Analyzing the Influence of Environment on IKEA: A Business Strategy Report

Business Strategy
Table of Contents

INTRODUCTION...........................................................................................................................3
TASK 1 Analyze the influence of environment on chosen company.............................................3
TASK 2............................................................................................................................................6
Critically evaluating the internal environment and capabilities......................................................6
TASK 3............................................................................................................................................8
Evaluate and apply the outcomes of Porter’s Five Forces model....................................................8
TASK 4..........................................................................................................................................10
Interpreting strategic direction.......................................................................................................10
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Business strategy refers to the set of competitive works and activities that used by an
organization to enlarge the business opportunities in order to remain always competitive in the
business world (Ansoff and et.al., 2019). With the help of systematic activities organization can
be able to carried out their business works and activities in best manner. it is very much
important for an organization to choose business strategy as it provides the clear goal and
objectives, obtain better understanding of actions or activities in order to gain the desirable
outcomes in potential manner. respective report is based on the IKEA which is the Swedish
furniture organization that build ready to assemble furniture, kitchen appliance and many more
products for their potential consumers. Respective report is based on the critical analysis of the
macro environmental factor and tactical decisions against it. Further it includes the internal
capabilities of the organization by including the VRIO and resource based view to gaining
competitive analysis in potential manner. it also includes the competitors analysis of
organization by using the Porter’s five force model that is one of important part of organisational
business strategy. Finally it includes the interpreting strategic direction of the organization with
the help of Porter’s generic strategies by creating the plan in order to gain important insights and
knowledge for taking effective kind of decisions.
TASK 1 Analyze the influence of environment on chosen company.
Vision:The vision statement of the IKEA is “ To create better every day life for the many
people”.To elaborate the vision of respective organization bring business idea that assist in
achieving organisational diverse range of their functional and designed products of home
furnishing to provide at best economic price range to providing better accessibility.
Mission: In Mission statement of IKEA but above mentioned phrase related with the business
goals and objectives (Cusumano, Gawer and Yoffie, 2019). Their mission is to provide one of
best furniture in best affordable price range to large no. of people.

Objectives: In their business objectives consist of make better every day living of people
impacted by their business in potential manner. for gaining the desirable outcomes they are very
much concern for environment also for building distinctive image in the marketplace.
Macro environment: It is very much potential for an organization to evaluate the business
environment for collecting the potential knowledge and information. In context of IKEA that
accessing UK marketplace that is important part of European union (Danso and et.al., 2019). In
that regards it has been analyze that there are not any kind of restriction or limitation over the
entry and exit. The another attribute that is decrease in corporate taxation by 30 to 28% that helps
in gaining higher level of profitability in the near future.
Positive aspects: Due to decrease in the tax rate in the economy of UK, it proved beneficial for
IKEA in gaining the higher level of profitability and sustainability into the marketplace.
Negative aspects: on other hand due to not any kind of restriction over the entry and exit it
creates lot of competition in the marketplace that hinders the self interest of organization in
gaining the desirable outcomes.
Economic factors: In respective factor consist of the interest rates, taxation and other kinds of
regimes that directly affect on the business works and activities (Davis, 2020). In the UK
economy due to advent of Brexit organizations have to encounter various kinds of new policies
and regimes.
Positive aspect: It has been analyze that IKEA is one of most well known and developed
organization that always focus on the growth and sustainability into the marketplace. in that
regards increase in rate of GDP, interest rates and disposable income of consumers positively
affect on business activities of respective organization.
Negative aspect: Changes in economic conditions hampers their business activities that is very
much important.
Social factors: In social factors consist of the change in taste and preferences of the consumers ,
in that regards it is accountability of organization to conduct the through research to satisfy their
emerging demand.