Business Strategy: Macro Environment and Internal Analysis

This document provides an introduction to business strategy and its importance in formulating and implementing business plans. It discusses the macro environment and its impact on organization strategies, as well as the internal environment and capabilities of the organization. The document also demonstrates the implementation of Porter's Five Forces model to investigate the competitive forces in the market sector. The subject is Business Strategy and the course code is not mentioned. The document type is not mentioned and there is no specific assignment type. The content is relevant for students studying business strategy or related subjects.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
P1. Through Implement the actual framework of Macro environment which stimulus or
impact on organisation strategies perspective........................................................................1
LO 2.................................................................................................................................................4
P2. Having a analysation about the knowledge of Internal environment and capabilities of
providing organisation through using systematic approaches................................................4
LO 3.................................................................................................................................................6
P3. By Demonstrate the implementation of Porter’s Five Forces model to investigate the
competitive forces of the providing market sector in context of organisation.......................6
LO 4.................................................................................................................................................8
P4. To implies the optimum range of Theories, concepts and interpret with diverse strategies
planning as in context of organisation....................................................................................8
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
A business strategy is the procedure as it representation about the formulation and
implementation about the approach of business related aspects in different scenario or situations
on which it helps to scrutinize the information related to the organisation specification as well as
business environment as in internal and external factor (Prohnymak, 2018). The purpose of
Business strategy is formulated to making the proper business plan and accomplish the vision,
mission, core values and objectives in a systematic way where to competing within the
competitors on the basis of the decision taken in form of effective way through the achieving the
business goals. The importance of business strategy as it propounded by the business man or
entrepreneurs to improvised their business to assessment about the lacking flaws where it
restructured through significance of business method process (Papageorgiou and et .al.., 2020).
Introduction of the company
An IKEA Company is a well established multinational group that manufactured the
innovative home appliances, furniture, other home products which are basic assorted in personal
use is produced by IKEA. It is Swedish Origin Dutch Headquarter where here is having a branch
operation office in United Kingdom which handles the factory and manufactured home
appliances and further retail products scrutinize in the better way. The venture established at the
year of 1943 as in 28 July, where number of workforce in all over the international branches are
2,11,000 connecting with IKEA company to making its growth better and setting a optimum
benchmark.
LO 1.
P1. Through Implement the actual framework of Macro environment which stimulus or impact
on organisation strategies perspective.
The background of Macro Environment is to speceify that all over market segmentation
as well as opportunity which scrutinize by company context to mapped the challenges,
advantages or disadvantages through internal and external assessment on the basis of scope and
opportunity. According to this there is elaboration of mission, vision and objectives about the
IKEA company that makes this firm very effective and most preferred by consumer perspective.
IKEA Company Mission, Vision and Objective.
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Mission: The mission of IKEA venture is “Our business idea supports this vision by offering a
wide range of well-customized, functional home furnishing products at the prices are economic
range for people can easily afford that”.
Vision: The vision is “To making creative in better way of people’s life in different manner”.
Objectives: The purpose of long term targets achieve, facilitates the sense of direction by
procuring the actual formation of aim of the company where eth workforce and working
compliances pursues according to the systematic manner (Estelami and O'Connor, 2019). They
provides high quality of product which is having long perspective of durability in long term
aspects.
PESTLE Analysis of IKEA Company
The framework of Pestle analysis is scrutinize the theory of macro environment where it
defines the organisation opportunities and challenges through political, Economical, Social,
technological, Environmental and Legal perspective that represent the IKEA company objectives
scope for fulfilment aspect.
 Political : The specification of political factor is describing about the formation and
reconstructing the government regulation and polices in context of organisation work
aspect as well as it supports the rules and regulation on which each individual company
has to abide the terms. It involves the political influence stability, not having an existence
of corruption as all thes factor and rest of others are compiled and represent the outcomes
which has to be generate in an work discipline manner. On the perspective of IKEA
Company, as they regulates their business in United Kingdom region where the rules and
regulation are strictly follows according the UK governance with all respective
companies where the job generating(employment) is essential and which it allows the
benefits internally. The rules and regulation of United kingdom are in rigid and
vulnerable where the challenges also active through Brexit market whereit will not allows
the outsider business transciations like Germany, Zurich etc.
 Economical: The framework of economical factor is propounded overall activities
which comes under economic background as it regulates through market influences as it
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reflect the money value, increasing and decreasing of demand and supply in context of
product, dynamic changes in currency rates, inflation and interest tax etc. Behalf of IKEA
Company presumes in the economic context in United Kingdom as it have a benefit that
it will easily generates the value of revenues as the value of pound currency is much
efficient that makes the organisation revenue increase and decreasing factor as with the
company growth and it scrutinize the development through the modification in
background of product quality within the depend upon people taste and preferences as
well as the price can change the product brand value in market in positive or negative
way.
