Strategic Management Case Study Analysis: IKEA and Change Management

This report presents a comprehensive strategic management analysis of IKEA, a multinational company. It begins with an introduction to strategic management, followed by a critical assessment of the processes organizations use to determine their strategies. The report then evaluates various critical models and tools, such as PESTEL and SWOT analysis, and applies these tools to IKEA's internal and external environments. Strategic options and directions for IKEA are explored, including product and service expansion and innovation. The report also examines strategy implementation, stakeholder influence, and the importance of a global/international strategy. Finally, the report critically appraises the importance of change management, considering the complexity of transformation processes, associated costs, risks, and sustainability. The analysis covers strategic planning, goal setting, environmental factors, and the implementation of strategies to enhance market share and achieve long-term objectives. The report emphasizes the importance of adapting to political, economic, social, and technological changes within the industry.

BSc (Hons) Business Management Top up
BMP6002
Strategic Management
Strategic management case-study
analysis
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Contents
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Introduction 1
A critical assessment of the process used by organisations to
determine their strategy 2
An evaluation of the critical models and tools used by
organisations to determine their strategy 3
An application of these tools to a real organisation 5
Critically appraise the importance of change management based on
the complexity of the transformation process, its costs, risks and
sustainability 5
Conclusion 7
References 7
Introduction
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Strategic Management refers to a process in which the assessment of the strategies to
be used within the organizations is made which can be helpful in the process of ensuring that
the organizations are able to attain a competitive edge over their various types of competitors
in the market (Afolayan and de la Harpe, 2020). Therefore, it is quite important for the firms
that they are able to identify the right way in which the application of their strategies is
required to be done. The organization which has been considered for this report is IKEA. It is
a Swedish founded Dutch multinational company which provides a lot of products and
services to the customers in the market. In this report, a detailed discussion will be made on
the steps which the organizations can take so that they are able to determine their strategy
appropriately. This will help in formulation of the short-term, medium-term and long-term
goals and objectives which are to be attained in the future.
A critical assessment of the process used by
organisations to determine their strategy
A particular process is required to be used so that the organizations are able to
determine their strategy (Aref Manesh, Ansari Samani and Zarei Al-Wandi, 2020). These
steps are quite important to be followed because the organizations are required to attain a
particular level of strategic and competitive advantage in the market. The process which is
used commonly by the organizations like IKEA is as follows-
 Goal-setting- The firms are required to set up goals so that they can be attained. Thus
IKEA is required to ensure that the right goals are set by it.
 Analysis- It is important for the organizations that they are able to carry out an
internal and external analysis which will be helpful in ensuring that the conclusions
and recommendations are formulated. Thus, IKEA has to carry out an internal and
external analysis.
 Strategy formulation- It is important that the strategy is formulated on the basis of
the analysis which has been done. Thus, IKEA needs to formulate the strategy in the
right manner.
 Strategy implementation- It is also crucial that the implementation of the strategy
can be done which will help a lot in ensuring that the strategy can be used in a proper
way. IKEA has to ensure this to raise its efficiency and effectiveness.
 Strategy monitoring- It is also crucial that the detailed monitoring of the strategy can
be done and changes can be made if necessary. This is required to be done by IKEA
to attain a strategic and competitive advantage.
Strategic planning-
It becomes quite important that the use of a Strategic plan can be made so that the
formulation of the strategies is done in such a manner which helps in the attainment of the
Strategic Edge in the market (Hamid, Muzamil and Shah, 2020). The Strategic Plan which
can be used by IKEA is as follows-
Basis Details
Vision The vision of IKEA is to make sure that a
better everyday life is created for the
people.
Mission The mission of IKEA is to offer a wide
range of different types of products to the
customers at attractive prices which will be
quite helpful in ensuring that they can be
satisfied.
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Core Values IKEA has set up different Core Values
which are quite helpful in ensuring that the
company can move in the right direction to
attain its particular goals and objectives.
SWOT analysis A SWOT analysis will be conducted by
IKEA to make sure that it is able to assess
its internal situation in a better manner and
thus identify the strategic approach which
is required to be adopted in the future.
Long-term goals The long-term goals of IKEA will be as
follows-
 To enhance the overall market share
in the market.
 To bring innovation in the market
so that it is able to sustain in the
market in the long-term.
Yearly objectives IKEA will also set yearly objectives so that
it is able to make sure that it is able to
assess the progress made at the end of each
year and revise its strategies accordingly so
that it is able to attain its future goals and
objectives in a better manner.
