Strategic Analysis of IKEA: A Comprehensive Case Study

This case study report provides a comprehensive analysis of IKEA, examining its vision, mission, values, and strategic plans. The report delves into IKEA's vision to create a better everyday life and its mission to improve the lives of its stakeholders. It explores the company's values such as cost consciousness and responsibility. The study also covers PEST developments, highlighting political, economic, social, and technological factors influencing IKEA's operations. Furthermore, it examines IKEA's environmental stance, business practices, and cooperative ventures, including its sustainable supply chain. The report also details IKEA's competitive advantages, strategic plan for a new product, and its tactics and strategies for the next five years. The analysis includes recommendations for refining IKEA's vision statement and emphasizes the importance of aligning its operations with its core values and environmental sustainability goals.

CASE STUDY REPORT 1
Case study report
Student’s Name
Code + Course Name
Professor
Institution
City, State
Date

CASE STUDY REPORT 2
Case study report
Introduction
The case study report presents an analysis of different aspects of IKEA. The organization
is a multinational group whose major responsibilities include designing and selling furniture and
other essential household items. The group offers ready-to-assemble furniture, home accessories,
kitchen appliances and many other products. The case study has fundamental questions regarding
how the organization implemented its strategic plans. This is a multinational company and its
success can be attributed to effective implementation of strategic plans. Its vision and mission
are also cornerstone of IKEA success.
Vision and mission of IKEA
The case studies indicate that the vision and mission of IKEA have been essential in the
growth and expansion of IKEA. The vision and mission statements of IKEA are well-defined
and very simple in terms of wording. One would expect the company to have long vision and
mission statements. However, for IKEA that is not the case since it only chose simple, but
impactful statements. Essentially, the strategy of IKEA in the market has been efficient since its
vision and mission are centered on growth.
The vision of the organization has been “to create a better everyday life for the many
people” (Kreutzer, 2019, p.33). On its mission, the focus is to communicate goals the company
for its all its stakeholders such as employees, customers and others. These are powerful and
inspirational vision and mission, which have transformed IKEA in all aspects. The Swedish-
based company has been able to grow and it is still expanding because of its vision. According

CASE STUDY REPORT 3
to Bowen (2018, p.2) the mission and vision of an organization are rooted in its ethical values
and more fundamentally they define the direction of a company. By defining or giving an
organization a direction, it can improve its performance or generally success in the market.
The vision of IKEA has been instrumental in inspiring customers and other stakeholders
such as employees in order to guide to achieve objectives. By involving people such as
employees and customers, the company should strive to improve their lives. For a business to
succeed it must always better the lives of its stakeholders. A business that does not change lives
or satisfy its key stakeholders does not stand any chance to succeed. However, in the case of
IKEA, its vision underpins its strive to meet its objectives such as expansion or growth. For this
multinational group, to grow into across the globe, it should meet in a position to meet the needs
of stakeholders more than the competitors.
The case study on the vision and mission of IKEA agree with MacLeod, (2016, p.18) that
a vision should drive the long-term goals and define what an organization should do to achieve.
The vision must also underscore the position the organization wants to be in the competitive
landscape. Following these pronouncements from both IKEA’s case study and author MacLeod,
(2016), the vision of this company has been the one that has guided to achieve the success it has
today. In 2008, IKEA was declared the largest retailer in home furnishings. This confirms the
fundamental role; its vision has played in turning around its performance to help secure a
competitive advantage.
The vision of IKEA has been able to achieve results because of its strong mission.
Through its mission, the company has been able to outline the direction the company should
follow. The mission of IKEA is concrete and it shows its commitment to improve the everyday

CASE STUDY REPORT 4
lives of its stakeholders. Essentially, the mission of IKEA is focused on investing in the future
for the benefit of suppliers, customers, and employees in order to gain a sustainable long-term
growth.
Based on the description of both the vision and mission of IKEA, a person cannot have
any doubt to believe that they are still current. IKEA’s vision and mission still remain current
and that is why today the company is still competitive and seeking more areas to invest in.
However, in my recommendation IKEA needs to improve its vision by incorporating more
powerful words. The vision statement of IKEA is “to create a better everyday life for the many
people” (Kreutzer, 2019, p.33). The word better should be replaced with the word “improved”
and more words should be added such as “in the world.” This will mean that, its vision statement
will read, “to create an improved everyday life for many people in the world.” This
recommended vision statement is more refined in the sense that it portrays its growth strategy
across many markets in the world.
IKEA’s values
It is important for a company to have a vision and mission to guide its operations. In a
similar vein, it must have values, which are key determinants on how the company will pursue its
vision and mission. Values are beliefs and guiding principles” that sway business activities and
operations of an organization. This insinuates that the vision and mission of IKEA are
meaningless, if the organization lacks values. However, IKEA has strong values such as cost
consciousness, together, responsibility, and leadership by example. These values act as guiding
principles on how the company implements its vision and mission. Thus, IKEA’s values support

