Strategic Management of IKEA in Post-Pandemic Times: A Case Study

This case study discusses the impact of COVID-19 on IKEA's operations and the strategic management decisions taken by the company to deal with external challenges. It covers the PESTLE analysis of IKEA, the shift towards online buying, supply chain management issues, and the company's sustainable and digital operations. The study also suggests strategic management steps that IKEA can take to maintain and strengthen its market share.

Management and
Organisation BUSS 2068

Table of Contents
Question 1........................................................................................................................................3
Question 2........................................................................................................................................4
Question 3........................................................................................................................................5
References........................................................................................................................................6

Question 1
IKEA is a well-known Swedish home furnishings firm founded by Ingvar Kamprad in
1943. The company employs about 172,000 people and has 375 outlets in 28 countries. The
corporation sold more than 34 billion dollars in 2015, and its internet sales climbed by 21%. The
company's mission statement is to provide a better living for the majority of people. The
company's CEO sought to offer home furnishing products at affordable rates in order to attract a
wide number of clients without sacrificing quality by implementing simple cost-cutting
measures. The provided company while working in its domestic region i.e., the Netherlands have
to take care of multiple external factors that impact the business operational environment
(Direction, 2021). The company had to face a huge impact on its productive operational working
under which several decision making was passed and alterations were made with respect to post-
pandemic workings. PESTLE analysis is one of the most important tools used by businesses to
analyse competitiveness within a given sector is PESTLE analysis. In the instance of IKEA,
respective analysis is being applied are as follows;
 Political: Ikea presently operates in more than 40 countries throughout the world, with
each country's political stability, decisions, and policies having a direct influence on Ikea.
Ikea will be able to establish and expand their operations more easily if the government is
more business-friendly.
 Economic: The country's interest rate, inflation rate, GDP, per capita income, and other
factors have a direct influence on Ikea's operations. The shifting cost of raw materials can
have a direct influence on the firm's profitability; any change in the economy will have a
direct impact on the company.
 Social: It encompasses customer culture, behaviour, and attitude, all of which have a
direct influence on the company's profitability. Changing societal conditions have had a
direct influence on Ikea in several aspects, as well as its brand image. To minimise
cultural ramifications, the corporation adheres to cultural conventions when selling its
products in different nations.
 Technological: Changes in technology, or any form of technological advancement, have
a direct impact on corporate operations. Ikea, for example, spends a lot of money on
research in order to keep its technology up to date and meet the demands of their clients.

 Environmental: Working for the environment's welfare and long-term viability gives the
firm a competitive edge. In the case of Ikea, the corporation is making a significant
contribution to environmental sustainability. The corporation recently unveiled its 2030
sustainability strategy plan, which states that only renewable and recycled materials
would be used.
 Legal: It contains the legal rules and regulations that must be obeyed by every company
entity. Ikea guarantees that all relevant legal regulations and legislation are followed,
allowing them to carry out their business successfully.
Through the analysis of the case study, it can be said that the company faces high severity
of external forces that are present in the business environment. The provided company faced
several issues due to the outbreak of COVID-19 for which buyer power seems to be upraising.
For the operational working of the company, managers of the firm had to shift the operations of
the company digitally and make various amendments to daily workplace operations. The
company with such changes faced issues including higher investment of costs and relative
resources for the process (Alaouir and Orahem Gorge, 2021).
Question 2
The epidemic of Covid-19 has rushed the move to online buying, which has had a huge
impact on IKEA's large retail network. However, various issues with regards to supply chain
management was being reported in the case study. This included having to lease ships and
reroute deliveries since Covid-19, and these issues have resulted in passing on price rises to
customers. Staff needing to go into quarantine has also presented serious service delivery
challenges. There is no predicted end date to these issues. As a result, Barbara Martin Coppola,
IKEA’s chief digital officer, stated that they have seen a fantastic uptake of e-commerce
internationally overall for IKEA, especially as the shops were closed in several places. Now that
the stores are reopening, the amount of e-commerce has remained stable, implying that there is a
permanent shift towards online and its convenience. When the Coronavirus epidemic comes to
an end, there's a good chance that shopping will look and feel different. However, in the
meanwhile, a few businesses have done something far more important than simply weathering
the storm. They've become so well-known as a group that they're most likely redoing their web
presence and employing new and innovative tactics to serve their clients (Formentini, 2021).

