Strategic Management: Analysis, Options, and Implementation

Strategic Management
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Table of Contents
1. INTRODUCTION.......................................................................................................................3
MAIN BODY ..................................................................................................................................3
2. Environmental analysis................................................................................................................3
Macro trend environment analysis...............................................................................................3
Micro trend environment analysis...............................................................................................8
Identification of Opportunities and Threats...............................................................................12
Internal environment capability analysis...................................................................................12
Strategic Fit with operating environment..................................................................................18
3. Strategic Options........................................................................................................................19
4. Proposed strategy and implementation challenges....................................................................24
CONCLUSION .............................................................................................................................29
.......................................................................................................................................................29
REFERENCES..............................................................................................................................30
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1. INTRODUCTION
Strategic management is referred to as the process of ongoing planning, analysing,
monitoring and assessing the necessities of the company in order to meet its objectives and goals.
This management helps the organisation and its leaders to think and plan for the future existence,
thereby fulfilling the responsibility of the directors. It is like a direction for the company and its
workforce which helps in monitoring and testing the activities of the organisation which can
result in greater efficiency, profitability and market share. The organisation chosen for this report
is IKEA, multinational conglomerate which designs and sells the ready to assemble goods which
includes furniture, home accessories and kitchen appliances. This company is non diversified
organisation which deals in retail industry and has been selected for this assignment because it a
leading brand which is facing emerging challenges in entering any new market, maintaining
quality and low level of labour standards. It is facing challenges in terms of quality which have
resulted in many harsh consequences like allergic reactions, tragic injuries and malfunctions.
The vision statement of IKEA is to provide a better life to customers, co workers and the people
associated with it and its mission statement is to give better life to people but the issue of quality
have been a major challenge which is a threat to its mission and vision (IKEA, 2021). This report
shall cover the macro and micro environmental analysis, strategic options for company and
proposed strategies and implementation challenges.
MAIN BODY
2. Environmental analysis
Macro trend environment analysis
PESTLE analysis
It is a framework needed to analyse the key factors of external environment which
influence the working of the organisation. It is a tool which is used to identify the macro forces
which a company faces (Alexander and Joe, 2019). In context to IKEA, the PESTLE analysis is
illustrated below-
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Illustration 1: Pestel analysis, 2021
PESTEL FACTORS IMPACT LIKELIHOOD MITIGATION
POSSIBLE
Political  Covid 19 The company
operates in more
than 41 countries
and is obliged to
abide with the
regulations of
each country. The
pandemic have
affected political
stability of many
countries and
without economic
IKEA is serving
in multiple
countries and
pandemic have
affected dozen of
countries by
affecting the
international trade
but the Asian
market have
given opportunity
to IKEA to
The company can
enter the market
of India as the
'Make in India'
movement attracts
foreign countries
to conduct their
business in India
and this
opportunity will
help IKEA to
overcome its
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stability, the
organisation
cannot survive in
any location.
generate
maximum
revenue.
challenge of
entering new
market. IKEA can
expand in
multiple location
in India to capture
large market.
Economic  Brexit The Brexit have
impacted the
businesses in UK
as it has become
difficult to carry
on the activities
in UK due to
difficulty in
hiring the labour
from Britain.
The free flow of
goods within
European Union
is stopped due to
Brexit exit which
is affecting the
operations of
IKEA. Brexit is a
threat to the
company due to
difficulty in
international trade
in whole
European Union.
IKEA can
overcome this
threat by entering
other markets of
developing
countries like
India where there
is free flow of
trade so that it can
expand its
business and
enhance its sales.
Social  Values
and
culture
This factor also
affect the
operation of the
company as
different country
have different set
of values and
culture and IKEA
have to take care
The company
IKEA has a threat
of this factor as
the organisation
does not know its
customers.
Knowing the
local culture is
important and
IKEA can
mitigate this by
producing such
products which
fits the culture of
that particular
market and
customer segment
so that they can
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of all while
conducting its
business in a
particular nation.
IKEA is close to
it as its every
marketing
material is put
like that but they
do not receive
such response
from their efforts.
retain the
customers for
longer time
frame.
Technological  Digital
marketing
IKEA have been
in traditional and
digital marketing
where it reaches
the customers bot
through online
and offline mode
(Byun, 2017).
The company
puts many efforts
to know its
customer base so
that it can
enhance their
satisfaction level
in order to
increase their
brand value and
profits.
The digital
marketing
channel has been
an advantage to
the company as
its digital
catalogues or
website reflect
their efforts to
know their
customers. The
website lets the
customer know
their closest
outlet, sales,
discounts, offers
and many other
things which
helps in
enhancing the
customer
satisfaction.
The organisation
can use digital
platform and
technologies to
reach large
audience and
enhance their
goodwill so that
they can attract
potential
customers from
new and emerging
market.
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Environmental  Worldwid
e
Sustainabi
lity
As people are
getting aware of
the climate
change, it has
become the
responsibility for
every business to
produce such
products which
are sustainable
and IKEA is also
ensuring it.
IKEA has been
developing a
strategy which
emphasises on the
use of recyclable
and renewable
materials. But it is
an opportunity for
the company as it
is serving in more
than 40 countries
and it is challenge
to become
sustainable in all
the locations
altogether.
The company can
use this as an
opportunity to
attract customers
as sustainability
will help in
building the
goodwill of the
organisation. The
sustainable
strategy will also
contribute in
retention of
customer and will
help in stabilising
its business in any
new market.
Legal  Accused
of harm
and death
Businesses are
suspected of legal
threats and IKEA
is a global
company which
have to follow the
laws of different
nations in order to
prevent any legal
consequences.
IKEA have a
major threat of
legal
consequences as
its products like
furniture are
harming the
people due to its
poor quality
which results in
death and
injuries. These
devastation is
affecting
IKEA can
mitigate this
threat by ensuring
the quality of its
products and also
ensure that its
products are safe.
Improving quality
by using tools like
total quality
management may
help IKEA to
maintain and
monitor its quality
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communities and
families.
in products so that
its reputation is
not harmed.
Micro trend environment analysis
Porters five forces
It is the method which is used to analyse the competition of the company. It derives five
forces which determines the competitive intensity and attractiveness of the industry in terms of
profitability (Beattie, 2018). In context to IKEA, porters five forces are discussed below-
Illustration 2: Porters Five Forces, 2020 Competitive rivalry- It analyses the ruthlessness of the competition by identifying
existing market and players. In context to IKEA, the power of this force is high as IKEA
is a global brand and has many local manufacturers in market with strong roots like
amazon, walmart, tesco as its competitors who have strong and intensified presence in the
market. Threat of new entrant- It is the force of new entries into the market and size of it plays a
major role. It analysis the easiness to enter the market. In relation to IKEA, the power of
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