CASE STUDY REPORT 5
its vision and mission by guiding its activities and perpetuating the belief that every person
especially stakeholders have value to offer to the company.
PEST developments
Political development- Globally, businesses thrive in favorable political climate. IKEA’s
growth strategy is hinged on global peace. The political developments define how the
government involvement in the economy by creating making policies, creating a peaceful
political environment can affect business operations. Ideally, it is favorable political clear,
liberalized market and stable markets overseas that that strengthened strive of IKEA to grow in
markets such as the UK.
Economic development- the economic developments in both domestic and foreign
markets affect the operations of IKEA. The countries such as the U.S. UK, Sweden among others
have strong economies which regulate inflation, have consumers with sufficient disposable
income, and favorable interest rates and exchange rates. The inflation of the United States and
UK is below five percent, and it has not affected the value of their currencies. Also, Sweden
people have disposable income to spend of the items of IKEA. In essence, the countries, IKEA
operates are strong economies where a majority of people have disposable incomes to buy the
company’s products.
Social development- The markets that IKEA targets are have people that share beliefs
and attitudes. In addition, the population growth, health consciousness, and lifestyles are
favorable to IKEA. In Sweden, UK and other markets where IKEA operates people have positive

CASE STUDY REPORT 6
attitudes and want to lead comfortable lifestyles. Thus, IKEA is assured of demand for the
luxuries it offers to a wide range of customers.
Technological developments- the technological landscape changes very fast and that
impacts the attitudes, preferences and tastes of consumers. Since the world is in a rapid
technologically changing environment, IKEA needs to change how it communicates with target
markets, distributes goods and services and should also improve how its produces goods. In
essence, the technological developments globally influence how the company will change its
strategies to meet new customer expectations or tastes and preferences.
Environmental stance and business practice
I firmly agree to the claim by IKEA that a strong environmental stance is a good business
practice because it has defined its business strategy on the cornerstone of being socially
responsible and sustainable environment. That is why in 2015, the company launched a new
sustainability plan that will ensure that throughout the year, the company operates in a manner
that aligns with the concept of social responsibility (Li, et al. 2016, p.74). To reach its objective
of ensuring a sustainable environment, IKEA uses its SWOT analysis to help identify its
strengths, eliminate its weakness, as well as explore its opportunities and prevent the threats from
happening.
The major strengths of IKEA are its vision to create a better everyday life for all the
people and its ability to minimize waste production during production (Business Case Studies)
Both these strengths are in line with the IKEA’s goal of ensuring a sustainable environment.
There are a lot of opportunities that IKEA can explore to ensure a sustainable environment. For

CASE STUDY REPORT 7
example, with the growing demand for greener products, it’s the best opportunity for IKEA to
produce more products that are based on the sustainability of the environment. Regarding the
weaknesses, the major ones include the larger size of its global business that is proving difficult
to control and the need for low-cost products which is difficult to balance with quality. These
weaknesses do not in any way hinder the IKEA’s objective of ensuring a sustainable
environment. The main threat the IKEA is facing is competition from many companies that are
entering the low price of household and furniture. This threat does not directly affect the IKEA’s
desire to ensure a sustainable environment.
IKEA and Cooperative venture
The corporative venture that IKEA has developed to build a sustainable supply chain is
communication with material and manufacturers suppliers. The main benefit of this venture is
that it will ensure that IKEA’S supply chain is sustainable. However, IKEA will incur some costs
if it will not communicate with the suppliers effectively because the wrong message delivered to
the suppliers means that the wrong goods are supplied to the company.
IKEA’s competitive advantage
IKEA’S existing competitor is Walmart. Its potential competitor is private label brands.
Walmart is a global company based in the U.S that operates grocery stores and chain
hypermarkets. IKEA, on the other hand, is a multinational group whose major responsibilities
include designing and selling furniture and other essential household items. The competitive
advantage of IKEA lies in its ability to produce goods in a cost-effective manner.
5-year strategic plan for a new product

CASE STUDY REPORT 8
When introducing a new product into the market, a company must have a strong strategic plan.
In this case, IKEA’s new strategic plan will be as follows.
Item Aim and themes Time period
Strategic themes The strategic themes of IKEA
will be used to develop
strategic and operational plans
like stakeholders, quality,
growth, finance and safety.
In the five years, IKEA will be
convening meetings under
themes like safety, growth,
finance. These themes will be
the basis for developing the
strategic and operational plans
of the company.
In every theme, the company
will be listening to the
community to understand their
needs.
Core ideology Addressing:
 Community objectives
 Partner objectives
Within five years, by 2023 the
company would have
addressed adequately the
needs of its community
(customers and employees)
satisfactorily.
The partner objectives, in the

