Context of Business: SWOT and PESTLE analysis of Ikea, Leadership Styles, and Corporate Social Responsibility

This report analyses the SWOT and PESTLE analysis of Ikea, compares and contrasts different leadership styles, and discusses corporate social responsibility in the business procedure.

Context in Business

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Frame SWOT and PESTLE analysis of Ikea and the impact of changes in PESTLE that create
threat and opportunities for an organisation................................................................................1
Compare & contrast different leadership styles and provide recommendations for the best
leadership & management approaches........................................................................................3
Recommendation of a suitable leadership style..........................................................................4
Corporate social responsibilities in the business procedure........................................................5
Writing a reflection on experience in preparation of the report..................................................5
CONCLUSION ...............................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Business in context is the concept which includes those factors that is having direct or
indirect impact on the operations of the business. This also represents the various issues in the
different business so that they can rightly improved and all the business activities can be run an
appropriate manner(Sari, Mariam and Sinaga, 2021). For understanding the concept of business,
the report is based on the Ikea, it is the leading company which is operating their business in
furniture, home ware, kitchen appliances and certain goods which are effective for home decor.
This report will analyse the factors which is presented in PESTLE analysis and the impact on
operations business. This also analyse the internal capabilities by conducting the SWOT analysis
by which threats and opportunities can be identified for the business. Moreover, different
leadership style is being elaborated and their comparison so that right leadership style can be
recommended to the company in order to attain organisational goal. At last, It reflects corporate
social responsibilities which is influencing the business along with the reflection of the report.
MAIN BODY
Frame SWOT and PESTLE analysis of Ikea and the impact of changes in PESTLE that create
threat and opportunities for an organisation.
SWOT ANALYSIS
It is the framework which helps in analysing the internal and external capabilities to
evaluate the profitability and accessibility of business by which they can meet the competitive
advantage. In UK, Ikea is a leading company and that is important to analyse the SWOT
analysis( Shahzad, Raja and Hashmi, 2020). Thus, It helps in conducting the business by
analysing the different aspects of the marketplace related to the internal strength and weakness
along with the external opportunities and threats that are explained by which they can have the
have the long term term sustainability.
Strength Weaknesses
 The main contribution of the company
is their clear vision is to add value to
the customer buying behaviour by
which they can contribute in upgrading
 The main weakness of Ikea as they are
offering less quality products to their
customers by using low pricing
strategy. This lower down their market
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the market(Kallenos, 2021).
 Nominal prices of the Ikea products
and services are the main strength by
which they can attract the large pool of
potential customers.
image.
 The Environmental concern is major
concern in the operations of Ikea and it
shows the weakness for the company
while communicating their policies to
their employees, stakeholders and
customers.
Opportunities Threats
 They are launch the new business
model in which they focuses on
renovating their products so that they
can rightly attract the large customer
base and main concern is to use the
green and eco-friendly products which
helps in establishing the good brand
image in the market.
 They can expand their business by
using online platform where they can
easily attract the large group of
potential customers and generate huge
profits with easy access to the
customers.
 Changing law and the rules within the
country badly impact the price and the
functionality of the Ikea goods and
services.
 The main concern for the Ikea is
emerging competition in the market
place(Jia, 2020).
PESTLE Analysis
It is a tool which is used as situational analysis for the business evaluation purpose, it
evaluate the highly dynamic external business environment that affect the management
decisions. It give an overview of different macro-environment factors to be taken into
consideration and help in understanding the market growth and decline, potential and business
position etc. In context of IKEA, certain factors are given below:
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 Political factor- It include government policy and action that affect the cost of
production and long term sustainability of the organization. Opportunity- IKEA has a
blessing of good relationship with India and China, because these two countries have
become more open to international brand, and enter into Asian market is a positive shift
for IKEA. Threat- IKEA stores are open in more the 41 counties and each country has
different policies and political influences due to this IKEA may lose profit in one location
over another because of their different charge and standard.
 Economic factor- These factor affect the economy include tax rate, interest rate and
laws etc. Opportunity- In there is 25 to 30 % growth in workforce productivity in last
two decades without reflecting gain in salaries, it enable IKEA to hire skilled workforce.
Threat- Due to weak power of the pound against the euro and dollar, IKEA doubled the
number of manufacturers goods locally procured in the UK(PSTLE Analysis of
IKEA,2018.)
 Social factor- These factors are related to cultural and demographic trend of society.
Opportunity- Knowledge of immigration policies of the country enable IKEA to hire
talent globally to work in that particular market. Threat- IKEA have to analysis and
follow the different culture of different country before launching any marketing
campaign for its products.
 Technological factor- These factors are linked with innovation in industry and overall
economy it include R&D, automation and change in technology etc. Opportunity- High
level investment in technology create high chance of building a self sustaining ecosystem
to drive innovation which help IKEA to hire best people in business. Threat- To enter
into a new market E-Commerce infrastructure is critical for IKEA, it should evaluate
technology infrastructure( Dong and Bárcena-Ruiz, 2021).
