Apple and Ikea: A Strategic Planning Comparison of Global Operations

This essay provides a comparative analysis of strategic planning between Apple and Ikea, focusing on the strategic role of operations, the impact of globalization, and the influence of Corporate Social Responsibility (CSR) strategies on their operations management. It examines how Ikea empl...Read More

Running head: COMPARE AND CONTRAST OF STRATEGIC PLANNING
COMPARE AND CONTRAST OF STRATEGIC PLANNING
Name of the Student
Name of the University
Author Note

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Table of Contents
1. Introduction................................................................................................................2
2. Strategic role of operations and ways by which organization sustains its
competitive advantage................................................................................................................2
3. Impact of globalisation on operations management...................................................3
3. CSR strategies and their impact on operations management.....................................4
Conclusion......................................................................................................................6
References......................................................................................................................7

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1. Introduction
Operations management is an area that is mainly based on the proper management of
a process that is related to the designing as well as controlling different processes that are
related to the development of business operations in order to produce the services and goods
(Wang et al. 2015). The changes that take place in external environment have an impact on
the effective production related operations that are conducted by the organizations
The analysis in the report is on the comparison of impacts of three major aspects that
include operational strategies, globalisation and CSR strategies. The organizations that have
been taken into consideration are Apple and Ikea. The impacts of the three aspects on
operations management of the two organizations will be analysed in detail. The comparison
will be based on levels of impacts of the factors on the global operations of Apple and Ikea.
2. Strategic role of operations and ways by which organization sustains its competitive
advantage
The generic strategy that has been implemented by Ikea in order to develop its
operations is a mix of differentiation and cost leadership. The organization has aimed at
maintaining low prices along with the high quality products that are offered to the consumers.
Competitive advantage has been gained by Ikea with the help of cost effectiveness of the
products that are offered to the customers at low prices (Salavou 2015). The cost
effectiveness is maintained by Ikea as the company owns its production process and the cost
of production are reduced in the process.
The generic strategy which is implemented by Apple is based on broad
differentiation. The products that have been developed and provided to the customers of
Apple are based on developing the products that are different from products of their
competitors. The operations are also developed in such a manner that is able to maintain the

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position that has been formed by Apple (Belton 2017). The differentiation that has been
developed by Apple is based on the products that are offered including, iPods, iPhones and
Macs. The iOS software is considered to be a differentiating factor in the industry.
The strategy of cost leadership that has been implemented by Ikea is quite different
from that of Apple as the former has aimed at developing products at low prices and the latter
has offered its products to consumers at high premium prices and developed an image based
on their quality (Linton and Kask 2017). The impacts of strategies on the operations of Ikea
and Apple are high based on the development of production based systems in an efficient
manner.
3. Impact of globalisation on operations management
Globalisation and expansion had a major impact on the effective operations of Ikea
and its profitability levels in the industry as well. The expansion or relocation that had been
made by Ikea in China had faced major issues. The organization is mainly known for the low
priced products that have been offered by Ikea in different parts of the world. Ikea had
formed a joint venture with a local organization in order to understand different laws and
issues. The low priced image of Ikea had however been confused by the consumers of Ikea as
low quality based. The competitors of Ikea in China had started copying the products and this
had an impact on the requirement of proper modifications in the furniture that are offered in
the market (Zinovieva et al. 2016).
Globalisation has a major impact on the operations and factories of Apple Inc. that
have been developed in different parts of the world. The organization had started its
production process in China in the Foxconn factories with the aim of reducing the costs.
However, the recent increase in labour costs that have been experienced by Apple in China
have an impact on the organizational operations and costs as well. The unavailability huge

