Organizational Strategy And Decision Making

It can also help them gain a temporary competitive advantage because other firms will not be able to imitate them to speak regarding IKEA’s strategy , IKEA’s strategy has continually been to style and develop product supported consumers’ everyday wants, keeping costs low and providing purposeful, engaging and reliable furnishings and solutions. property has been at the basis of IKEA’s strategy throughout its evolution. In 2012 it launched its folks and Planet Positive property strategy, that sets out the company’s approach to achieving positive social and environmental impacts. This property strategy brings all the weather of vision, values and mission along to drive innovation and rework the IKEA business. this may strengthen IKEA’s aggressiveness by securing long access to big raw materials and energy provides, maintaining and developing its provider base, developing relationships with co-workers and customers, and increasing market share

Introduction: As this report has comprehensible decision oriented approach. It is divided in 3 parts which describes the various problems identifications and assessments faced by IKEA across its market as the company is moving toward Globalisation.

IKEA-products are extremely popular, there are very few people that never heard about the yellow-blue brand. Moreover, it will (even) be hard to find people that have no products from IKEA in their houses. This makes us wonder: “Why is IKEA so successful?” We will analyze IKEA’s marketing department to answer this question. We think IKEA’s marketing strategies are very unique and therefore an important factor causing IKEA’s success. Our main belief was that IKEA is a company with a great proficiency in pricing. However, after some readings about the company we discovered all the 4p’s of the marketing mix are very well developed and still very innovative. IKEA’s marketing strategies are based on its democratic design statement; “Democratic design brings good design to the many

Mintzberg (1984, pp. 69) suggests “the notion strategy is something that should happen way up there far removed from the details of running an organisation on a daily basis and is one of the great fallacies of conventional strategic

In his article, “The Fall and Rise of Strategic Planning,” Henry Mintzberg (1994) provides his views on the process of strategic planning. He offers that most companies and organizations start a strategic planning process with little understanding of the definition or actual purpose of planning. He tends to admonish much of the conventional understanding concerning strategic planning and proposes his interpretations. He states that “the most successful strategies are visions, not plans” (Mintzberg, 1994, p. 107).

A strategy is the actual thought process involved to plan change, a course of action, or organization. Tactics are the specific actions required to bring about this plan developed during the strategic planning process.

To answer this question the current situation of IKEA will be taken into account in this report. Next to this also other aspects like a SWOT analysis and other theoretical information will be used to come to conclusion, recommendation and possible implementation.

IKEA is a business that designs, produces, and sells a furniture to the worldwide market. The company was founded in 1940s in Sweden by Ingvar Kampard (Milestones, n.d.). IKEA brand has been known by customers and become to the world’s largest furniture company. In 2016 IKEA sales increased by 7.9% and total sales amounted to €34.2 billion. IKEA stores are in 28 countries and more than 340 stores. Also, it has an online shopping available in 14 countries (IKEA Group, 2017). A good perspective of IKEA founder has driven the company to be accepted in the marketplace. Kampard has used the word “together” for inspiring the company and IKEA employees to work in the same way. Several reasons have built IKEA more achievement and managed the global environment in terms of operating business, saving cost, managing employees, and expanding IKEA in a new country.

This case study is to deliberate about IKEA’s marketing strategy in reaching out customers. Also discussing about IKEA’s business idea and IKEA follows a quite traditional pattern of internationalizing and also drives the localization thoughts in different market place to stay competitive. Their vision “To create a better everyday life for the many” and their ultimate business idea “ To offer a wide range of well designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them” actually has inspired many shoppers and influence the way people shop.

Garcia (2012) defines strategy as “a plan, method, or series of manoeuvres or stratagems for obtaining a specific goal or result”. However, Mintzberg (1987) argues that you cannot have a singular definition for strategy and instead, had five different definitions for the term. These were known as the 5 P’s. These P’s are: plan, ploy, position, pattern and perspective. A strategy is a developed plan, where you ploy to out maneuver your competition. You will have a position that you wish to achieve by carrying out different actions (pattern) and you set your perspective on the situation at hand.

Ikea developed an interesting product strategy and product range. The company had a good idea to setup a council to effectively manage and oversee products the company carried. The company’s focus to study consumer spending with the competition, gave them insight on how to construct a better

Besides, IKEA also offers product diversification for new market segments such as specific furniture for office and traditional furniture for older richer people. Therefore, IKEA business model had a little adjustment when the company’s focus on selling not only furniture but a prosperous lifestyle to the customer with developed complementary services like restaurant, cafe, and supervised children play area. Hence, IKEA redefines its image as an ideal place for family hangout in the weekend without compromising their vision of always affordable price for their stylish design

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 idea of strategy uses in organizations for business purposes, often understand as strategic management, started after the second world-war. The chronological order of definitions of strategy in organizational perspective is given by various writers in table-2.

The nature of strategy to adopt for an organization raised the so-called “design versus process” debate, which emphasizes the difference between deliberate and emergent strategies (Mintzberg and McHugh, 1985; Mintzberg and Waters, 1985). Deliberate strategies are defined as strategies that are formulated in advance, whereas an emergent strategy represents an evolving strategic pattern with or without advance planning. However Grant (2003) argued that this debate has been based upon a misconception of how strategic planning works in the real world. From his investigation of the strategic planning practices of the major oil companies, Grant (2003) derived that strategic planning “can be described as processes of “planned emergence”. The primary direction of planning was bottom-up – from the business units to the corporate headquarters – and with business managers exhibiting substantial autonomy and flexibility in strategy making. At the same time, the structure of the planning systems allowed corporate management established constraints and guidelines in the form