 Social: The representation about the factorization of social implementation is supports to
identify the targeted customer through the demographic perspective in the format of age,
gender, religion and terms with condition of selecting product to deliverables to te right
form of consumer (Lenning and Andersson., 2019). Similarly for IKEA company as they
established their desirable business in United Kingdom they need to differentiate the
product specification to measured the consumer taste and preference on which it would
easy to dealing the product business with them.
 Technological: The factor which are comprising about the technological is about the
resources which confronts that organisation is allows the best upgraded techniques and
tools which makes the work flexible or in another words new tools and machinery are
scrutinize to implies in work strategies as it supports to completion of the work. On the
context of IKEA company as they propounded the technological aspects to brings the
new updated software and technologies in machinery available to workforce can applies
in the manufacturing the product easily to making procure the raw material used in it and
accomplish the task in before allotted time.
 Environmental: By having the perception about environment is to pursuing any
business for stability or manufacturing products for making fulfil demand of consumer as
well as it should be sound like as ethical there is not existence about the unethical and
wrong way procedure of work execution. Similarly in IKEA Company also follwos the
United Kingdom polices relsted to the environment perspective nature as they supports
the green environmental and some social activity allows for development to the society
welfare as IKEA company also presumes to contributes their profit share towards the
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environment aspect as to making it clean and generates the ethical products where the
people and environment not get harm (Urquhart and Haque, 2018).
 Legal: This factor is very essential in Pestle analysis where it guidance provides to
making abide the terms and condition of company brand performances within undertaken
through policies as the legal factor is comprising about the compliances framed towards
the working process (kronblad, 2019). The representation of IKEA company in United
Kingdom laws and regulation which improvised and get knowledge about the tactics used
in the legal aspect of company products should be manufactured as in authorized manner
and policies prescribed which is formed to not create any type of business damage.
As per the above Pestle analysation framework describing about the external and internal
macro environment in the perspective of IKEA Company, there would be better selection
within the business continues through United Kingdom region, Political factor and Social
factor would be the better as consideration for Ikea company it would supports to guide the
norms and policies related the business in United Kingdom how the policies are different
from other countries as the value of currency pound is highly efficient with other countries
currencies and Social factor helps to scrutinize the product differentiation and also guides
about to dealing with the product within the right form of the customer as in international
market (Zhao and Dou., 2019).
LO 2.
P2. Having a analysation about the knowledge of Internal environment and capabilities of
providing organisation through using systematic approaches.
By having the proper information regarding internal environment where it develop the
internal scenario of organisation within the systematic approaches on the basis of organisation
larger strategic schemes. VIRO model helps to identify the internal flaws of the organisation as
per the according of the market position, performance of product, employees performances etc.
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VIRO is consists the full form of Value, Imitability, Rarity and Organisation as it is explained
with proper description about VIRO model in IKEA company market scenario as per United
Kingdom Based are as follows:
Value: Through the optimum utilisation of resources in the organisation performance as it helps
to reduces the threats from the market place. As it indicates the demographical, technological and
other macro environment aspects information provides which makes helps to company to
scrutinize the threats and improvised the work efficiency.
Rarity: It creates a strong impression about company when it contains or having the presence of
highly valuable resources or techniques to deal with competitors in the market as it indicating in
terms of products.
Imitability: By making already realisation about the having of rare sources of techniques and
resources which are not appropriate enough to undertaken the opportunity from the competitors
as this is only happens when there is shortage of investors or not having the capability to gight
against the competitors such as related with cost, product raw material and not having liquidity
supports.
Organisation: It is a itself a backup which having full optimum resources and maintained the
workforce as well as obtained the right form of resources in terms of financial formation,
equipment and machinery, having guidance like leaders and mangers that emphasis about the
formal reporting structure, management control system and compensation (Donoghue, Hannola
and Mikkola, 2019).
VIRO MODEL:
Resources Valuable Rarity Inimitable Organized What is the
result?
Effective market
reputation
Yes Yes Yes Yes Competitive
Disadvantage
Presence of
consumer in
international
Yes Yes No Yes Partially
competitive
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market
Awareness of
brand value
Yes Yes No Yes Temporary
competitive
advantage
Workforce and
high customer
rating
Yes Yes Yes Yes High
Competitive
advantage
According to the VIRO Model is describes about the market position of IKEA company
as well as the perception frame in consumer perspective awareness related to product and the
performances in national and international market. Employees pays their efforts to making the
products more efficient and productive as for that it gives the favourable outcomes, where the
high performance gives the benchmark as international level. The awareness of the brand is more
people attracted when IKEA company provides the better services through workforce
productivity and implies the managerial approaches to accomplish the demand of the consumer
and clients.