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number of skilled labour has increased their demands in China that has further to increase in
cost of production in the factories. The organization has been struggling to meet the demands
and needs based on skilled labour in different positions. The upstream suppliers of Apple
have also played a major role in increasing the costs in a huge manner (Hitt, Xu and Carnes
2016).
The global strategies that have been implemented by Ikea are related to the expansion
of entire operations in new country. On the other hand, the strategy of Apple is based on the
outsourcing of production activities to a cheaper country. The impacts of globalisation on the
two organizations are quite different in terms of production processes and expansion (Salavou
2015).
3. CSR strategies and their impact on operations management
The CSR strategies that have been developed by Ikea have played a major role in the
operations of the organization in the industry and in different countries as well. The company
has taken the initiative of producing the same amounts of renewable energy that it will
consume within the year 2020 (Ikea.com 2019). The Better Cotton Initiative that has been
taken by Ikea is also a major factor that has affected the revenue levels and the sales of the
organization. The operations and procuring process of raw materials are considered to be
important factors that affect the sustainability based initiatives (Ikea.com 2019). The
reduction of greenhouse gases is an important activity related to development of sustainable
environment that has been performed by Ikea.
The Wood that is used for development of furniture in Ikea is also sourced in a
sustainable manner that can reduce the negative effects on the external environment. The
initiatives taken by Ikea in the US are also important for the development of its position in
the country (Ikea.com 2019). Solar and photovoltaic systems which have been introduced by

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Ikea are able to play a major role in the development of its systems. Wind energy has also
been used by Ikea in order to generate power that is required for the proper functioning of
their production based systems. The raw materials are also procured by the company in a
sustainable manner in order to fulfil the needs and demands of the consumer effectively
(Ikea.com 2019).
Tim Cook, the new CEO of Apple had started providing much more importance to
CSR activities in comparison to the previous CEO of the organization. The efficiency of the
operations of Apple were increased under the leadership of Tim Cook. The CEO was more
focussed towards the development of a broad focus that is based on CSR. The levels of
investments that are made by Apple in renewable energy had increased as well (Hitt, Xu and
Carnes 2016). More than 80% of the entire operations of Apple in the US is based on
effective renewable energy. The consumption of energy has been reduced in the process of
development of the products of Apple. The focus of Apple on enhancing the environmental
performance was one of the major factors that had an impact on the operating procedures
related to the products (Ferraris, Santoro and Dezi 2017). Apple Inc. has also started reusing
different materials and products for the process if manufacture and has tried to reduce the
amounts of global wastes as well.
The CSR based strategies that have been implemented by Apple and Ikea are quite
similar to each other as both aim at reducing the levels of impact that their operations have on
the external environment. This has been able to play a major role in the development of
sustainable operations of Apple and Ikea. The impacts of CSR strategies on Apple and Ikea
are similar in terms of the development of operations related to low effects that the
productions have on the environment (Belton 2017).

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4. Conclusion
The analysis can be concluded by stating that the two organizations have been able to
operate successfully in their respective industries with the help of proper responses that have
been provided to changes in the external environment. The three different aspects that have
been considered for analysis in the report have influenced the operations of the two
companies in a huge manner.

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References
Belton, P., 2017. Competitive Strategy: Creating and Sustaining Superior Performance.
Macat Library.
Ferraris, A., Santoro, G. and Dezi, L., 2017. How MNC’s subsidiaries may improve their
innovative performance? The role of external sources and knowledge management
capabilities. Journal of Knowledge Management, 21(3), pp.540-552.
Hitt, M.A., Xu, K. and Carnes, C.M., 2016. Resource based theory in operations management
research. Journal of Operations Management, 41, pp.77-94.
Ikea.com 2019. WE WANT OUR BUSINESS TO HAVE A POSITIVE IMPACT ON THE
WORLD - IKEA. [online] IKEA US/EN. Available at:
https://www.ikea.com/us/en/about_ikea/newsitem/060214_sustainability_initiatives
[Accessed 26 Mar. 2019].
Linton, G. and Kask, J., 2017. Configurations of entrepreneurial orientation and competitive
strategy for high performance. Journal of Business Research, 70, pp.168-176.
Salavou, H.E., 2015. Competitive strategies and their shift to the future. European Business
Review, 27(1), pp.80-99.
Wang, G., Dou, W., Zhu, W. and Zhou, N., 2015. The effects of firm capabilities on external
collaboration and performance: The moderating role of market turbulence. Journal of
Business Research, 68(9), pp.1928-1936.
Zinovieva, C.G., Kuznetsova, M.V., Dorfman, T.V., Limarev, P.V. and Limareva, J.A., 2016.
Study of external and internal factors affecting enterprise’s stability. Advances in Systems
Science and Applications, 16(1), pp.62-71.

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