STATEGY IN ACTION EVALUATING STRATEGIES Part strategic position and strategic choice which mention above are underlining company environment, capability, and its strategy. Strategy in action will consider on how strategy act in organisation (Johnson et al., 2011a).This part of report will evaluate them considering their suitability. Evaluation IKEA strategies regards Suitability Suitability refers to the strategy is used to evaluate whether the strategies address the key 'opportunities’ and ‘constraints’ underlined by the organisation 's strategic position (Johnson et al., 2008). This criterion can be examined by checking the strategic options against the environment, capabilities and the stakeholder expectations. Therefore, the …show more content…
In overall, it appears that IKEA capabilities and its strategies are suitable to compete in the rivalry situation. IKEA generates its strengths and overcome the weaknesses in a suitable way. Thirdly, evaluation of suitability of IKEA strategies and capabilities according to Ansoff analysis of 4 possible development directions will be examined. The suitability will be evaluated whether these options will match to future scenario. The future scenario which matches in a term of economical environment is predicted that the world economy will maintain very weak in 2013 and slightly decrease between 2014 and 2016 (The Guardian, 2012). Apart from evaluation the suitability of IKEA strategies and capability, the suitability will be used to assessment whether IKEA strategic options meet the stakeholder expectations (Johnson et al., 2008). Table 5 Evaluation of suitability – Direction of growth In overall, IKEA strategies and capabilities are suitable in the environment and meet the expectation of stakeholders. Market penetration may be the most appropriate direction that IKEA should carry on at the present time to the future scenario predicted. There is no major investment needed. The IKEA current strategies and its capabilities is now effective under this circumstance. However, there is a difficulty in IKEA’s strategies. IKEA is a global company which generates same strategies almost every market called one-size-fit-all approach (Stern, 2012). Although,
* Diversification can be a good way that IKEA does to sustain growth after it loses some cache. Product innovation and market development such as IKEA’s expanding goal in U.S. market. It is a risky strategy but with careful selection of the right kind of businesses, considerable improvements in profitability can be experienced. To try and maintain growth, IKEA is considering diversification outside of the furniture market.
As explained in the “bargaining power of consumers”, it is hard to substitute the products that are offered by IKEA. This is further intensified by the fact that IKEA has formed a brand perception that makes it stand out amongst its
This paper aims to demonstrate a detailed description of the elements of ‘IKEA’ company based on its famous name in the furniture industry.
In IKEA’s history two different modes of entry were used. Both were met with big success and allowed IKEA to enter new markets very easily, and in a secure way.
IKEA is rumored to be a very standardized retailer, i.e., a certain set of marketing strategies is used that are the same around the world. This indeed sets IKEA, operating on markets in Europe, US as well as Asia and Australia, apart among international retailers. Often the theoretical conclusions in international
IKEA is a worldwide expanded company. They enlarge their showrooms to North America, Europe, Australia and Asia. Customers can check out IKEA’s product in the show rooms and also by checking out IKEA’s websites to get their selected products to be home delivered. This is an effective way of selling their products as customers who are busy with their own work can purchase their preferred
IKEA is the largest furniture chain in the world, and in 2011 the Swedish company operated over 270 stores in 25 countries. In 2011 IKEA sales soared to over $35 billion, or over 20% of the global furniture market. Most of its stuffs believed IKEA will massive growth throughout the world in the coming decade because IKEA could provide what customer wanted: good design, and good made contemporary furniture with an affordable price. In one word, IKEA’s global approach focuses on simplicity, attention to detail, cost consciousness, and responsiveness in every aspect of its operations and behavior. (Jones, 2013)
The IKEA Group, one of the world’s top furniture retailers, has emerged as the fastest-growing furniture retailer in the US. Its unique business strategy has given it its strengths for its success today. However, like all strategies, IKEA’s strategy has its own flaws that can pose as weaknesses. IKEA also has a lot of opportunities in the marketplace such as expansions of their company and threats such as competitors in the same industry.
Ikea's success in the retail furniture industry can be attributed to its vast experience in the retail market and its ability to integrate both product differentiation and cost leadership strategies successfully.
Whilst, the market share of IKEA’s in UK itself leaping from 0.5% to 8.9% ($1.7b total income) compare to its competitor (e.g. Walmart), and aiming to achieve 13% ($2.4b) market share in the year 2020 (McClean, 2016).
IKEA is a manufacturer of home and business furnishings who offer interior furnishing products to consumers in several countries across the globe. Before IKEA plans on expanding and entering any new market, they are required to obtain a clear understanding of what consumer behaviour and requirements are in that particular market. There are basically two types of Markets which include Consumer Market and Business Market.
At the outset, it may be useful to characterise IKEA in terms of the characteristics of demand (also known as the four Vs, see Slack et al. p 20). First, IKEA is clearly a high volume operation – as indeed most international retailers are – which lends to systematising operations but which implies capital intensive processes and therefore cost considerations will be crucial. Second, IKEA offers a large number of products (up to 14000 depending on the country/store) so there is high variety in the
IKEA’s strategy before the mishaps in America could be characterized as going against the norm charting their own path to success using low priced manufactures to secure lower selling prices aimed to target those who were of older age and of middle class standing. Their new strategy was to target those of a younger demographic, young married couples, college students, and 20-30 something singles. By reemphasizing design, promoting through hip quirky advertisements, and encouraging consumers to do away with their old furniture, IKEA revenues doubled in a four-year period. IKEA today has adapted somewhat of a local customization strategy where their store layouts will resemble that of many local household layouts as proven by their success in China where they failed to expand beforehand. They also keep their prices extremely low in some areas as China by sourcing a large percentage of products in the area of operation.
The Competition Advantage Strategy of Ikea's product IKEA's success in the retail industry can be attributed to its vast experience in the retail market, product differentiation, and cost leadership.
Strategic posture: 1. Organizational profile (minimum one page) 2. Vision 3. Mission 4. Organizational objectives (bullet points) 5. Corporate governance (minimum one page) 6. CSR (minimum one page) 7. Core values (bullet points) 8. Code of conduct (bullet points) 9. Policies/standard operating procedure External factor analysis 10. Stakeholders analysis (primary, secondary) (diagram) 11. PESTEL analysis (minimum one page) 12. Task environment (minimum one page) 13. Issues priority matrix (diagram) 14. Porter five competitive forces analysis (minimum one page) 15. Strategic group (diagram) 16. Strategic type (one paragraph) 17. Industry matrix