Strategic Analysis of IKEA
International business strategy
The Strategic Analysis of IKEA
Laura Burns
11027915
Executive Summary
This report is a strategic analysis of Swedish home furnishing giant, IKEA. The report gives an overview of corporate strategy, using Ansoff’s matrix as a tool for analysis, allowing us to see how IKEA have developed their strategy. The business strategy is then discussed using Porter’s five forces model as a tool for external analysis. Internal analysis can be identified using either the value chain or the resource based view, this report uses Porter’s value chain. An evaluation of the strategy is then explained using Rumelt’s 1980 criteria. Ethical considerations are then discussed including sustainability and the IKEA foundation. Conclusions and recommendations are then given to close the report.
Contents Page
1. Introduction…………………………………………………………………...………..Page 3
2. Corporate Strategy…………………………………………………...………………..Page 3
3. Business Strategy …………………………………………………...………………....Page 4
4. Evaluation of Strategy …………………………………………………...…………....Page 7
5. Ethical Considerations…………………………………………………...………...…..Page 8
6. Conclusions…………………………………………………….……………...………..Page 8
7. Recommendations…………………………………………………...…………….…..Page 9
8. References …………………………………………………...………………………..Page 10
9. Appendices…………………………………………………………………...………..Page 11
1.0 Introduction
1.1 Strategy
A strategy is a carefully planned action plan which meets a challenge. Bad strategy is a form of magical thinking and unrealistic goals whereas good strategy is critical and well planned. A good strategy will suggest a hypothesis about how to increase your business in the most productive way.
IKEA’s strategy is clear; ‘IKEA targets young furniture buyers who want style at low cost’ (Porter, 1996).
1.2 IKEA
The parent company of the IKEA group is INGKA holding B.V. IKEA is a Swedish home furnishing company which is now the global leader (Euromonitor 2013); currently
The Strategic Analysis of IKEA
Laura Burns
11027915
Executive Summary
This report is a strategic analysis of Swedish home furnishing giant, IKEA. The report gives an overview of corporate strategy, using Ansoff’s matrix as a tool for analysis, allowing us to see how IKEA have developed their strategy. The business strategy is then discussed using Porter’s five forces model as a tool for external analysis. Internal analysis can be identified using either the value chain or the resource based view, this report uses Porter’s value chain. An evaluation of the strategy is then explained using Rumelt’s 1980 criteria. Ethical considerations are then discussed including sustainability and the IKEA foundation. Conclusions and recommendations are then given to close the report.
Contents Page
1. Introduction…………………………………………………………………...………..Page 3
2. Corporate Strategy…………………………………………………...………………..Page 3
3. Business Strategy …………………………………………………...………………....Page 4
4. Evaluation of Strategy …………………………………………………...…………....Page 7
5. Ethical Considerations…………………………………………………...………...…..Page 8
6. Conclusions…………………………………………………….……………...………..Page 8
7. Recommendations…………………………………………………...…………….…..Page 9
8. References …………………………………………………...………………………..Page 10
9. Appendices…………………………………………………………………...………..Page 11
1.0 Introduction
1.1 Strategy
A strategy is a carefully planned action plan which meets a challenge. Bad strategy is a form of magical thinking and unrealistic goals whereas good strategy is critical and well planned. A good strategy will suggest a hypothesis about how to increase your business in the most productive way.
IKEA’s strategy is clear; ‘IKEA targets young furniture buyers who want style at low cost’ (Porter, 1996).
1.2 IKEA
The parent company of the IKEA group is INGKA holding B.V. IKEA is a Swedish home furnishing company which is now the global leader (Euromonitor 2013); currently
References: IKEA (2014) About the IKEA group. [Online] Available at http://www.ikea.com/ms/en_GB/about-the-ikea-group/company-information/index.html [Accessed 3rd January 2014] Pentasoft (2014) Some Clients and Success Stories