Action plan IKEA will be required to prepare an Action
plan for the purpose of ensuring that the
appropriate actions can be taken and
therefore the goals and objectives can be
attained in the future.
Strategic Mission and Purpose-
The Strategic Mission of IKEA in the long-term is to ensure that the enhancement in
the market share can be done by bringing the required level of innovation in the products and
services which can be helpful in attracting the customers in the market and therefore ensuring
that they are provided with the best products which therefore can be quite helpful in
attainment of the future goals and objectives. The Strategic Purpose of IKEA is to make sure
that the company is able to identify the way in which it can enhance its presence in the
market to make relevant progress in the long-term.
An evaluation of the critical models and tools used by
organisations to determine their strategy
Strategic analysis-
External environment-
For the analysis of external environment, it is quite essential that the organizations are able to
make the use of PESTEL analysis which can be quite helpful in ensuring that the assessment
of the macro and micro factors can be carried out in a right way (Knezović, Bušatlić and
Riđić, 2020). The PESTEL analysis can be used in the following manner-
Political factors- These are important factors which are to be considered because the
political situations can change anytime and therefore this affects the organizations. IKEA has
to consider the political situations by ensuring that it is able to mould itself according to the
influence created by such factors and can determine its strategy appropriately.
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Economic factors- These are also crucial factors to whom the consideration is
required to be given. IKEA has to ensure that it considers the influence created by the
economic forces so that it can make sure that it attains a desired level of profitability in a
proper manner.
Social factors- These are quite crucial factors to be considered in the firms. Thus
IKEA has to ensure that its products are according to the social norms which have been set up
in the society which will help to ensure that the products and services can be provided to the
customers in this way.
Technological factors- It is quite important to give consideration to these factors
because the technology changes quite quickly and relevant adjustments are required to be
made so as to sustain in the market. IKEA therefore has to make sure that it is able to use
advanced technology for its products and therefore attain the goals and objectives in the
future.
Environmental factors- It is quite important that the environment rules and
regulations which have been set by the Government is given consideration so that the
company can make sure that its products and services are according to the environmental
rules and regulations and make relevant progress for attaining its goals and objectives.
Internal environment-
For the analysis of the Internal environment it is quite crucial that the use of a model
like SWOT analysis can be made so that the overall assessment of the internal situation
which exists in the market is made effectively and efficiently (Krause and Miller, 2020).
Therefore, for an organization like IKEA the application of such a model can be made in the
following manner-
SWOT analysis
Strengths Weaknesses
 The company has a strong presence in
the market and therefore is able to
identify the way in which it can target
the customers to raise revenues and
profitability.
 The company has a strong network of
stores and therefore is able to expand
its presence across different locations.
 The organization is weak in the
application of the marketing strategies
and therefore is required to work a lot
here to gain a strategic edge in the
market.
 The firm is weak in innovation and
thus is required to make more use of
innovation in the products and
services.
Opportunities Threats
 The organization has the opportunity
to identify the way in which it can
expand its presence in the market and
thus attain more profits effectively
and efficiently.
 The firm is required to make sure that
it is able to identify the way in which
the use of innovation can be made so
that the company can bring new
products to target the customers
effectively and efficiently.
 The organization faces a threat of
rising level of competition in the
market which is creating a particular
level of impact on its level of
operations and profitability.
 The firm is facing a threat from the
increase in the tax rates by the
Government which can impact its
profitability level.
An application of these tools to a real organisation
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Strategic options and directions-
IKEA can consider the following strategic options and directions-
 To expand the range of products and services which are offered to the customers and
ensure that they are provided the products and services at lower prices so that the
revenues are enhanced and profits are increased.
 To make sure that the use of innovation can be made so that the new products and
services can be brought in order to target the different types of customers in the
market effectively and efficiently.
Strategy implementations-
For the implementation of the strategy it is essential for IKEA that it is able to make sure that
it uses the conclusions and recommendations derived from the Strategic analysis in such a
manner so that it is able to attain the future goals and objectives in a better way (Löfsten,
Klofsten and Cadorin, 2020).
Influence of stakeholders and culture-
The influence of stakeholders and culture has to be considered in IKEA because the
opinions given by the stakeholders is important and further the culture of the company has to
be considered for the implementation of the strategy in the future to attain the relevant goals
and objectives.
