Analyzing the Impact of Macro Environment on Business Strategy

Business strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1 ...........................................................................................................................................3
LO1: Analyse the impact of macro environment on the organisation.........................................3
TASK 2............................................................................................................................................8
LO2: Access internal environment of an organisation................................................................8
TASK 3..........................................................................................................................................10
LO3: Evaluate and apply porters five force model....................................................................10
TASK 4..........................................................................................................................................12
LO4: Prepare strategic plan.......................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
Business strategy include the combination of decision which is taken as well as
performed by company in order to attain the competitive position within market. It basically
comprises of well defined strategy which is prepared by business to set particular goals or
objective require to face the adverse or unforeseen circumstances (Apenko, 2017). This is the
systematic thinking approach of the whole system by evaluating the micro or macro environment
factors to determine the desirable output. For the better understanding of report IKEA company
has been selected which is multinational retailer and are specialised in designing the useful home
accessories like kitchen appliances or furniture. In terms of furniture the company is considered
as the largest retailer which operate in more than fifty countries via physical stores or through
online platform. This report cover topics like impact and influence of macro environment on the
business. Analysis of internal environment and the capabilities. Evaluate as well as apply
different models within the particular market structure. Further, use different theories and models
by devising the strategic planning for the given origination are covered in this report.
TASK 1
LO1: Analyse the impact of macro environment on the organisation
Mission: The mission of IKEA company is to maintain the long term customer
relationship by remaining customer oriented in order to understand their requirements and bring
significant chances in the exiting products.
Vision: The vision of IKEA company is to offer different varieties of well designed
furnishing product to different national and international customer at affordable prices in
comparison to the competitors.
Objective: It is the prominent part of business that give sense of focus or direction to the
internal staff of an organisation (Chen, Eshleman and Soileau, 2016). The SMART objective for
the IKEA company consist of five elements which is explained below:
Specific: This mean the objective need to be precise and clearly defined like IKEA
company's specific goal is to maintain the quality of product by reducing unnecessary
expenditure of company.
Measurable: As per measurable criteria the goal can be self sufficient to measure the
progress of business by achieving the set target. The company usually offer the product at

reasonable prices so the target of internal staff is to enhance the footfall of IKEA retail store by
10% within 5-6 month.
Achievable: This refer that the objective can be difficult but ultimately it need to be
feasible so that employees remain enthusiastic to attain the target. In context to IKEA company
offer training and development programme to groom the existing skills of employee which help
them to increase the footfall of company by remaining competitive.
Realistic: A clear defined goal needs to be realistic and within the reach of an
organisation. Further, the constant supervision and guidance of IKEA company managers assist
the staff to reach out the target of company.
Timely: It represent the specific timeline within which the purpose of the organisation
need to be attained. Like, the transition period for staff to enhance the overall sales of company
is 6 months.
Pestle analysis
IKEA company operate globally and has around three hundred brick and mortar outlet
that function in different geographical area. Due to globalisation there are different external
forces such as social, technology as well as political influence which need to be analysed by
company otherwise it can affect the brand image for home furnishing products (Cubas‐Díaz and
Martinez Sedano, 2018).
Political factor: Political forces represent the economic stability that differ from one
nation to another as it help to enhance the profitability of company. As IKEA company operate
in forty countries so before diversifying the manager understand the attitude and policies of
government.
Positive: IKEA majorly operate in developed countries where political forces are
relatively stable. Along with that it is planning to expand in Asian market because the
government of India and China lower down the political barrier in order to enhance the presence
of international brand.
Negative: Although the emerging economy makes effort to promote the entrance of
multinational companies but rep tape is again an issue that can slow down the growth of
company.