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Posted: February 27th, 2025
Intoduction to Strategic Management
Introduction
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IKEA is a Swedish company which deals with selling of inexpensive designed furnishes.IKEA was founded in 1943 in a village known as Aggunaryd by Ingvar Kamprad.He found IKEA when he was just 17 years old. IKEA has 76,000 workers and it operates its business in 43 countries .In 2003 IKEA had a total of 165 stores in 22 countries and 21 stores outside IKEA group, which was operating by franchisees in 14 countries. In 2003 310 million people or customers visited IKEA.IKEA of Almhult Sweden is the one which deals with production development and about 108 people visits IKEA yearly. http://www.geocities.com/TimesSquare/1848/ikea.html IKEA buys its products from Europe 64%,Asia 33% and North America 3 % http://www.ikea-group.ikea.com/?ID=127&num=4
THE MISSION STATEMENT
The main characteristics of a mission is to illustrate the services and customer needs that the company will attempt to satisfy, It also tries to show the image of the company and it discovers the scope of its operations in product and market. http://64.233.183.104/search?q=cache:dOWlWHalfvsJ:www.entrepreneurship.fiu.edu/downloads/colleen_post/Class%2520three.ppt+ikea%27s+mission+statement&hl=en&ct=clnk&cd=119&gl=uk&client=firefox-a
When talking about a mission statement things to be considered are the main objective of the firm or business and strategies. A mission statement should contain the following:
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A mission statement is a purpose or aims that an organization sets for the development of its own business. These are the goals set which must be reached and achieved. IKEA as company it has its main goals which it has set so as to have an effective business.
The main mission of IKEA is ‘to create a better everyday life for many’ this is their main mission. http://www.ikea.com/ms/en_US/ikea_near_you/woodbridge/new_wood_app.pdf. The mission means that the Ikea’s products are affordable to every one because it has the best products at a lower price and so anyone can afford them. The vision of IKEA is to create a better everyday life for many people.
The Following are the internal factors affecting the strategy development of IKEA
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Michael Porter suggested that any organization should develop its own competitive advantage by having or functioning the internal activities at a lower cost than its competitors (Bartol et al, 1993:211)
Internal factors are the factors affecting IKEA internally that is within IKEA and not outside. These can be the weakness or strength that is positive or negative factors affecting the strategy development. We should focus our idea on how IKEA organize its business through designing, delivering, services; marketing and how it supports its products these are things to judge and the figure below explains it better that is the value chain analysis it shows how the business adds value that is how the internal factors bring profit to the business. In which there are activities which are done primarily and other are supported activities. The primary activities are mainly five and these are:
The inbound logistics Ikea has 276 stores in 36 countries, and so it ensures well distribution of its products Will My Use of This Service Stay Private?Yes, totally! We lock down your info with top-notch encryption—your school, friends, no one will know. Every paper’s custom-made to blend with your style, and we check it for originality, so it’s all yours, all discreet. |
Operation Ikea operates through advertising its products .It also purchases its products from Europe which is 64%,Asia 33% and North America is 3% |
Outbound input Warehousing and distribution of products to the customers through delivering products at customers homes. Do You Use AI to Write Papers?No way—our papers are 100% human-crafted. Our writers are real pros with degrees, bringing creativity and expertise AI can’t match. Every piece is original, checked for plagiarism, and tailored to your needs by a skilled human, not a machine. |
Marketing and sales Ikea has taken a full control of its firm through controlling product by encouraging the customers to buy their products. IKEA controls a large market in world wide. |
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The value chain it divides the firm separate forms it performs such as follows:
Appendix 1
http://www.ukeducation.org.uk/UkeduFrames/Documents/images/Value_chain_Diagram_1.jpg
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Ikea has jus give more modification to its value chain by introducing a two way value system between the customersand the suppliers and the headquarters of Ikea where by the customer is the supplier of labor,time,information,knowledge and transportation.The customers can also be the suppliers in the other way round
