Fundamentals of Management Assignment 2 (GC01920)

Table of Contents

1.0      Introduction (CVF)

2.0 The Company.

2.1 Profile: activities, size, finances, analyses (SWOT, Porter’s, PESTEL )

Overview of IKEA.

SWOT analysis.

Porter’s five forces analysis.

PESTLE Analysis.

2.1.1The PESTLE Analysis for IKEA.

2.2 Management approach (from CVF) and reasons why.

3.0 The Business challenge.

3.1 Description of the challenge.

3.2 Impact of challenges on the company.

4.0 Recommendations.

5.0 Conclusions.

References.

Appendices.

1.0  Introduction (CVF)

Competing Values Framework (CVF) is a theory that was developed by Quinn and Rorbaugh (1983). This theory focuses on the major indicators of effective organizations, where this theory found out two key dimensions underlying conceptions of effectiveness. The first dimension is closely related to the organizational factors/focus (Scott and Davis, 2015). This dimension focuses both on the internal and external development as well as the well-being of staff in workplaces. On the other hand, the second dimension focuses on organizational structure and represents comparisons between flexibility and changes and stability and control.

These two dimensions create four quadrants together. Every quadrant represents one particular organizational management theory. Human Relation Model focuses on internal issues, flexibility, morale, stress cohesion and human resource development as the criteria of organizational effectiveness. Open System Model focuses on flexibility and external issues along with growth, stresses readiness, external support as well as resource acquisitions. Rational Goal Model focuses on control and external issues along with planning, productivity, efficiency and goal setting as the organizational effectiveness. Finally, Internal Process Model focuses on control and internal factors including communication, stability, and control and information management (Quinn et al. 2015).

2.0 The Company

2.1 Profile: activities, size, finances, analyses (SWOT, Porter’s, PESTEL )

Overview of IKEA

IKEA is a European company of furniture, kitchen appliances and home accessories. It also provides home services. It was established in 1943 and Ingvar Kamprad was the founder. It has its business in 42 countries all over the world. Almost 127000 people are working under this organization (IKEA Annual Report, 2014). The company is working for ensuring a comfortable home for living. They have different types of products for the customers at reasonable prices so that they can afford those products from IKEA (IKEA, 2019).

SWOT analysis

According to Kotler et al. (2014), SWOT analysis discusses strengths, weaknesses, opportunities and threats of a company which factors are very much vital for the growth of the business. Strengths are those sides of a company that acts for the advantage of the business. On the other side, weaknesses keep a business lacking behind in various sectors. Opportunities refer to the chances for the company to adopt and the company can make progress with those. Threats are the dangerous sides for the business which can create any kind of problem for the company.

Porter’s five forces analysis

Porter’s Five Forces discusses five important external factors which control the performance of the business (Kotler et al., 2014). The factors are threats of new entrants, threats of substitutes, bargaining power of customers, bargaining power of suppliers and intensity of competitive rivalry.  The threat of new entry means the business may have to face some more rivalry. The threat of substitute factors indicates the changing of the choice of the customers. Bargaining power of both customers and suppliers increases when there are too many companies in the market. The growth of the business industries, the share of the competitors are the reasons behind the factor of the intensity of rivalry (Hautte, 2015)………………………………….

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