Introduction to Management
Strategic Management Plan for IKEA
Lecturer: DR PRASAD
2.0 SWOT Analysis
3.0 External Analysis (General Environment) based to:
4.1 Political Forces & Legal Factors
4.2 Economic Conditions
4.3 Socio-cultural Conditions
4.4 Technological Changes
4.5 Environment Factors
4.0 External Analysis (Competitive Environment) based on: 5.6 Intensity of rivalry among competitors
5.7 The threat of new entrants
5.8 The threat of substitutes
5.0 Internal Analysis based on:
6.11 Resources Types
6.12 Firms Capabilities
6.0 General Conclusion
8.0 Citations and References
This report sets out a strategic plan for IKEA. It seeks to identify the various components within the management framework that enables the organisation to seek future developments and win against competition. The report will review the company’s strengths, weaknesses, threats and opportunities and sets out its proposed strategies and goals. IKEA was founded in 1943 in Sweden by Ingvar Kamprad. Kamprad was born in 1926 as the son of a farmer in Smaland, a region in southern Sweden. The word IKEA was actually an acronym of his name and address: Ingvar Kamprad and Elmtaryd, Agunnaryd; the name of his farm and the name of the village which it was located within. IKEA initially was a one-man effort, with Kamprad selling fish, vegetable seeds and magazines to customers in his region. The turning point came in 1965 when Kamprad opened a store just outside the major city of Stockholm, to show what could be done in the way of designing and selling modern low-priced furniture in a large market. IKEA products are so wide in function, from plants to furnishing living rooms to decorating the kids’ playroom with toys. The whole concept behind IKEA is to produce amazing furniture at an absolutely low cost price so that those just starting out who are in need of relatively cheap, sturdy furniture can afford them yet do not feel short changed in terms of quality and aesthetic aspect of the furniture. That can mean a young family, college students or single people heading out for their first apartment away from home. The net income earned by IKEA in the fiscal year 2012 was EUR 3,202 million. The total value of assets owned by IKEA in the year 2002 increased from EUR 14,120 million to EUR 44,748 million. The IKEA mission statement is “to create a better everyday life for the many”.
| Key Ideas/Concepts
| IKEA is a strong internationally known brand.
| This enables it to attract different demographics of customers ranging from young couples starting their own family to families moving houses looking for replacement furniture.
| IKEA is an environment friendly business with a very sharp focus on sustainability.
| This allows it to put itself in a more socially responsible limelight, and attracting more investors as the trend in the recent years are towards companies that are sustainable.
| IKEA offers its products that are of good quality at competitive prices.
| This allows IKEA to have a strong competitive advantage over competitors in the same industry.
| IKEA has a long historical background and has maintained consistent increasing profits in its business.
| This will deter companies from entering the industry or competing with IKEA. This will result in more investors investing in IKEA as it is deemed stable.
SWOT Analysis (Continued)
| IKEA operates its business on a global scale.
| This means that its business strategies would be hard to implement on the differentiated local market preferences.
| IKEA provides quality furniture at amazingly low prices.
| IKEA furniture is...
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