Analysis of IKEA's Global Business Environment: A PESTLE Approach

This report presents a PESTLE analysis of IKEA, a Swedish multinational corporation. It examines the political, economic, social, technological, legal, and environmental factors impacting IKEA's global operations. The analysis covers political factors like free trade and Brexit, economic factors such as international laws and currency impacts, and social factors including adherence to social values. It also addresses technological advancements, legal compliance, and environmental policies including IKEA's commitment to renewable energy and sustainable sourcing. The report concludes that companies must understand these factors to navigate the global business environment effectively. The report uses sources such as academic journals and online resources to support its findings.

Global business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Global business environment refers to an environment in various countries in context
with different factors which can affect various decisions that are used in context with resources
as well as capabilities. It involve many transactions that are done among all national borders in
order to fulfil objectives of individuals, organisation as well as companies(Zámborský, 2020).
The below report includes pestle analysis on the basis of Ikea. It is a Swedish multinational
corporation which design as well as sells furniture, kitchen appliances and home accessories. The
company was founded in 1943 by Ingvar Kamprad.
MAIN BODY
Pestle analysis on Ikea
There are six factors involved in pestle analysis and in context with Ikea it is been
explained as below:- Political factors:- Ikea is affected by two main political factors that are in relation with
free trade and occurrence of Brexit (Pestle analysis of Ikea, 2018). In context with free
trade, it allowed the brand to import all foreign products to sell in their stores also at
reduced prices which creates effective profit margin also. In relation with Brexit, it
impacted company in a major way especially in terms of trade regulations. Economic factors:- Ikea was affected in relation with International laws. Though many
people lost their jobs but they still want furniture and kitchen appliances which are
necessary items so company set their product prices in a conservative manner. Ikea was
also influenced by dollars. (Khoshnaw and Hameed, 2020). Social factors:- There are many laws that every business had to follow and no social
values should be avoided. So, Ikea followed this rule and removed unfortunate things
from all magazines. They also removed women from a Saudi Arabian catalogue. Technological factors:- The most important and famous technological factor is in terms
of their paper catalogues. People were also able to check latest news about Ikea through
online. As it useful for the customers of Ikea that they can place order online which can't
be done through paper catalogues so they enabled the online website. Legal factors:- It was been analysed that Ikea followed many laws and not only in one
country but all countries where they were been operating. They faced negativity because
of poor quality products that was impacting families and other societies. So, by following

employment laws and corporate social responsibility is useful for Ikea in order to achieve
competitive advantage in market and also make their products safe. (Rao, S., 2021).
 Environmental factors:- Ikea accepted an eco- friendliness policy in which they invest
more than $1 billion towards renewable energy in context with poor nations. The
primary objective of Ikea was to have in-store energy which will be fully renewable and
support solar power. So, they start investing in wind panels by which they shifted their
products like wood which need to be taken from all sustainable sources.
CONCLUSION
From the above report it is been concluded that there are many factors like political,
legal, technological and so on which can affect a company in both positive as well as negative
way. So, companies should have full knowledge regarding all recent aspects so that they can
tackle everything in a effective way.

REFERENCES
Books and Journals
Khoshnaw, D.A.M. and Hameed, A.A., 2020. Predicting The Role of Entrepreneur Strategies on
Improving Cognitive Positioning in Global Business.Academic Journal of Nawroz
University,9(4), pp.92-98.
Rao, S., 2021.International business environment. Himalaya Publishing House.
Zámborský, P., 2020. A blueprint for succeeding despite uncertain global markets.Journal of
Business Strategy.
ONLINE
Pestle analysis of Ikea, 2018. [Online] Available Through:
<https://pestleanalysis.com/pestle-analysis-of-ikea>