 Legal- It pertain to any legal forces that define what an organisation can do or cannot.
Opportunity- IKEA is a new player, so it should not worried about monopoly and
restrictive trade practices law. Threat- It should ensure that their products are safe
otherwise IKEA would have to face lawsuit against them which may create bad
reputation.
 Environmental- It is the aspects which is related to the
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Compare & contrast different leadership styles and provide recommendations for the best
leadership & management approaches.
Leadership is defined as the ability by which an individual influenced the other person to
follow their actions by which they can make the effective team with in the organisation so that
they can rightly discuss the team working aspects and directs to move for attaining the task in an
appropriate manner. Leadership is the understanding among the individual by which they can
lead the particular group and also understands the behaviour of their followers. In context to
Ikea, there are different type of leadership style which are explained as follows:
 Transactional style of leadership- It is the style in which the rewards and punishments
are depending upon the performance of the followers that employees have to give their
effective performance in order to get the rewards or the other benefits or can be said that
if the subordinates perform best they will get the reward for the better performance so
that they can have the better results within the organisations. Therefore, transactional
leadership style directive approach in which the leader order the staff member about the
task and their results and employees focuses on attaining the objective by which they can
get the deserving rewards. In context to Ikea, this leadership style express the working
standards and the leaders set the work polices in order to reach the goal with the aim of
achieving it. They are emphasising on maintaining the status quo which ensure the
smooth running of the business and they are influence the employees by which they can
have more career opportunities.
 Transformational style of leadership- It is the leadership style in which the leader is
emphasising on having the change within the organisation and inspire the employees for
their better working. In every task, leader play an significant role to influence the
employees for making changes and accepting the change in the various operational
activities so that employees can come out from their comfort zone in order to perform
better(Cohall, 2020). There are ample of opportunities by which employees can get the
career advancement and the growth. This also helps in having the getting the prominent
results ans they can have the better approach for making good command of different task
of the business. This also leads to have the executing change by which they can
encourage the staff so that they can full fill the demands of the market appropriately.
Similarities between transformational and transactional style of leadership
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It is vital for the organisation to analyse the similarities among the different leadership
style so that the best approach can be adopted by the company in order to run the whole business
operations in an well-defined manner. Both the techniques includes the followers and the leaders
for the sharpen purpose to benefit from one another. They are having the certain aspects by
which they encouraging the staff members by using own tactics so that work can be effectively
attained. Thus, both the leadership style useful for meeting the competitive edges in the UK
market.
Difference between transactional and transformational style of leadership
Transactional style leadership Transformational style of leadership
 It is the leadership style in which the
leader majorly focuses on maintaining
the status quo by which they can
examine the overall
performance(Behrangi, 2020).
 The leader influence the staff by giving
deserving rewards and also punish
them for their ineffectiveness in their
job or for the unethical behaviour.
Hence it is responsive leadership style.
 It is the leadership style in which the
employees are being encourages for
getting innovation and the certain
changes in order to establish
effectiveness in the operations.
 They tends to influence their staff
member by using two way
communication s that the employees
can feel satisfied which resultant in
getting effective results. Hence, the
leader are proactive in nature.
Recommendation of a suitable leadership style
Leadership is defined as the action of leading the group of people within the organisation
or it is the state or position of being a leader. Choosing the particular leadership style states the
overall action plan and the way of operating all the business activity within the organisation.
Taking the consideration of Ikea, they are facing issues related to the change in government
polices and the inflation, laws by which company is facing huge looses in their operations and
also affecting the chances of expanding their business. In order to cope up with the certain issues,
the company is suggested to use the transformational leadership style in which the leader
influence their employees to accept the change and understands the needfulness of the change so
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that an organisation can right operate their functional in the well define manner with the effective
compliances with the rules and law which is being imposed by the government of UK. In order
to sustain in the competitive market, It is necessary for the organisation to accept the change by
creating and developing the flexible working ethics and working and also encouraging the staff
who contribute in achieving the set targets of the company.
Corporate social responsibilities in the business procedure
Corporate social responsibility refers to the practices and the polices which is being
undertaken by the organisations and intended to have the positive influence in the society. The
key idea for CSR activities is to pursue other to pro-social objectives by which all the
organisation can rightly contribute to the welfare of the society. It is the self regulating activities
in which the company is responsible for the offering benefits to the general public and making
themselves accountable to the stakeholders, public and the employees. In context to Ikea, the
production manager is using various natural resources in the form of input in an responsible
manner. Hence, they are remain committed for the minimum wastage in the supply chain
management. This embrace of the company towards the society and the way they represents the
different business activities. This shows the self regulating task in the society which results in
gaining the organisational goal in an appropriate manner.
