Examine approaches to strategr5y evaluation and selection
Analyse possible alternative strategies relating to substantive growth, limited growth, and Market entry strategies, and disinvestment strategies IKEA has marketed its products well and has dealt with all the problems easily. But there have been some constraints that came in the way of IKEA and alternative strategies have to be developed for them. These strategies are as follows: Substantive growth: In any business strategy growth is the most important factor. To achieve substantive growth the firm needs to go through a lot of planning. Some of the key advantages of substantive growth are: • Exponential Growth: Once IKEA achieves substantive growth in their business then they can be confident that it will lead to more growth in the future. There is a tendency of the growth of wealth at an exponential rate and the company can use these funds for other project to generate gains in future. While an organization achieves substantial growth the main benefit is that it helps in investing them for future benefits and achieving potential wealth gains. This is always a welcome consideration. • Competition: Substantive growth of IKEA will help them to understand the strength of the competition and developing the business strategy accordingly. The faster a company achieves substantive growth the easier it is for them to beat the competition. The added wealth that IKEA gains from substantive growth can be utilized to gain the market share from different competitors. The best thing about substantive growth is that it acts as a motivator. Once a business starts gaining substantive growth it can be more than sure that it has gained advantage over the competition. • Priorities: It is very important to decide the priorities in any business. Making clear strategies and deciding which goals need higher levels of importance will help the business in understanding the key priorities. Substantive growth acts as the best indicator and helps the strategists to make each and every step clear. It helps in rationally planning and deciding the goals that can be successful with time. Limited Growth: To achieve long term success and maximum growth IKEA needs to make sure that it is going through a period of limited growth. Limited growth will reduce risk and financial problems. To achieve limited growth the firm should make sure that the business is not running ahead of the expected goals. There should be consistency in the growth of the business that can only be achieved through limited growth. Limited growth can be attained by monitoring the business continuously and responding well to each and every situation. Market entry strategies: Till date IKEA has entered most of the markets successfully and has been able to adapt with the local conditions. The best marketing strategies that can be adapted to enter the markets successfully is to understand the wants of the locals and promote the product through different mediums. If the company uses an effective marketing mix in the markets of different countries then the market entry will be very easy for them. Disinvestment strategies: Disinvestment means liquidation of stock that leads to some policy change. Disinvestment can be used as an effective strategy by IKEA to liquidate its assets and build good relations with the local government. This strategy can be used to bring in positive changes and make the decision making process easier. To develop a strong disinvestment strategy the firm should analyse all its investments properly and focus on increased profitability. P8 Select an appropriate future strategy for a given organisation o Examine the approaches to strategy evaluation and selection and select an appropriate future strategy for the chosen organisation IKEA is one of the top furnishing companies in the world. They provide well designed home furnishing products at cost effective rates. The business model created by IKEA has...
Please join StudyMode to read the full document