In this assignment, it mainly explains focus on the strategic management process. There are 3 main part of the assignment where each part describes on the different stages in the strategic management process. Strategic management is the art and science of analysing, formulating, and implementing decision that enable an organization moving towards to archive its organizational goals and objectives.
Strategic management process consists of three major stages which is strategy analysis, strategy formulation and also strategy implementation. At the strategy analysis stage, a firm, in this assignment IKEA will identify and evaluate its external and internal environment. External environment can be further divided into general environment and also the competitive environment. The use of several tools such as PESTEL analysis, Porter’s five forces, Value chain analysis, SWOT analysis is essential to assist IKEA to identify the firm operating environment.
At strategy formulation stage, IKEA focus on to attain and sustain a competitive advantage. There are three levels of strategy which IKEA have to be consider in this stage. At business level strategy, IKEA will formulate the strategies which help the firm to gain competitive advantages of either in cost leadership or product differentiation through its core competencies. The purpose of business level strategy is to maximize the profit in daily operation of the strategic business unit. With the help of corporate level strategy, IKEA will select new strategies positions which contribute in increase the firm value. Resources are limited in an organization hence, it is essential for IKEA to allocate the resources efficiently to archive best practice. With the help of resources base approach and corporate parenting, the allocation of resources can be done effectively and efficiently. At this level, The Ansoff Growth matrix is a tool that cans helps IKEA to decide their product and market growth strategy where the BGC matrix enable IKEA access the competitive position and hence identify the rate of return on the SBU. International level strategy help IKEA operate in the international phrase. The reason of a firm to expand international is to archive Performance Enhancement, Cost Reduction, and Risk Reduction purpose. When operate at international level, IKEA can adapt either International strategy, Global strategy, Multidomestic Strategy or Transnational strategy which suit the local operation. At this level, IKEA will also consider the various type of entry mode which is appropriate. Lastly, when come to the implementation stage, IKEA will go through the issue such as resources allocation, impact of culture on strategy, the proper organizational structure, organizational processes, strategic control system, changes involve in implementing new strategy, integrative change, strategic leadership, corporate governance, corporate ethics, and stakeholders issue.
Table Of Content
Table of Content
Strategic Management Process
External Environment Analysis
Internal Environment Analysis
Resources, Capabilities, and Core Competencies
Cost Leadership Strategy
Resources Based Approached
International Strategy and Globalization
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