Business Strategy for IKEA

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
LO 1.................................................................................................................................................3
P1 MACRO ENVIRONMENT OF IKEA..................................................................................3
LO 2.................................................................................................................................................5
P2 INTERNAL ENVIRONMENT AND CAPABILITIES........................................................5
LO 3.................................................................................................................................................8
P3 PORTER'S FIVE FORCES...................................................................................................8
LO 4.................................................................................................................................................9
P4 INTERPRETING STRATEGIC DIRECTION.....................................................................9
REFERENCES..............................................................................................................................13

INTRODUCTION
A business strategy is a set of competitive moves and actions that a business uses to attract
customers, compete successfully, strengthening performance, and achieve organisational goals. It
outlines how business should be carried out to reach the desired ends. IKEA is a European
multinational group that designs and sells ready-to-assemble furniture, kitchen appliances and
home accessories, among other useful goods and occasionally home services. Founded in
Sweden in 1943 by 17-year-old Ingvar Kamprad, IKEA has been the world's largest furniture
retailer since 2008. This report covers questions such as PESTLE Analysis of IKEA, Stakeholder
Analysis, Mission and Vision Statement of IKEA, Objectives of IKEA SWOT Analysis of
IKEA, VRIO Analysis of IKEA, Porter's Five Force Analysis of IKEA. Apart from this this
study also highlights the fact that the company has a lot of room to improve their quality of
products so that retailers who are selling online cannot affect their profitability as the company
already follows the cost leadership strategy.
MAIN BODY
LO 1
P1 MACRO ENVIRONMENT OF IKEA
IKEA is one of the leading company for furniture though the company is also dealing
with kitchen appliances and home accessories, and they must analysis the factors which are
influencing the company's macro factors so that they can make the company work more
efficiently because it is very important for any company to work efficiently (Hernández-Perlines,
Moreno-García and Yañez-Araque, 2016). To work efficiently the company must know the
factors which are influencing the company's growth. In macro environment, understanding and
analysis of the factor like political, social, economic, technological, legal and environmental
factors must be clear with the company so that the company can grow better. The following
report will discuss the factors in detail.
Political Factors
The company is expanded itself in 41 countries and the political factors are very different
from one country to another country. The company which is having a political stability this
company will also have stable economy in the company. The company must have economy
stability because that will make the company stable and will not have to lose a location because
of this factor. Recently China and India have become friendly to the foreign market and the

company will make a great place for itself in the foreign market because of these political factors
and spreading into Asia would be very good for the company (Lozano, 2018). IKEA company is
now jumping to take this opportunity forward so that the company can easily make a profit for
themselves.
Economic Factors
The economic factor plays a very important role in the company of IKEA and other
company's in the world and the world's economy will also play the role in the company. There
are still few country's which are overcoming from the recession which has come in 2008. The
company IKEA studies the behavior of the customers so that they can innovate and create
products for the customers so that the customers get what they want and the company will be
able to maintain their economy (Consultations, Plans and Assistance, 2016). The company uses
the conservative approach for the prices so that the customers think that the company is
providing them with quality products with affordable prices.
Social Factors
The culture plays a very important role in people's life's therefore the company takes
appropriate measures so that they do not offend anyone. The company does not put the same sex
couple pictures when they are promoting their products in Russia because homosexuality is not
acceptable there (HunTer, 2016). IKEA company is now thinking practically so that the
company can make appropriate steps for attracting more customers because it is very important
for the social factors to be considered so that the company is not offending anyone and the
company will be making profits easily.
Technological Factors
The will company have to work on there technology aspect because the competitors have
started to get online and this company is still using the catalogs for their promotions. The
company is not even online yet and it is very important to get digitized because that has a larger
market. IKEA will have to get online because that will not just make the company get more
customers but the workload of the employees in the company will also reduce (Lim, Chalmers
and Hanlon, 2018).
Legal Factors
The country is spread across 41 countries and it is very important for the company to
follow the legal structure of all the countries if the company wants to operate in the other