Strategic Management in IKEA PDF

Running head: STRATEGIC MANAGEMENT
IKEA
Strategic Management

STRATEGIC MANAGEMENT 1
Table of Contents
Introduction................................................................................................................................3
Overview of IKEA.................................................................................................................3
Mission and Vision of IKEA..................................................................................................4
Task 1.........................................................................................................................................4
Porter Five Force framework.................................................................................................4
The threat of Substitute Products.......................................................................................4
Rivalry among existing players..........................................................................................4
The threat of New Entrants................................................................................................5
Supplier’s bargaining power..............................................................................................5
Buyer’s bargaining power..................................................................................................5
PESTLE Analysis...................................................................................................................5
Political Factor...................................................................................................................5
Economic Factor................................................................................................................6
Social Factors.....................................................................................................................6
Technological Factors........................................................................................................6
Legal Factors......................................................................................................................7
Environmental Factors.......................................................................................................7
Opportunities for IKEA..........................................................................................................7
Threats for IKEA....................................................................................................................7
Strategic Capabilities of IKEA...............................................................................................8
Strengths of IKEA..............................................................................................................8
Weaknesses of IKEA.........................................................................................................9
Task 2.........................................................................................................................................9
Current Strategies of IKEA....................................................................................................9
Low-cost Leadership..........................................................................................................9
Product Strategy...............................................................................................................10
Promotion Strategy...........................................................................................................10
Market Development Strategy.........................................................................................10
Competitive Advantage....................................................................................................10
Strategic Options for IKEA..................................................................................................11
Ansoff’s Matrix................................................................................................................11

STRATEGIC MANAGEMENT 2
Task 3.......................................................................................................................................13
Major Issues face by IKEA..................................................................................................13
Problem 1.........................................................................................................................13
Problem 2.........................................................................................................................14
Problem 3.........................................................................................................................14
Features of Ethics and Social Responsibilities of IKEA......................................................15
Core Values of IKEA.......................................................................................................15
Conclusion................................................................................................................................15
References................................................................................................................................16

STRATEGIC MANAGEMENT 3
Introduction
To define the objectives and mission of a business organization it is very essential to realize
what are its existing situations and the kind of obstacles the company has to face in its
existing environment. With the help of successful organizing strategies, a business can realize
its objectives and mission. Therefore, the company should have knowledge of strategic
management and strategic planning. Strategic planning requires effective strategic thinking as
it is an essential tool of management, which supports executives to identify the priorities and
define key actions required to attain the objectives and mission of the company. Today,
strategic management has been one of the fundamental subjects in the organization’s
management of the vibrant environment (Athapaththu, 2016). This paper entails the concept
of strategic capabilities about the IKEA Company. It will analyze the macro-environmental
factors that affect the operations of the company. Besides this, appropriate framework and
strategic options will be highlighted that can be adopted by IKEAS in the coming future. In
the end, the paper will evaluate some issues related to ethics and corporate social
responsibilities that IKEA has faced in the past five years.
Overview of IKEA
IKEA is a multinational group of furniture industry with headquarter in the Netherlands. It
designs and sells ready-to-assemble furniture, kitchen appliances, and home accessories,
along with various other services. IKEA is the world’s leading retailer of furniture in the
world since 2008. A 17-year-old carpenter in 1943, Ingvar Kamprad, who is listed as the
world’s tenth richest person in 2015 by Forbes, with the worth of around $40 billion,
established the company in Sweden (IKEA, 2018). The business is established in the market
due to its modernist designs for numerous types of furniture, appliances, and its interior
design work is frequently related to eco-friendly simplicity. In addition, the firm is famous in