Strategic Management Analysis Report: IKEA, CSR, and Ansoff Matrix

This report provides an in-depth analysis of strategic management principles as applied to IKEA, a multinational furniture and home goods company. The report begins by outlining the potential benefits of strategic management, emphasizing the importance of market analysis and understanding customer behavior. It then applies the Ansoff Matrix to IKEA, examining market penetration, market development, product development, and diversification strategies. The report also addresses corporate social responsibility (CSR) as a key concern in modern strategic management, highlighting IKEA's strengths and areas for improvement in this area. It concludes that strategic management plays a crucial role in organizational success, particularly in navigating CSR issues and adapting to market changes. The report uses case studies and academic sources to support its arguments, offering insights into IKEA's strategic decisions and their implications.

Theory and practice of
strategic management

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Potential benefits in strategic management, which could have come further analysis................3
Ansoff Matrix..............................................................................................................................4
One strategic management concern of the modern era................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Strategic management is concerned with an approach using which organisations ensure
that they are able to achieve their goals and objectives in best possible way. This essay will
discuss about strategic management in context of IKEA. It is a multinational group of Swedish
companies. It was founded in 1943 and is headquartered at Delft, Netherlands. Company designs
and sells ready to assemble furniture, kitchen appliances and home accessories. Essay will
involve review of strategic programs, application of Ansoff Matrix and analyse incorporation of
CSR in organisational model.
MAIN BODY
Potential benefits in strategic management, which could have come further analysis.
As per case analysis, Ikea can use Ansoff’s matrix for identifying the current side of
management where it emphasizes in order to make their product more valuable, demanding and
unique (Golensky and Hager, 2020). The marketing management of Ikea has to take in focus on
evaluation of strategic process where each and every customer can understand the overall
business performance and efficiency in marketplace. Ikea is based on the planning model that
help for identifying the current market strategy.
The corporate strategy is primarily focused on the collection of enterprises in which Ikea
competes, develop and coordinate with enterprise portfolio. This type of strategy deals with
corporate responsibilities include goal identification, process of management. It may support of
Ikea to define the competitors for developing synergies while coordinating, investing personnel,
sharing and financial resources. In context of corporate social responsibility, corporate strategy
will support for Ikea to handle the current situation of business. As per case study, it has been
examined that Ikea is liable to create more value through their enterprises by maintaining overall
business portfolio, which make sure that enterprise can gain long-term opportunities.
For Example- Ikea’s growth potential in other countries such as China. There was an
increases growth within international companies where globalization has forced company to deal
with existing consumers. By considering the CSR strategy, Ikea is able to maintain their
centralised control over functional activities (Johnston and Sheehan, 2020). It takes more

advantage within low prices and enhanced quality from international suppliers. Furthermore,
control over strategic direction is improved and ensure that Ikeas help to improve logistics
process. By implementing corporate strategy, Ikeas continues to expand the business while
eliminating CSR related ethical issues. The importance of corporate strategy that help for rapidly
triggers a range of challenges which imposed on the business culture or environment.
Business planning of Ikea is mainly depending on the corporate strategy that help for
identifying current issue or problem in the workplace. Usually, Ikea may consider as political,
social and legal aspects, which will impact on the external environment or culture of
organization. In case, Ikea will consider as Ansoff’s model that is always support for identifying
the better practicing strategy. At some level, it become easier for Ikea to differentiate its current
business position, market value and brand image in global world. As critically establish a relation
to corporate strategic practices which involves political and social parameters.
Ansoff Matrix
Ansoff matrix is one of the best models to identify and understand strategic directiona
available to organisation. Directions available in this model are based on two elements that are
product and market and these are further based on two variants that are new and existing
(Loredana, 2017). On the basis of these four elements, strategic directions available to
organisation are-
Market Penetration
This is first strategic direction in the model and utilises existing products to increase sale in
existing market. This means that this direction suggests that IKEA should work on increasing
market share in existing market. There are certain strategies that can be utilised by IKEA in order
to increase its market share in existing market. These strategies involve sales promotion,
variation in price and increase promotional efforts to influence potential customers.
Market Development
This is another strategic direction and as per this direction IKEA needs to utilise existing
products in new market. Market development involves extending operations of IKEA in new
market. Market development takes place on the basis of extension geographical markets and
extension in customer segments.