The corporate social responsibility for Ikea is good as they are using factor of production
at the time of their manufacturing of products that does not affects the environment and
contribute to the minimum general waste, carbon footprints and eliminates excess water
consumption. The marketing manager of Ikea is connecting to the suppliers and their
stakeholders so that they can reduce the carbon footprints issues and maintain the standards in
the environment. In corporate social responsibility, there are various renewable energy,
sustainable resource that shows the good ethics for the organisation. Hence, they helped in
meeting the competitive advantage in the market place. Ikea follows the appropriate strategy an
fair treatment to their shareholders, suppliers, investors by which they can maintain the
transparency with them so that they can encourage them for attaining the organisational goal in
an appropriate manner. Corporate social responsibility give the exact changes in the market so
that they can rightly establish their brand in the market place.
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Writing a reflection on experience in preparation of the report
I am glad to be the part of this project “context in business” as it is the great experience
by working in it project. This report helps in developing the specific knowledge regarding the
environmental and leadership. It is the type of individual report in which I emphasis on
scheduling the certain task in an appropriate manner. This project is a individual report where I
focuses in scheduling the various activities so that all the work can be timely completed.
Involving the certain aspects, report gives the knowledge of internal and external analysis that is
being generated by conducting the PESTLE and SWOT analysis. In this project, I have leaned
about the different type of leadership styles which is being used by different companies
according to their size and the type of operations. My feeling about completing the project was
great experience which helps in improving the skills and abilities so I recommend the company
to have the transformational leadership style so that they can have the better results within the
organisation.
CONCLUSION
By the above information it is concluded that to understand that there are various factors
that affect organisation and for this the business in context is very essential. In this report there
are two essential approaches SWOT and PESTLE very helpful within the organisation to
recognising the intrinsic and extrinsic environment . Pestle analysis help the business in
providing information about the external factor that affect the organisation. On the other hand,the
business strategy are developed with the help of SWOT analysis for maintaining internal
re4wsources effectively. Leadership style is very essential for properly execution strategies
within the organisation. For this the leadership style is compared so that best alternative is
selected to attain benefits and sustainability in the competitive market.
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REFERENCES
Books and Journals
Behrangi, M.R., 2020. Cononical correlation analysis of the relationship between dimensions of
philosophical mentality and contingency leadership style of managers. Applied
Educational Leadership, 1(1), pp.1-14.
Cohall, D., 2020. SWOT Analysis of Medicinal Cannabis Industry: The Caribbean-Canada
Connection. Canada-Caribbean Institute Journal, 1(1).
Dong, Q. and Bárcena-Ruiz, J.C., 2021. Corporate social responsibility and disclosure of R&D
knowledge. Economics of Innovation and New Technology, 30(6), pp.585-602.
Jia, X., 2020. Corporate social responsibility activities and firm performance: The moderating
role of strategic emphasis and industry competition. Corporate Social Responsibility
and Environmental Management, 27(1), pp.65-73.
Kallenos, P., 2021. Develop a marketing plan for Nedeco Electronics Ltd-Cockpit a Smart Home
Solution.
Sari, R.P., Mariam, I. and Sinaga, M.O., 2021. Analisis Strategi Pengembangan Bisnis Melalui
Matriks SWOT pada Startup MakananHalal. id. Journal of Management and Business
Review, 18(3), pp.630-639.
Shahzad, K., Raja, U. and Hashmi, S.D., 2020. Impact of Big Five personality traits on authentic
leadership. Leadership & Organization Development Journal.
Susetyo, D. and Hadjri, M.I., 2020, May. Compensation, Leadership Style, and Employee
Performance: A Case Study at PT Semen Baturaja (Persero) Tbk. In 5th Sriwijaya
Economics, Accounting, and Business Conference (SEABC 2019) (pp. 385-387).
Atlantis Press.
Toro Quintero, E., 2020. Diseño del direccionamiento estratégico en entorno de crisis para la
empresa Sinapsys Wifi Telecomunicaciones SAS ubicada en el municipio de Génova,
Quindío (Doctoral dissertation, Ciencias Económicas y Administrativas-Maestría en
Administración).
Weidong, W.U., 2020. SWOT Analysis on the Practical Teaching of Tour Guide Business by
Using Campus Resources——Take Jianghan University as an Example. The Theory
and Practice of Innovation and Enntrepreneurship, 3(4), p.20.
Online:
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3 LEADERSHIP STYLES SIMILAR TO TRANSFORMATIONAL LEADERSHIP,2021.[Online].
Available Through: <https://www.theedadvocate.org/3-leadership-styles-similar-to-
transformational-leadership/>
PSTLE Analysis of IKEA,2018. [Online]. Available Through: <https://pestleanalysis.com/pestle-
analysis-of-ikea/ >
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