Impact of Macro Environment on IKEA: A Strategic Analysis

BUSINESS STRATEGY
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Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Macro environment factors impact on IKEA by applying relevant frameworks...................3
Stakeholder Analysis of IKEA...............................................................................................6
TASK 2............................................................................................................................................7
Models use to determine internal environment & capabilities of IKEA................................7
TASK 3..........................................................................................................................................10
Apply theories, models and strategic planning for organization..........................................10
LO 3...............................................................................................................................................14
Evaluating competitive forces of IKEA marketplace with help of Poter's five forces model14
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17
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INTRODUCTION
Business strategy is a key element that a company could use to sustain its business for
long term period within specific market or sector. It is one of the most beneficial actions that
managers while performing in well known brands can take to achieve set goals and objectives. It
can be defined as a common direction set for companies who have operated their venture
functions in the world of business. An effective business tactic would support a firm in form of
taking decision where its management efforts and key resources are best spent. The current
assignment will be based on IKEA, which considered in list of top international furniture
designers and home accessories as well as appliances providers brands in the world. This study
will be divided into three tasks, task one will explain impact of macro environment upon chosen
brand and its tactics as well by applying appropriate frameworks. Furthermore, task two will
clarify internal capabilities and environment of company by utilizing suitable concepts. This
report will also justify critical analysis of internal environment that define key strengths and
weaknesses of firm capability, skill set and structure. Moreover, it will describe application of
theories, models and approaches in context of strategic planning for organization.
TASK 1
Macro environment factors impact on IKEA by applying relevant frameworks
Mission-
The mission of IKEA Company is to give excellent experience to its target consumers
after selling products and services.
Vision-
Organization vision is to offer a huge range of well created, functional home furnishing
items at low prices that allow people to purchase.
Business objectives-
Aim-
IKEA goal is to increase customer base and generate profits even better than its business
rivals.
Strategic intent-
Its strategic purpose is to double number of their yearly outlet opening in an effort to
capture a piece of increasing market in United States, Russia and China as well.
Different strategic direction-
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There are different forms of strategic directions available in the world of business that
IKEA could consider in order to gain competitive benefits such as set clear vision, mission,
adopt principles and values as well.
PESTLE analysis-
Macro environment refer to overall, wider economy and elements that affecting it a
venture versus a micro environment, which concentrated on particular industry of sector (Otieno
and et.al., 2020). It comprises different components that exist in entire economy. There are
ranges of models available in the business world which can use in context of analysing forces
that put negative or positive impact on chosen brand.
Political factor-
There are varieties of political factors accessible in the world that could affect businesses
operations and strategic management decisions. It includes political instability or stability,
changes in trade policy, tax rate, trade restrictions and others (Bitar, Hamadeh and Khoueiri,,
2019). In case of IKEA company, change in tax rate put negative impact on business expansion
strategy and overall practices of chosen firm, as it bring a lot of challenges in front of
management in term of paying extra charges on each trade activity which drive their focus on
replant overall tactic in new manner that must be quite challenging. Due to this factor,
organization needs to pay require amount or charge which make them able to operate its venture
within more than 40 plus nations in effective manner. Increasing charges on trade process could
give negative experience to company and its management as well, it needs more efforts to handle
overall situation.
Economic factor-
Unemployment, income rate of people, currency exchange, inflation, nations GDP and
purchasing power of consumers are consider as economic factors that affect a company and its
current practices in two different manner, negative and positive. Unemployment is one of the
macro environment elements that put negative impact on existing employment strategies and
plans of IKEA (Shah and et.al., 2020). Furthermore, it also affect entire management activities in
term of developing plan to hire new people who are eligible and can work effectively as well as
productively. Because of this factor when government create a guideline to recruit new people in
all companies, it put a lot of pressure on human resource manager and its team in form of
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