Produce Development
Product development involves development of new products to serve needs and requirements of
existing market and customers. This strategy is suitable when core competency of firm is related
to products rather than specific market (Cleberg, 2019). IKEA’s competencies are related to
products of the company and this is why, this strategy is suitable for IKEA. Success in this
strategy is directly linked with innovation capacity of the firm.
Diversification
This strategic direction involves developing new products for the new firm. This is a strategy that
involves highest risk compared to all other strategies. IKEA has to develop a new market which
is similar to its existing market.
Among all these strategies IKEA can adopt market development strategy because its core
competencies are linked with product. This strategy is also suitable on the basis of resource
based view, on the basis of this view IKEA needs to determine strategic resources and
capabilities that can be utilised to achieve sustainable competitive advantage. Strategic resources
of the company involve strong position against competitors, effective suppliers’ relations,
financially sound and good company relationship with labour. These are certain resources and
competencies of IKEA which enables it to achieve long term sustainable advantage and these are
also required for market development (The Ansoff Model, 2020). This means that with help of
financial resources company can make investment for market development, along with this good
relation with suppliers are also required to and helpful for market development strategy and its
success.
One strategic management concern of the modern era
Corporate social responsibility: In the context of corporate social responsibility it can be said
that it is the management concern in which companies take social and environmental concern in
their business operation and interact with their stakeholders. CRS is one of the main hot topic
and issue and there are several companies who are taking it seriously and focusing on
maintaining it. Companies need to become socially responsible and need to perform all activities
by thinking about needs of future generation. In the context of IKEA it is found that it is lacking

in the area of understanding consumer behaviour, it also requires rethinking and improving
vision, mission and objectives, overall, it can be said that it requires becoming socially
responsible and improve relation with stakeholders (Advantage, 2020). In addition, it is also
found that IKEA needs improvement in marketing management as well as development of HRM
policies and procedures.
By becoming socially responsible it can regain trust of customers and stakeholders. By
reducing wastes and implementing environmental policies it can become socially responsible. It
has some strength that can also help it out in reducing this problem and attracting customers to
the great extent. It is stated that IKEA is maintaining formidable positions against competitors. It
is also trying out to maintain good company relations with labor. It can help it out taking
competitive advantages and improve image in the market. CSR is the main key of success as it
can help companies in taking better decision. There are some goals which it wants to achieve.
 It wants to maintain local consumers’ taste about its product or home furnishing for
making them feel comfortable and valued.
 It wants to increase brand name in the mind of consumers’.
 It also wants to expand retail stores.
For accomplishing all goals it requires to improve relation with stakeholders and improving
quality of products and services. By focusing on quality with the help of total quality
management, six sigma and other operational management approaches, it can accomplish all
goals and can attract stakeholders. It is found that it focuses on lower class segment and takes care
of their interest (Agudelo, Jóhannsdóttir and Davídsdóttir, 2019). IKEA need to analysis upper-
lower class people and target them. The main aims of targeting this segment as they need and use
furniture and this company can build its product according to their needs and retain them with the
brand for the long run. It also has to cope with this value transaction in lower level class which is the
primary market for its products. By making use of effective strategy like attitude changing strategy it
can become the market leader. It is also found that IKEA’s products are low in price so they require
low-involvement as far as price is concerned. It can help this company out in taking better decision
and becoming more socially responsible. Pricing strategy and TQM also helps it out in reducing
wastes and satisfying needs of customers. It also has to cope with this value transaction in lower level
class which is the primary market for its products.

CONCLUSION
From above discussion, it has concluded strategic management plays important role in
organization, which is always support for enhancing overall business capabilities or abilities. It
has summarised about the corporate strategy that applicable in Ikea and support for eliminating
CSR issues within organization. In this report, it can identify the corporate social responsibility
issues in context of moral or ethical ways. Sometimes, it is very difficult for handling the
problem so that implementing Ansoff’s model while considering appropriate strategies.

REFERENCES
Books and Journals
Advantage, C., 2020. Corporate Social Responsibility. CSR and Socially Responsible Investing
Strategies in Transitioning and Emerging Economies. p.65.
Agudelo, M.A.L., Jóhannsdóttir, L. and Davídsdóttir, B., 2019. A literature review of the history
and evolution of corporate social responsibility. International Journal of Corporate
Social Responsibility. 4(1). p.1.
Cleberg, C., 2019. Strategic Success: The Ansoff Matrix vs. The Balanced Scorecard.
Golensky, M. and Hager, M.A., 2020. Strategic leadership and management in nonprofit
organizations: Theory and practice. Oxford University Press.
Johnston, J. and Sheehan, M. eds., 2020. Public relations: Theory and practice. Routledge.
Loredana, E.M., 2017. The use of Ansoff matrix in the field of business. Annals-Economy
Series. 2. pp.141-149.
Online
The Ansoff Model. 2020. [Online]. Available Through: <
https://www.smartinsights.com/marketing-planning/create-a-marketing-plan/ansoff-
model/ >.