CASE STUDY REPORT 9
same period will be building
strong relationship with
partners and working closely
strategically with suppliers.
The company will strive to
satisfy every stakeholder as it
re-evaluates its core ideology
as espoused in its vision and
mission statements.
Tactics and strategies IKEA tactics and strategies for
the five years will be centered
on bolstering competitiveness
and customer satisfaction.
Thus, in the next five years
the company intends to focus
on the following:
 Improve online
presence by use of
strong marketing and
communication tools.
 It will also run
consistent and regular
marketing and
promotional
campaigns while
targeting specific

CASE STUDY REPORT 10
markets.
 Develop a customer
satisfaction strategy
 Use pricing strategy
and differentiation
strategy to strengthen
its competitiveness.
In reference to the above strategic plan, it was mentioned that the company will be
listening to its community. The community mentioned here will be customers and employees.
Therefore, the company will consistently consult with its customers and employees. The
opinions of customers and employees can influence decision-making at IKEA. Thus, it would be
indispensable that the company consults customers and its employees on issues regarding the
new range of products. In the modern world, a leader should reach out directly to the people their
products and services matter. It would be on that basis that the CEO will consult customers and
employees. Furthermore, the company will also consult its partners to have a better
understanding on the market and supply chain that will influence directly its business activities
and operations.
Communication plan for the developed strategic plan
Description Method of Target Frequency Responsible

CASE STUDY REPORT 11
delivery audience
Updates – IKEA will
be updating its
stakeholders on its
upcoming products.
Mainstream
media: TV,
radio and
newspapers.
Social media:
Facebook,
Twitter,
Instagram, and
YouTube.
Homeowners
of between 20
and above
years.
On
mainstream
media, it will
be done twice
in a year.
On social
media, it will
be done once
in a week.
The
advertisers,
marketing and
communication
professionals
will be tasked
to plan and
execute any
relevant
communication
on behalf of
IKEA.
Conferences/meeting-
the company will be
holding meeting with
its stakeholders such
as employees and
suppliers to build
awareness on the new
range of products.
Face-to-face
communication.
Stakeholders
such as
employees
and suppliers.
Twice in a
year.
IKEA’s CEO,
marketing and
communication
teams.
Building public
awareness on the new
Social media Homeowners
and any
Monthly IKEA’s
marketing and

CASE STUDY REPORT 12
range of products.
IKEA will request
inform the people
about its new product
portfolio. This will be
a new strategy to
redirect the attention
of customers to new
products the
company is planning
to launch.
potential
customer
regardless of
their age.
communication
teams.
Measuring success of a strategic plan
To conclude, in measuring the success of the strategic plan, key performance indicators
such as costs, knowledge achieved, shared customer support tickets and employee satisfaction.
Besides, there are reasons that will require the strategic plan to be reviewed. According to Wang,
Zhu, Mayson, and Chen (2017, p.2) one can carry a review of performance or plan to determine
its effectiveness and efficiency. Thus, the reason the plan will be reviewed is to ascertain if it is
effective and efficient for a corrective action to be taken. The review shall also help establish if
an improvement plan should be developed.

CASE STUDY REPORT 13
References
Bowen, S.A., 2018. Mission and Vision. The International Encyclopedia of Strategic
Communication, pp.1-9.
Business Case Studies. SWOT analysis and sustainable business planning
An IKEA case study. http://businesscasestudies.co.uk/ikea/swot-analysis-and-sustainable-
business-planning/introduction.html
Li, C.Z., Hong, J., Xue, F., Shen, G.Q., Xu, X. and Luo, L., 2016. SWOT analysis and Internet of
Things-enabled platform for prefabrication housing production in Hong Kong. Habitat
International, 57, pp.74-87.
MacLeod, L., 2016. Mission, vision and values statements: the physician leader's role. Physician
leadership journal, 3(5), pp.18-24.
Kreutzer, R.T., 2019. Vision, Mission and Goals. In Toolbox for Marketing and
Management (pp. 33-48). Springer, Cham.
Wang, M., Zhu, C.J., Mayson, S. and Chen, W., 2017. Contextualizing performance appraisal
practices in Chinese public sector organizations: the importance of context and areas for future
study. The International Journal of Human Resource Management, pp.1-18.

CASE STUDY REPORT 14