Report on Strategic Management in IKEA
18 Pages5584 Words186 Views
Added on 2019-12-04
Report on Strategic Management in IKEA
Added on 2019-12-04
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STRATEGIC MANAGEMENT
TABLE OF CONTENTSINTRODUCTION...............................................................................................................1TASK 1...............................................................................................................................1Evaluating the strategic capability of IKEA...............................................................1Evaluating the environment facing IKEA...................................................................3Identifying the major issues relating to ethics and social responsibility which IKEA isfacing.........................................................................................................................5TASK 2...............................................................................................................................6Proposing a range of alternative future strategies for IKEA......................................6Justifying the above strategies..................................................................................8TASK 3...............................................................................................................................9Intended and emergent approaches to strategy formation in IKEA..........................9CONCLUSION.................................................................................................................10REFERENCES................................................................................................................11APPENDIX ......................................................................................................................13Appendix 1: Value chain analysis...........................................................................13Appendix 2 Porter five forces model ......................................................................13Appendix 3 Major ethical and social issues ...........................................................14Appendix 4 Porter generic matrix ...........................................................................15Appendix 5: Justifying the strategies .....................................................................15
INTRODUCTIONIn the present era of hyper competition and information technology, it becomes amandatory aspect for every business organization to systematically and effectively maintain itsentire business activities. For this, companies nowadays are laying their significant concern overanalysing its external as well as internal environment in order to establish appropriate strategiesin the light of achieving leading heights of organization's success (Kim, 2004). Companies arefocusing on the concept of strategic management in a significant way. Strategic managementrefers to the formulation and execution of vital goals taken by the top management of companybased on their critical assessment of external as well as internal environment in which the firmoperates its business. With this context, present report highlights the crucial aspects of strategicmanagement in IKEA that is a well established and leading furniture based company in Sweden.The study throws light on evaluating the current strategies of IKEA and proposing alternativestrategies for the firm to maintain winning edge in the international market. TASK 1Evaluating the strategic capability of IKEAIn order to evaluate the strategic capability of IKEA, it is important to focus attention overits mission, vision, objectives and major goals.Apart from this, the strategic capability of IKEA can be analyzed by applying the conceptof value chain analysis in an effective way. The value chain analysis of company's strategiccapability is explained as follows- 1
Illustration 1: Porter's value chain analysis(Source: Rosen, 2006)Using the value chain analysis, IKEA categorizes its set of business activities in twosegments which are as follows-PRIMARY ACTIVITIESActivityImplementation by IKEAInbound LogisticsDistributes the product from around 42 distribution centres tothe retail stores.Around 1000 suppliers manufacture 10,000 items of productline. Outbound LogisticsAppropriate method for target consumers to transport theirfurniture items by themselves. OperationsOperates its business in more than 50 countries and has 208operated stores in 25 countries. Marketing and SalesTarget market consists of middle and upper middle class withlow level of income.2
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