Corporate Strategy & Governance- Assignment

Corporate Strategy and
Governance

Table of Contents
TOPIC:.............................................................................................................................................3
INTRODUCTION...........................................................................................................................3
REVIEW OF THE PROBLEM FACED....................................................................................4
BACKGROUND OF RESEARCH AND COMPANY..............................................................4
SIGNIFICANCE OF THE RESEARCH....................................................................................5
RESEARCH AIM.......................................................................................................................5
RESEARCH OBJECTIVES.......................................................................................................5
RESEARCH QUESTIONS.........................................................................................................5
LITERATURE REVIEW................................................................................................................5
Customer retention and areas for improvement by which this issue can be mitigated...............5
Customer service and its benefits to gain competitive advantages.............................................7
Role of customer service in attainment of competitive advantages for IKEA............................8
RESEARCH METHODOLOGY ....................................................................................................9
Types of Research.......................................................................................................................9
Research approach....................................................................................................................10
Research Design........................................................................................................................10
Data Collection..........................................................................................................................11
Gantt Chart................................................................................................................................11
DATA ANALYSIS........................................................................................................................14
THEMATIC ANALYSIS.........................................................................................................15
RECOMMENDATIONS AND ACTION PLAN .........................................................................22
CONCLUSION .............................................................................................................................24
REFERENCES..............................................................................................................................25

TOPIC:
“To analyse the importance of evaluating the issue of customer retention in dynamic
market”. A case on IKEA.
INTRODUCTION
Corporate strategy is basically being considered as hierarchically developed strategic
plan, which mainly aid a business organisation in meeting all the corporate goals along with the
objectives. Strategic management is said to be one of a crucial business strategy that is required
by every single business organisation so that satisfaction level to both customers and employees
can easily be given in specified time frame. It has been analysed that, a developed corporate
strategy does not always offers customers with benefits and to employers as well. On the other
hand, if it is talked about corporate governance, then it is being considered as a range of rules,
laws and processes that are basically required or need proper control (Agius, 2017). In other
other words, the term i.e. corporate governance, the internal and external factors that affect the
interests of a company's stakeholders, including customers, shareholders, government regulators,
suppliers, management and so on. Away with this, it is also said that it is pretty much required
for every single business organisation like IKEA.
Away with this, there are ample number of stakeholders, suppliers, customers,
management of the company and on government regulators as well that mainly impacts upon
business organisations. Customer retention is a crucial factor, which is required by a business
company to look into today's dynamic business environment. It has been analysed that, IKEA is
one of the crucial business organisation, which is performing as a crucial furniture retailer
dealing at international level but due to ample number of reasons, company has failed in
developing strategy in regards to customer retention (IKEA is changing its strategy, and it
reflects a shift in what customers really want, 2019). This impacted negatively upon productivity
and profitability at the same time of this business organisation. The main reason, which has been
identified over here was the dynamic business environment. This made IKEA to make alterations
among it's business strategy as it became hard for them to deal with all the issues that IKEA was
facing in regards to customer's needs and requirements as well.

REVIEW OF THE PROBLEM FACED
The problem, which has been taken into consideration is of IKEA. This organisation was
dealing with an issue i.e. failure of corporate strategy, which was developed by them in regards
to customer retention (Customer engagement persuasion process, 2018). Major factor, which has
been identified was the dynamic business environment, that affected the overall operations of
IKEA. It has been identified that, due to dynamic business environment customer's perceptions
regarding a particular product got changed gets changes. This basically, put IKEA in a situation
where it would require to make alterations among it's existing corporate strategy so that customer
retention process of company can directly gets improvised. With the help of this, IKEA might
become number one furniture retailer within Britain and at international level as well, through
offering customers with a range of unique products and services (Armstrong and et. al., 2018).
BACKGROUND OF RESEARCH AND COMPANY
Performing investigation on a particular topic, would help researcher in pulling out
favourable outcomes. Basically, investigator has taken customer retention as one of the issue,
which affects overall productivity and profitability of a business organisation. Developing a
proper or effective corporate strategy or making modifications within the existing scheme can be
beneficial for a company like IKEA. The vital reason that came in front was companies do not
meet requirements of customers due to rapid change among business environment. This basically
leads an organisation to an issue i.e. shift within the requirements/needs of clients. Since,
furniture industry is carrying high numbers of changes in present time because of many factors
like technological change, current trends and so on (Arrigo, 2018).
IKEA was found in the year of 1943 and founder was Ingvar Kamprad, who made this
company has multinational group, which mainly designs and sells ready-to-assemble furniture,
kitchen appliances and home accessories, among other useful goods and occasionally home
services. In past few years, customer retention has been a problem for the company, and the
reason that came in front was, corporate strategy of this business organisation, which was
developed was not that effective in nature. This impacted negatively upon company's values,
goodwill and on other areas as well like decline among competitive advantages and so on. Due to
uncertain business environment, IKEA analysed that it will be required for them to modify the
different range of corporate strategies.