As a result of this in 2021 there was a new profit of $7.89m compared to the loss of
$8.66m in 2020. There were credible techniques proposed better techniques through which shifts
in investment were being made with respect to household consumer investing in IKEA. The
respective company has undergone several changes in its working environment for which higher
investment of costs was being undertaken in the provided company. The managers of the
specified business had undergone several changes that had provided enough rations to perform a
better course of action in the post-pandemic times of the regional areas (Kohtamäki and et. al.,
2021). Following are the operational decisions that can be regulated with respect to counter
challenges and relative issues caused due to outbreak of COVID-19 in the region;
 Sustainable business operations: The provided firm had adopted to sustainable means of
business operations under which better terms of working of the firm can be produced.
Throughout the term better initiative with respect to devising appropriate plans and
strategies was being developed for rational use of business resources.
 Strategic focus: The managers of the firm with respect to counterchallenges of the
COVID-19 pandemic have adopted a strategic focus. As per reflecting to the case study,
it can be said that better terms of the working of the firm were being developed through
the use of strategic project management techniques. This delivers effective basis of
workings under which proper production process will be taken into consideration and
effective operations of the firm would be enabled under which productivity of the firm
can be ensured in competitive business market (Halal, Garretson and Davies, 2021).
 Digital operations: Through the terms of working in COVID-19 times and after that also
strategic decision in the respective firm had passed that determines effective working of
the firm through use of digital platforms. The respective company have enabled
operations such as of sales activities that will be governed by the use of digital media
platforms (Wu and Sekiguchi, 2021).
Question 3
The respective company that engages better course of actions when deriving productive
business operations through use of strategic business management process. The managers of the
firm keep in mind the impact of COVID-19 on the operational working of the firm. The
company being dealing in retail industry faces intense issues and challenges of competition in the
business market, thus by using appropriate strategic management tools effective course of

actions can be produced. There are various external challenges that took place due to COVID 19
which can be reduced by following a strategic plan which is explained below-
 Identifying the mission, objectives and strategies of the company- Under this, the
company should adopt more strategies to deal with the responses of competitors to
compete with them (Qureshi, Shaikh and Seaman, 2021).
 Analyzing the external environment- Ikea spends good amount of investment and time
to predict and forecast their sales. They should also do market research and analysis of
the external environment to get the information for setting the goals.
 Analyzing the internal environment- Under this, the company measure its performance
and the level of progress so that the company will be able to maintain and strengthen its
market share.
 Formulating strategies- This is the crucial step in the strategic management process and
the managers of the company make the plan as the actions of the employees by
implementing the approaches with the aim of achieving the objectives of the vision and
mission (Sun, Wang, Yan and Han, 2022).
 Implementing strategies- By following all the above mentioned steps the managers of
the respective company accomplish all the tasks. The plan will be outlined properly for
the execution of strategy and the along with it, the company has to sell its products the
way adopted by market. Such as the company has also started to provide the pick up
orders and home delivery due to its digital approach.
 Evaluating results- The company should bring more focus towards the new digital
experiences and changing as per the needs and requirements of the customers. Proper
plan will help the company to execute the strategic plan and due to which the leadership
team will also analysis and monitor the performance of the strategic plan. n / market le.
Ikea is required to be alert in advance for the challenges that can occur in future so that
the unnecessary cost can be avoided. The product has the best quality that is why, competitors
cannot compete with it and it is essential for the company to face any situation and consequences
(Verbeke, Hutzschenreuter and Pyasi, 2021).

References
Alaouir, T. and Orahem Gorge, E., 2021. Investigating Inventory Management Strategies Within
Food Cold-Chain During Crises: Case Study on IKEA Food.
Direction, S., 2021. IKEA's attempts to smoothly achieve corporate sustainability consistency:
The deep challenges of aligning employees and customers across the globe.
Efimova, V.V., 2022. Digital Strategies for Improving Global Supply Chain Resilience and
Agility. In Proceedings of the International Scientific Conference “Smart Nations:
Global Trends In The Digital Economy” (pp. 138-146). Springer, Cham.
Formentini, M., 2021. Sustainable Supply Chain Management. In Corporate Sustainability in
Practice (pp. 207-223). Springer, Cham.
Halal, W.E., Garretson, J. and Davies, O., 2021. Updating strategy for a high-tech world:
constant change from the bottom up and the outside in. foresight.
Kohtamäki, M., Baines, T., Rabetino, R., Bigdeli, A.Z., Kowalkowski, C., Oliva, R. and Parida,
V. eds., 2021. The Palgrave Handbook of Servitization. Palgrave Macmillan.
Qureshi, J.A., Shaikh, A.M. and Seaman, C., 2021. Leadership mindset and the fall of once giant
family‐run textile exporting businesses. Global Business and Organizational
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Sun, Y., Wang, Z., Yan, S. and Han, X., 2022. Digital showroom strategies for dual-channel
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Verbeke, A., Hutzschenreuter, T. and Pyasi, N., 2021. The dark side of B2B relationships in
GVCs–Micro-foundational influences and strategic governance tools. Journal of
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Wu, J. and Sekiguchi, T., 2021. Integrating Activity-System Maps and NK Model to Understand
Organizations Under Dynamic Environments. In Academy of Management
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