Challenges Faced by IKEA: A Management Approach

Individual Report on challenge

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
RECOMMENDATIONS.................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
The competing value framework is determined as an appropriate tool for analysing
organisational culture as well as organisational dynamics in order to perform different functions
in an appropriate manner. In this report, the company is taken which is named as IKEA. It is
determined as an international Conglomerate that focuses on a marketing different kind of
product and services such as furniture, kitchen appliances and many more for satisfying its user.
This company was given in year of 1943 by in Ingvar Kamprad. In this report, there is a
description regarding different challenges which is faced by organisation that imposes direct
effect on company. There is different kind of models such as SWOT analysis, Porter's five force
model& PESTEL analysis for conducting research related to challenges faced by organisation in
an appropriate manner. There is also a discussion regarding management approach from CVF. In
addition to this, there is also recommendation that can be adopted by organisation (Fernandes
and Crutchfield, 2018).
MAIN BODY
IKEA is determined as an international Conglomerate that focuses on a marketing different
kind of product and services such as furniture, kitchen appliances and many more for satisfying
its user. This company was given in year of 1943 by in Ingvar Kamprad.
 The vision of IKEA is to achieve leading position around world.
 The mission of IKEA is to provide unique quality goods and services to its user.
 The objective of IKEA is to increase sales by 20% in upcoming 3 months
2.1 SWOT Analysis
SWOT analysis is adopted by IKEA for analysing strengths, opportunities, threat as well
as weaknesses of organisation that is going to be mentioned below:
STRENGTHS WEAKNESSES
 Due to having superior brand around
the world attracts large number of
customer regarding product of
organisation.
 It is determined as a main strength in
order to provide product which is
 They operate their operation in
different countries, there is a corruption
case due to expand their business in
Russia is main weakness for
organisation.
 Environmental problem IKEA requires

determined as cost effective and
valuable for organisation.
putting in check regarding its
stakeholder there are different kind of
environmental issues that arises and
generating bad goodwill and brand
image of company in front of customer
in Marketplace.
OPPORTUNITIES THREATS
 The organisation focuses on opening its
retail outlets in India as well as China
so that it attracts large number of
customer which is determined as a main
opportunity for company.
 In addition to this, they also implement
advanced technology in order to
provide unique product to its user
during the period of time.
 Due to change frequent change in law
and regulation, the IKEA do not cope
up with changes that is determined as a
main threat for organisation.
 There are different competitors of
IKEA which erode profit in future
period of time (Trenholm Alcock and
Robinson, 2016).
Porter five force model
Porter five forces model is determined as a generic framework which is adopted by IKEA
that is given below:
Threat of new entrants the threat of new entrants is low because the new market is not
capable to take benefit from economies of scale to that extent in which IKEA operates.
Therefore, it is difficult or complex for the new entrants to conduct their business operation as
similar to IKEA. Hence, they provide superior quality products and services to its user and the
new entrants require more funds in order to operate their business at that level (Ioannidis, 2018).
Rivalry among existing firm there are different competitor such as Wal-Mart, ALDI as
well as many more. Therefore, it is important to provide unique quality product and services for
increasing their sales in future period of time otherwise it decreases sales of organisation.
Bargaining power of buyer customer has a wider choice to purchase product and
services from its customers during particular phase of time period. Therefore, it is necessary for