Business Analysis

Topics: Strategic management, IKEA, Value chain Pages: 16 (5090 words) Published: August 28, 2013
1. Introduction of IKEA1
1.1 Basic information and history1
1.2 Structure of the group2
1.3 Structure of the essay2
2. The strategic position of IKEA3
2.1 Macro-Environment of IKEA3
2.2 Operational environment analysis of IKEA4
2.3 Strategic capabilities of IKEA5
2.3 Purposes and Expectations of IKEA7
2.3.1 Stakeholder Mapping7
2.3.2 Business ethics and social responsibility8
3. The strategic choice of IKEA9
3.1 Corporate level strategy9
3.1. 1 IKEA overseas expansion of strategy9
3.1.2 Diversification11
3.2 Business level strategy11
3.2.1 Differentiation strategy of IKEA11
3.2.2 Low cost strategy of IKEA12
3.2.3 Strategy clock13
3.3 Evaluation of suitability13
4. Future development and challenges14
4.1 Changing of corporate level strategy14
4.2 Changing of business level strategy15
5. Conclusion15
6. Reference17

1. Introduction of IKEA
1.1 Basic information and history
The name IKEA was formed from Kamprad's initials (I.K.) plus the first letters of Elmtaryd and Agunnaryd, the farm and village where he grew up. He continued to expand his business to a variety of goods, including wallets, watches, jewellery and stockings. When he outgrew his ability to call on his customers individually, he converted to a sort of makeshift mail order operation, hiring the local milk van to make his deliveries. Ikea are rooted in a traditionally poor region in south of Sweden. And after 60 years’ development, growing up in 20th century Sweden has shaped both their products and their values. Their website side IKEA is a value-driven company, they promise to deliver well designed, functional and sustainable products at the lowest possible price. I would list the brief history of IKEA below in figure 1.

Figure 1

1.2 The structure of the group
The graph 2 listed below is the structure of IKEA.

Figure 2

1.3 Structure of the essay
After the introduction I would write strategic position of IKEA and it include environment, capabilities and expectations and purposes. Furthermore I would like to use some models to explain this part such as SWOT, Value Chain and so on. In the next part I will write strategic choices and it includes three parts. Firstly, I would evaluate and describe the business level strategies. Secondly, I would evaluate and describe corporate level strategies. Finally, I will evaluate the suitability of the strategic choice. In the fourth part, there would be a future development of IKEA. The last part is a conclusion.

2. The strategic position of IKEA
2.1 Macro-Environment of IKEA
In this globalised market, changing is a forever theme. As Henry Mintzbery (1994) argues that environmental change is faster than you could see. The pace of technological change and the speed of global communications mean more and faster change than ever before. I would like to use PEST framework to illustrate the macro-environment of IKEA. PEST analysis stands for "Political, Economic, Social, and Technological analysis" and describes a framework of macro-environmental factors used in the environmental scanning component of strategic management. In case of IKEA, I would choose China to conduct the PEST analysis. Because China is a new emerging market and has the significant strategic meaning to the future development of IKEA, I set China as the target to do the PEST analysis. Political

1. The Chinese government was trying to attract foreign direct investment and encourage foreign companies to open their factories in China. 2. The opening police means government support the foreign company’s development. 3. There are a lot of special economic development zones in many provinces of China. 4. Government stability is really good and there are some taxation police to the foreign companies. Economic

1. The high speed development of the Chinese...
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