The external factors are the factors that affects Ikea’s strategic development externally,These factors can be viewed within the Theories of Porter’s generic forces,The five forces, PESTEL analysis and SWOT analysis and these can be seen as follows:
PORTER’S GENERIC FORCES
Porter identified the things that can bring a competitive advantage and these are low costs and differentiation. And so he developed three generic strategies that a firm or a business can use and the generic strategies are cost leadership, differentiation and focus. IKEA has try to use the 3 generic strategies so as gain competitive advantage and this is seen as follows:
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The five forces analysis
The Porters’ five forces is one the source which leads to a competitive advantage of any business firm because they enhance acquisition of profits, Porter argues that ‘the intensity of competition in an industry is neither a matter of coincidence nor bad luck. Rather it is rooted in its underlying structure’ Paul Dobson, Kenneth Starkey and John Richards (2004) page 26.The following is how five forces are analyzed:
The PEST analysis is so very important in any organization such as IKEA. The PEST analysis consists of Political, Economic, socio-cultural, Technollogical and so these factors affect IKEA’ s strategic development in one way or another.This cabe seen as follows
Political or Legal factors
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Economic factors
These are the factors which affects IKEA economically and this can be as follows:
Socialogically
THE SWOT ANALYSIS
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Opportunities |
Threats |
New invention of the products |
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Possibility of the new stores |
Strong competitors |
Removal or weakening of |
Environmental effect How Fast Can You Handle Urgent Deadlines?Super fast! Our writers can deliver a quality essay in 24 hours if you’re in a pinch. Pick your deadline—standard is 10 days, but we’ll hustle for rush jobs without skimping. |
The performance of IKEA in the past 2 years
The main services of Ikea is selling products to its customers at the price which is very affordable.through.As their mission states that is to create a better life for everyone.Its products are of lower price but they are not long lasting and so the customers have been complaining about their products.
IKEA distributes its products through delivering them customers residences,through this method it helps attract many customers and at the same time Ikea has failed to distribute its products at the time given.
It has try to produce the new quality and brand new goods at the end of every year,every year there is a new catalogue.
FACTORS THAT WILL AFFECT IKEA
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Ikea might loose its market because as the days goes by a lot of competitors arise with new products and which are of good quality and durable ones ,Ikea is now facing competition from WH-SMITH an Argos ands so on.Sometimes competition becomes intense because of the unique products or the differentiation of the products.
This can affect I kea’s success because there is no one who would like poor services but everyone would like the best or better services,and so the lateness of handling of customers’goods can cause a very big pit fall..
Loosing of customers
Ikea might come to face such aproblem because it doesn’t satisfy its customers’needs such as delivering the products at the right time to its customersand sometimes they give wrong promises such as we will deliver your products after one hour then when it reaches the time they don’t do the same.
Conclusion
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IKEA as a business firm it has its own mission which is ‘creating a better everyday life for many’so as to make its good as cheap as possible by doing this Ikea has gained a lot of customers and it has been recognized widely which has made him to expand his business,In the way of expanding it also faces competition from its rivalry such as WH-SMITH and Argos.Ikea as a company has its mission and vision but it has fail to improve its services to people through delivering the products to its customers.
REFERENCES
Paul Dobson, Kenneth Starkey and John Richards(2004) Strategic management 2nd edition
http://www.geocities.com/TimesSquare/1848/ikea.html
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http://www.ikea-group.ikea.com/?ID=127&num=4
David Boddy (2005) Management an introduction 3rd edition, prentice hall
http://www.ikea.com/ms/en_US/ikea_near_you/woodbridge/new_wood_app.pdf
http://www.ikea-group.ikea.com/?ID=726
C. Bowman. (2004), strategic management, Prentice-Hall of India, New Delhi
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G. Dessler. (2001), Management, 2nd edition, Prentice-Hall, New Jersey
Fred R.David (2005)Strategic Management concepts and cases 10th edition,prentince hall
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