LO 3.
P3. By Demonstrate the implementation of Porter’s Five Forces model to investigate the
competitive forces of the providing market sector in context of organisation.
The constructing of Porter’s Five Forces is to having analysation about the opportunities,
scopes and challenges about the product and market relationship within existing or new context
of organisation perspective.
Introduction about Porter’s Five Forces:
The framework of Porter’s five forces is generates the full-fledged information related to
product and market relation as well as comparison in context through performance situation in
background of market players as power of supplier and buyers where they rapidly investigate the
scope and opportunities about the organisation product and mapped the performance of the
particular product in the market point of view. As it determined through about IKEA Company
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as their product performances are presuming in a correct form of way or not by implements the
strategic plans.
 Threats of Substitute: The term derived about the threat is when in market if there is
another substitution of product of similar featured qualities of another company which
overtake the value and existence of existing brand product (Wiewiora and
Kowalkiewicz, 2019). As for IKEA company product as they sells retailing
manufactured items of groceries, home appliances in United Kingdom but there is
massive kind of threat would another companies are also well named in same region as
well as same industry Like Tesco or Asda they can be substitute as in matter of product
where the consumer preferred more Tesco and Asda products which can be huge
complication for IKEA Company in a product perspective.
 Threat of new Players: Through the organisation compete with their rivals and in
market when there is solid formation of competition the probability of thereat in context
of new players such as IKEA company is upcoming retailer business in United Kingdom
region country where the company has to faced challenges but after proper
establishment of company there is uncertainty of new player existence in the same
retailing market to captured the market share. Therefore, the threat of new player is
moderate in nature as per the condition.
 Bargaining power of suppliers: As per the scenario of the company IKEA as they have
high power of bargaining of supplier where the consumer are demanding more product
from the market as well as IKEA is the only company in retail which manufactured high
quality product and deliver in market within economic price (Jain, 2019). As they have
limited stores in United Kingdom where they produced high efficiency of raw materials
and near by stores are actively participants for selling and distribution of product and
services.
 Bargaining Power of Buyers: On the consideration of IKEA business aspects as they
selling and distributing the product in United Kingdom and overall market with high
perspective of product specification (Isabirye, 2019). The company allows to introduced
the value of product in pricing terms in a economic manner where more buyers are
having low power of bargaining in buyers because IKEA introduced the price rate in
their product as very low published.
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Throughout the performance and analysation of IKEA business venture as they have to face
many challenges and opportunities in terms of new players, substitute in product perspective as
well as to retain the customer by eliminating the barriers which comes between product and
market as price, company tries to implement the pricing strategy which is different within its
other company fortune. While enhancement of pricing strategy IKEA will easily retain the
clients towards their business aspects .
LO 4.
P4. To implies the optimum range of Theories, concepts and interpret with diverse strategies
planning as in context of organisation.
According to the Theories, concepts and strategy will implement by on method called
Porter generic model as well as the proper optimum strategic plan about the organisation for its
further goal accomplishment purposes as which it also helps to support to maintain the strategies
planning to making the business approach in the compliances oriented way (Morsing, Oswald
and Stormer, 2019).
As for this analysation the situation about IKEA Company and restructured the effective
business plan for it by using Porter Generic Model.
Introduction of Porter Generic Model:
The method or study of Porter Generic Model is prescribed about the business persuasion
of a respective organisation or company to mapping the competitive advantages across it chosen
the market scope and opportunities which helps to making understanding the nature of eth
market in which business to run as per the norms and approaches which ahs implement with
eliminate the challenges (ÜZÜLMEZ, ATEŞ, and AKIN, 2018).
