Table of Contents
1.1 IKEA background.
1.2 Report structure.
Task A: Market Environment Analysis.
2.1 External (Macro) Environment Analysis.
2.1.1The PESTLE Analysis for IKEA
2.2 Internal (micro) environment analysis.
2.2.1 Porter’s Five Forces Analysis for IKEA
2.3 Critical Success Factors of IKEA
Task B: Resource and Capability Analysis.
3.1 IKEA strategies to manage its resources and capabilities.
3.2 IKEA Value Chain Analysis.
Task C: Strategic Fit Analysis.
4.1 SWOT Analysis of IKEA
4.2 How IKEA’s strengths and weaknesses fit the opportunities and threats in its market environment
Effective management of strategies of a business plays a significant role in organizational goals and objectives. Kotler et al. (2014), strategic management is a way of defining and applying several strategies to meet organizational goals and objectives. Palmer (2013) said strategic analysis focus on the development and implementation of business strategies in gaining sustainable competitive advantages. The strategic analysis outlines both internal and external business environments. For analyzing internal business factors, a number of models are applied such as SWOT and Value Chain Analysis tools. For analyzing external business factors, PESTLE analysis tools, and Porter’s Five Forces model are widely used. This report conducts a strategic analysis of a business name, IKEA.
This report, first, outlines a brief discussion on strategic analysis and management along with the IKEA backgrounds. Then, this report conducts a critical analysis of the internal and external business environment of IKEA applying several analytical tools and techniques. Following this, this report conducts a capability and resources analysis of IKEA using several analytical tools. Finally, this report conducts a strategic fit analysis of the IKEA business.
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1.1 IKEA background
IKEA was founded by Ingvar Kamprad in 1943. IKEA is now operating in 42 countries with more than 127 countries. It is serving millions of customers every week with its more than 127,000 thousand devoted and dedicated staff. The key products of IKEA are home accessories and home furnishing. The mission of IKEA is to make better everyday life at home and its vision is to create a comfortable and welcoming home for the people. IKEA attracts all ages people including children, young, adults, men, and women. IKEA is now operating in global markets including Asia, Africa, the US, and the EU (IKEA Annual Report, 2014).
Task A: Market Environment Analysis
This section conducts a market environment analysis of IKEA focusing on both internal and external business issues. As Kotler et al. (2014) suggest, the external business factors are analyzed using PESTLE and Porter Five Forces Analysis. The internal business factors are analyzed using SWOT analysis tools.
2.1 External Environment Analysis
External environmental issues are those which come from outside of the business that is not controlled by the business. According to Kotler et al. (2014), the PESTLE analysis tool is widely used to analyze the external environment of a business. PESTLE refers to political, economic, social, technological, legal, and environmental factors. The following diagram shows the elements of PESTLE tools………………..
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