Global/International strategy-
For the attainment of the strategic advantage in the market it is nowadays quite
essential that the organizations are able to expand in different countries in the world where
they will be able to make sure that it can attain its goals and objectives in a right way quite
effectively and efficiently. IKEA has to identify the countries where it can target its
expansion and this will be helpful for it in ensuring the attainment of its future goals and
objectives.
Strategy evaluation-
For the purpose of carrying out Strategy evaluation it is important that the application
of the tools is done in the organization (Packard and Clark, 2020). The application of the
tools used for Strategic analysis can be done in IKEA in the following manner-
Strengths-
 The strength of strong presence in the market can be enhanced by ensuring that the
company is able to increase the number of products and services which it provides to
the customers.
 The strength of strong network of stores can be done through ensuring that the
organization is able to identify the way in which the expansion of the stores can be
carried out so that its network can be enhanced.
Weaknesses-
 The weakness of the marketing strategies can be dealt with by ensuring that the use of
appropriate marketing strategies can be made so that the company can attain its
marketing goals and objectives.
 The weakness of innovation can be reduced by ensuring that the use of innovative
approaches and methods can be made which will help the organization to attain its
goals and objectives in the future.
Opportunities-
 The opportunity of expanding its presence in the market can be maximized by
ensuring that the company is able to identify the new locations for the purpose of
expansion in the market.
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 The use of opportunity of innovation can be made as the company can make sure that
it uses innovative processes to make new products to target the potential customers.
Threats-
 The firm can reduce the threat of competition by making the use of aggressive
strategies which can be quite helpful in ensuring that a strategic edge is obtained on
the competitors in the market.
 The organization can reduce the threat of increase in the tax rates by ensuring that it is
able to increase its profits.
PESTEL analysis-
The application of PESTEL analysis can be made by ensuring that the organization is
able to ensure that the impact of all of these particular factors can be considered and
strategies are prepared separately for each factor which will help in ensuring that the
company is able to manage the impact created by its external environment quite
effectively and efficiently.
Critically appraise the importance of change management
based on the complexity of the transformation process, its
costs, risks and sustainability
Managing change-
Change Management is a process where the organizations are required to make sure
that they are able to identify the change which they have to implement which helps them in
ensuring that the strategic goals and objectives are attained (Platis and et.al., 2020).
Scenario- IKEA’s management is planning to bring a new performance assessment
system which will be used to measure the performance level of the employees of the
organization. Therefore, in this way it is quite important that the use of Lewin’s model is
made so that the change can be effectively implemented in the organization.
Lewin’s model-
It is a model which has different types of stages which can be used in order to ensure
that IKEA is able to implement the change in a right manner quite effectively and efficiently
which will help it a lot in the future (Rialti and et.al., 2020). The different stages of the model
are explained as follows-
 Unfreeze- This is a stage where the organization has to break the status quo and
therefore this becomes quite important (Schmid, 2020). In IKEA, it means that the
existing performance measurement system is abandoned and therefore the use of new
performance measurement system can be made to ensure that the organization can
enhance its performance in a proper manner.
 Change- This is the stage where the implementation of change is done (Šilenskytė,
2020). In IKEA, it can mean making the employees comfortable with the new
performance measurement system and ensuring that the implementation of the change
can be done in a right way.
 Refreeze- This is the stage where the organization returns to the position where it was
before the implementation of change (Skorev and et.al., 2020). In IKEA, it will mean
that once the new performance measurement system is implemented the company is
able to return back to the old way of working.
Importance of Change Management Process-
 Adjustment to the dynamic needs and requirements- The adjustments are required
to be made with the dynamic needs and requirements which can be quite helpful in
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ensuring that the company is able to attain its future goals and objectives. Thus this
makes change management quite important from the point of view of IKEA.
 Increase in the productivity of the employees- The change management process is
also helpful in ensuring that there is an increase in the productivity level of the
employees. This will help organizations like IKEA to be able to make sure that they
are able to ensure that the employees can become more productive in their work.
Conclusion
From the above report, it can be concluded that Strategic Management is a process of
ensuring that the identification of the appropriate strategies for making the growth in the
future can be done. For this purpose, it is essential from the point of view of the management
that it is able to ensure the implementation of these strategies which will help it to be able to
attain the relevant strategic and competitive edge in the market. Thus, in this way the
company can make sure that it is able to make relevant progress in the future so that it can
effectively and efficiently manage out the needs and requirements in quite a proper way.
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References
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