Analyzing the Impact of External and Internal Environment on IKEA

Business Strategy

Table of content
INTRODUCTION....................................................................................................................4
TASK 1......................................................................................................................................4
Analyse the impact of external environment on organisation............................................................4
TASK 2......................................................................................................................................5
Analyze the internal environment and capabilities............................................................................5
TASK 3......................................................................................................................................7
Examine Porter’s five force model....................................................................................................7
TASK 4......................................................................................................................................9
P4 Apply frameworks for strategic planning in importance given to company.................................9
CONCLUSION.......................................................................................................................11
REFERENCES.......................................................................................................................12
Books and Journals..........................................................................................................................12

INTRODUCTION
Business strategy is determined as a process that helps in accomplishing goal in
timely manner. It is important for organisation to maintain appropriate plan of organisations
that help in organising various activities in proper way. In assistance of this, it is important
for organisation to use latest technology for achieving competitive edge over rivalries in the
market. This assignment is carried upon IKEA. It is determined as a Swedish international
organisation that is located in Delft, Netherlands. This company was given by Ingvar
Kamprad in 1943. The management of organisation emphasized on offering different types of
goods and services like home wares, furniture and foods to its user. In this report, PESTEL
well as SWOT analysis is used for analysing internal and external environment that imposes
direct influences on performance of company. In addition to this, there are different model is
used for providing direction to its company that help in taking decision which will be
beneficial in future period of time. There are various models and theories adopted by
organisation which is explained in this assignment (Adam, 2016).
The strategic planning which is adopted by IKEA is going to be mentioned below:
Aim: ‘The purpose of company is to maintain superior reputation and goodwill in
mindset of its user at marketplace”.
Vision: “The vision of company to is to accomplish leading position around the
globe”.
Mission: “The mission of organisation is to offer good quality goods and services to
user at relatively less price”.
TASK 1
Analyse the impact of external environment on organisation
It is required for the business firm to make effective plans and schemes for the
increment of the efficiency and profitability of the organisation. In adding up to this business
environment is energetic so that it is essential to acquire changes which are related to finance
human resources and marketing for the successfulness and extension of organisation
(Weldearegay, 2017). The manager acquires PESTEL analysis for the assessment of outer

environment which implements the direct authority on the level of performance to the firm
which used to be discussed below:
PESTEL ANANLYSIS
PESTEL analysis is the substructure which is going to be used for the identifications
of the outer environmental factor applies direct impact on the level of performance to the
business organisation. It is useful in understanding level of appreciate evaluation of business
as well as plans at so many levels. In adding up to this it is required to develop the alertness
on the subject of market trends to instruct for the activation of their companies at worldwide
level.
Political factors: Factors regarding politics incorporated with administrations
regulations, systems, legislations as well as guidelines and so many supplements to which it
implements both the positive and negative characteristics on the yield of the business
establishment. Due to unstable political situations the contribution chain of IKEA which is to
be found in Europe unfavourably affects the presentation level of industrial organisation.
Resting on previous hand, the company follows the set of laws and guidelines which is
compulsory by the government which completely have an effect on the production as well as
prosperity of the administration.
Economical factors: Economic factor includes swap over the charge rate of interest
earnings and price rises as well as evaluation rate and so on. Due to economic collapse, it
results in decrement to the economics of the individual human being. And it grades in the
dropping of the purchasing control of the human being of the country. As a result it imposes
unhelpful manipulation on sales of IKEA. On the previous hand, the director emphasised
only if the higher quality products and forces to the purchaser at reasonable prices. So that, it
enlarges the image of the brand in addition to kindness of the company in the eyes of
buyer .It results in enlargement of the accomplishment and expansion of the administration at
concentrated area (Westerman, 2018).
Social factors: Social factor include faith, belief, promotes, experience and
preferences to buyers which straight influence the level of performance of company. It is
essential for the business definite to make out the changes which are needed and demands of
the customers in the order to convince them. It imposes the limited customs, cultures and