There are approaches of Porter Generic which has scrutinize by the individual company to
making the decision effective in terms of dealing with competitors in the competitive market: The role of Cost leadership strategy: As per this generic model it helps to making the
increasing of sales in the market to creating a ahead in ranking base within the
competitors (Inada, 2019). By having an objective to increasing of profit through
reducing of sales, as to implement the charging industry of average form of prices where
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consumer can easily purchase the product of IKEA company as they already approaches
this strategy to introduced the product in economic price. Apart from it it also gives a
leads towards the charging of market share as by applying lower prices while making a
reasonable profits through influencing reducing the value of product costs. It implies the
high standard capital invested in upgraded technologies which directly impact in cost as
in reduction. The effective nature of Differentiation Strategy: As this form of strategy is making te
product reformatting in different level of specification in built where it make the product
representation more attractive in nature where consumer are get clashed and interacted
and approached by them (Vidmar, 2019). On Competitors it create a pressure to dealing
with their existing product performance that makes slow down in productivity in the
market on basis of performances. It requires to making a effective source of research
such as to consult within an experts , development and new creativity involved. Having a
capability to inputs high specification raw material in product and produce the high class
of services. Similarly IKEA Company will approach the similar strategy to making
improvised and upgraded in their product where they look like different among with the
competitors, as well as provides new inputs specification on the services to deliver the
high form of products like in groceries, home appliances etc. And the marketing team of
IKEA company having a role to promotes the products in different levels on which
market where they get to understands the benefits and offered the good amount of
opportunity. The necessity of Focus Strategy: As per according to the market environment this
strategy makes to understand the focus on the overall performances and market aspects
of products updates which helps to the company in future outcomes (Ferraris and et .al.,
2019). With the background the IKEA Company they determines the proper analysation
of new changes comes in market which needs to abide that can be provide some sort of
dynamic changes as well as it can lead towards the profits base. As the scenario where
the competitor of IKEA company introduced the product with high form of qualities in
expensive price rates, where the IKEA company will launch the similar product within
the low price just to make understand the consumer behaviour and attitude to buying the
similar product in price differentiation. Policies and other regulation brings some certain
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changes in organisation working culture that has to maintain and scrutinize detailed wise
for generating the optimum outcomes.
Now, approaching the market STP model where it helps to identify the organisation actual
performance as per the basis of Segmentation, Targeting and Positioning.
Market Segmentation
The introduction of this method is about the organisation main purpose in the market
within its product description as in what purpose they are dealing and on what terms they need
to achieve the aspects of marketing segmentation (Zastempowski, 2019). As IKEA company
marketing segmentation as per the United Kingdom based business environment as they are
keen to looking for the consumers for basic product related to home appliances, furnishing and
items which they introduced in economic to high range of product and services deliverables as
per in the market.
Targeting Marketing
As this formation is assorted to choosing the customer in demographic factor aspects
where an organisation commits the detailed marketing research about their product scope and
analyse the consumer behaviour style as well as perception regarding with product identification
(Emblen-Perry, 2019). Similarly for IKEA company they have targeted as per the socialise factor
to making deeply analyse the consumer behaviour on what they have targeted upper and middle
class of the consumer to dealing of their product in the market scenario.
Marketing Positioning
It represent the market position related to the product performances which decide steh
position or rank overall in the international market, as IKEA company have a position in well
structured as well as having better goodwill in the market a sit because they have produce and
manufactured right amount of product quality and services on that note they offers to the
consumer with the great buying experiences to providing lower rate of product specification
introduced in the market (Nesse, 2018). Market Positioning influences the clashes between
competitors where to having one motive for attaining the good amount of goodwill as well as
profit maximisation.
Monitoring and Controlling
To mapping the unwanted errors and declination of the performances from the market
issues and problems to scrutinize in detailed way of manner. To making having control in the
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workforce flawless performances in marketing strategy to applying where the perfect leader or
manager could help to eliminate the negative factor such as discrimination, biasness etc.
Drafting the effective marketing planning of IKEA company business in future aspects in
behalf of above porter generic method and market segmentation, targeting and positioning.
According to the detailed study of the above Porter Generic Model and Market STP
model the business plan strategy of IKEA company would be like they have abiding the
approaches following business tactics which improvised their internal and external performances
in the market perspective are:
 As per to perform in competitive market they have to implies the Differentiate Strategy
for restructuring or modified the products and services in a time to time duration where to
attract more consumer from market as well as creating a good impression within the
consumer perspective.
 By implies the strategies of the cost leadership to making the increasing of sales there is
requirement of cutting cost and improvised the market share before the competitors
acquires.
 The effective leadership skills is required to maintain and controlled to provides the
guidance about the new strategy related to business as which implies or follows by
workforce and company marketing team.
 By showing concerned toward the existing customer where it help in to retain and having
a sustainability image in the market.
 Having a proper clarity about the objective in IKEA Company which provides the better
products and services on the behalf of retailer company. As they will produce the more
growth as well as attain new aspect about the manufacturing activities.
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CONCLUSION
As on the behalf of above report of Business strategies is compiled and summarization about
the different approaches implement and analysation to mapping the market scenario as it comes
to conclude that through macro environment describes how an retailer company can effect
through overall external factor as well as many challenges and opportunities are come across
within the presence of macro market. On the to approaching the VIRO model to scrutinize the
performance and market position of the respective company where it supports to identify the
basic business strategies within the guidance to provide effective decision making generates.
Through the supports of Porter five forces it provides the possibility of market rivals,
challenges, perception about consumer for products. At last there is part of Porter Generic model
which emphasis about the Market situation in competitive advantages opportunities as well as
product performance within the comparison of competitors products and elaboration of market
segmentation, targeting, positioning prescribes the specific company strategy to having purpose
of entering into market, targeted customer and reformation of positioning within having
competitors presence.
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