Strategic Management and Ikea

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"Ikea: How The Swedish Retailer Became A Global Cult Brand IKEA is a well-known global brand with hundreds of stores across the world. In order to improve performance, it must assess its external and competitive environment which will reveal the key opportunities to analyze there advantages and threats. IKEA responds to both internal and external issues in a proactive and dynamic manner by using its strengths and reducing its weaknesses. This helps IKEA to retain its strong identity in market. IKEA’s passion combines design, low prices, economical use of resources, and responsibility for people and the environment. IKEA believes that there is no compromise between doing good business and being a good business. It aims to go beyond…show more content…
Hybrid strategy is a problem as IKEA is concentrating only on low cost and differentiating in design without considering the cultural values and norms enriched in different countries. American customers want more comfortable sofas, higher quality textiles, bigger glasses, more spacious entertainment units. Japanese want high quality and great materials, not low price and particle board. Large Hispanic families need dining tables and sofas that fit more than two people, which is the Swedish norm. They prefer bold colors to the more subdued Scandinavian palete and display tons of pictures in elaborate frames. 3.0. Analysis of the External and Internal Analysis 3.1. External Environment The world is experiencing tremendous and influential change. Although the company opened 14 new stores in fiscal 2003, sales growth was only 2.7%, largely as a result of the depressed economic conditions across Europe, the company’s core business region (Global Market Information Database, 2004). Thus, it is clear that, in order to improve performance at a significant level, simply opening new stores is not enough. Instead, IKEA must assess its external and competitive environment, determine the key opportunities and threats which face it, and align its strengths and weaknesses to best counter the weak consumer market, and thus generate the strong growth it needs to remain a strong brand and presence in its chosen markets (Johnson, Scholes and Whittington, 2005) 3.1.1 Macro
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