SIGNIFICANCE OF THE RESEARCH
The vital reason behind conducting the investigation on chosen topic i.e. to analyse the
importance of evaluating the issue of customer retention in dynamic market”, as this will lead
readers to gain knowledge in regards to how a business organisation could effectively make a
range of powerful actions, which will help them in developing much more stronger strategies in
near future. Through this, it can be said that competitive advantages IKEA will gain and might
reach to an all new level where IKEA might reach to number one position in furniture and other
sorts of industry as well (Badwan and et. al., 2017). Along with this, it will also lead IKEA to
change the overall perceptions that they were having in the past and to run business in successful
manner within today's dynamic business environment.
RESEARCH AIM
Aim of present investigation is “To analyse the importance of evaluating the issue of
customer retention in dynamic market”. A case on IKEA.”
RESEARCH OBJECTIVES
 To analyse the issue of customer retention and areas for improvement by which this issue
can be mitigated.
 To understand the concept of customer service and its benefits to gain competitive
advantages.
 To analyse role of customer service in attainment of competitive advantages for IKEA.
RESEARCH QUESTIONS
 What are the issue of customer retention and areas for improvement by which this issue
can be mitigated ?
 What is the concept of customer service and its benefits to gain competitive advantages ?
 What could be considered as the role of customer service in attainment of competitive
advantages for IKEA ?
LITERATURE REVIEW
Customer retention and areas for improvement by which this issue can be mitigated
According to Wedel and Kannan, 2016, customer retention is very important for every
company to build long term relationships with their customers. It is very important for every
company as it helps them in indirectly reducing their costs . It is more expensive to generate a

new customer then to retain an existing one. All programs to retain customers basically aim to
keep as many as customers possible and they always focus on repeated purchases by the same
customer. Loyalty of customers depend upon many factors such as maintaining of the quality of
products, after sales service, the way customers are being treated, Price in comparison to
competitors.
These factors have a impact on customers decision whether there will be loyalty or not
on his part or not. IKEA as a furniture brand has always been appreciated by its customers about
the innovative and best quality services being provided by it in comparison with its competitors.
In 1934, when IKEA started it not only sold furniture to people but soon it was started to be
recognized as a lifestyle brand. People started feeling it to be a great destination for those who
wanted something unique, comfortable and of good quality to be a part of their homes (Bahri-
Ammari and Bilgihan, 2017). Plus it was also a leader in terms of prices at which it was offering
its products in comparison to its other competitors.
Soon after its opening it began to be preferable brand for people in both dimensions of
quality and price. As time passed on people started feeling a little bit of dissatisfaction with
IKEA and this lead to decrease in its sales. This also affected their overall profitability and brand
image, This was the main reason behind IKEA not able to become a global leader in the furniture
industry. Operations department of IKEA is of main concern where improvements has to be
made to correct the loopholes. Technological advancements all the companies have realised the
importance of customers and they are also making continuous improvements in them. This has
lead many competitors emerging for IKEA. This has been one of the reasons why customers
have started comparing IKEA with other brands and feeling dissonance. IKEA mainly consists of
providing the best quality of fabric and woods (Bhat and Darzi, 2016).
This department has to be the major concern for IKEA for all the types of improvements
that needs to be made in the company. The market is totally dynamic and so is behaviour of
customers. It is of utmost importance for them to change with the changing needs and demands
of its customers. Nowadays, People are preferring customized products earlier IKEA had earlier
focussed majorly on its price and quality. Now with the changing scenario, they have to focus on
the customized products being demanded by the present and prospective customers. IKEA has to
be concern for the market share which is decreasing on its part. Efforts must be taken by the