Business strategy refers to a set of action or decision that is used by organisation in order
to operate their business in effective manner for the accomplishment of organisational goal
within stipulated time (Timms, 2017). These course of action aids company to follow plausible
techniques and measures. Planning of strategy related with the business is termed as business
strategy planning. It will creates right direction path for company in order to reach predetermined
goal within a small period of time and that leads to increment in operational efficiency and
profitability. The current report is based on IKEA company with the component of exploring
strategical decision that is taken by company over course of years (Yuan and et.al 2020). This is
a Swedish multinational company that designs and sells ready assemble furniture, kitchen
appliances and home accessories. This company was founded by Ingvar Kamprad in year 1943
and they operates their business across globally. This assignment will cover PESTLE analysis to
identify macro environment as SWOT along with VRIO in order to determine internal
capabilities and resources. Moreover it includes porter's five forces to gain knowledge in
business competitive environment. Additionally strategic plan is devised with the help of
Ansoff's matrix.
MAIN BODY
TASK 1
P1 Apply appropriate tool to analyse the impact of Macro environmental factors on strategies of
chosen organization:
Stakeholder analysis: It refers to the analysis of various stakeholders such as customers,
employees and investors who are associated with company.
Higher power and high interest: These are the most important part who posses high
power as well as interest in business. In context of IKEA, it has several investors who invested
higher amount in business fall under this category.
High power but low interest: It is analysed that there are some stakeholders such as large
investors and more who has higher power but not have inclined towards business function. It is
essential to keep them satisfied.

Lower power higher interest: Here, it is essential to keep informed these person on
regular basis. In context of IKEA, there are several stakeholders such as customers, employees
and more who have higher interest in business functions.
Lower power, low interest: These people are not more important for company and need
to keep informed on periodically basis.
Pestle Analysis is a framework mainly used by an organisation in order to monitor
various external factors that influence business activities. It is an external analysis tool that
include several elements related to outside environment (Ciasullo, Cardinali and Cosimato,
2017). This tool helps higher authorities to formulate strategies and policies to meet with future
uncertainties and to minimize their impact. Although, these factors put a substantial impact on
business functions but cannot be control by managers. Pestle analysis of IKEA is discussed
below:
Political Factors: Political environment includes factor such as foreign trade, tax
policies, government stability and other elements that influence the sales and profit margin of a
company. It is essential for mangers to analyse these elements to make necessary changes in
their strategies and policies accordingly. IKEA that operates its business across the globe is
highly affected with political factors. Government insatiability affects distribution system of
company. As they are operating in various countries its supply chain and distribution system is
highly affected (Cardoni, Kiseleva, and Lombardi, 2020). by barriers imposed by different
countries on foreign trade. Now, China has lower down the barriers over entry of foreign brands
thus the organization has an opportunity to enhance its share at global market. Mangers of
company are looking forward to expand their business in Asian Market. As company is
operating its activities majorly in European market any change in current government will also
impact its sales and profitability significantly.
Economic Factors: It refers the economic condition of a country that influence overall
business productivity and outcomes. It consists of various factors such as revenue, expenses,
profits, employment opportunities and many more (Cardoni, Kiseleva, and Lombardi, 2020). In
reference to IKEA, it is highly affected with economic factors. Due to current pandemic
situation purchasing power of consumer has lower down thus sales and profitability of company
is getting affected. Although its sales getting affected but business entity has managed the
product of its price in such a manner that will help to manage the impact of global recession. It