IKEA Strategic Planning Assignment On Techniques Used To Enhance Business Performance

Question

Task: Has the IKEA strategic planning assignmenthelped enhance the brands exposure ad performance?

Answer

Introduction
IKEA, the world's largest retailer of home furnishings, was chosen for this IKEA strategic planning assignment. The company's goal is to improve the lives of several individuals each day. Customers in the United Kingdom may shop and purchase through IKEA's website, which has 18 locations. IKEA has retaliated against the growing concern for environmental sustainability in society. To ensure that the company's business practices are sound, it adheres to a robust environmental policy. It needs to overcome more obstacles and face greater competition as a global corporation. IKEA has become a household name in the furniture sector because to its low prices. Many people's lives are improved by IKEA's extensive range of well-designed, cost-effective home furnishings. To maintain a high degree of interest in the suggested products among this target group, it is necessary to stick to a certain model and stylistics.

IKEA strategic planning assignmentSWOT Analysis
This IKEA strategic planning assignment has used SWOT analysis, to determinewhat the company's greatest assets, weaknesses, opportunities, and threats are. The assessments provide critical information about their dependability. Internal, external, negative, and positive situations are all assessed using this approach. The firm has to identify its strengths, weaknesses, opportunities, and threats to make the required adjustments to improve its performance (Sund et al. 2020). For a business to be successful, it must make use of its strengths and manage its limitations.

IKEA strategic planning assignmentPESTLE Analysis
PESTLE analysis may be used to gain a better understanding of IKEA's present situation because it allows for the consideration of a wide range of elements.

Political
The influence of politics on the future of the brand should not be underestimated. Regardless of where you live, you can find IKEA products all around the world. Therefore, to comply with UK law, it is necessary to take into account the recognized taxation regulations and expectations on businesses in the nation (Arestav and Åström 2018). It is also necessary to take into account the law that governs export and import. However, as long as IKEA follows the rules set down by the UK government, there are no major obstacles in the nation standing in the way of its further growth. The stability of the state and its laws can be a positive element in advancing the brand's position as per research findings identified on this IKEA strategic planning assignment (Vico 2021).

Economic
IKEA must look at the present health of the economy in the state where it wants to do business, including economic growth and inflation rates as well as state stability and unemployment rates as well as the income of individual citizens. Consequently, the UK's economic stability makes it an attractive option for implementation. One of the most successful models ever, with a high degree of dependability, stability, and interest (Vico 2021). Although it is widely utilized in the United States, the Libra currency is also considered a valuable worldwide financial instrument. British citizens enjoy a steady income, which implies they have more negotiating power. As a result, the provided component should be considered as a benefit to the brand's long-term performance.

Social
An important part of a consumer's decision-making and buying preferences is represented by this element (Vergassola 2019). When this element is taken into consideration, the favorable scenario for the growth of IKEA can be seen. Individuality and a unique approach to home design are becoming increasingly important to the inhabitants of the United Kingdom. As a result, the brand's popularity in the country continues to rise. As a result, IKEA can address the present needs of the community for original, creative, colorful, and inexpensive furniture that promotes personal growth and enhances the aesthetic appeal of a home (Vergassola 2019). Since IKEA items, appliances, and other products are designed with a specific lifestyle in mind, its marketers may successfully attract new customers and increase sales by stressing this ability.

Technological
IKEA is aware of the essential role technology plays in its success and performance. It has previously been claimed that it aims to promote its products among young people who are drawn to unconventional and new ideas. Due to this, the firm devotes a considerable portion of its resources to the development of technology incentives that will assist to build new goods that are more appealing to the young because of their mix of many characteristics (Malmgren and Mötsch Larsson 2020). As a result, IKEA is continually launching new product lines that incorporate the most up-to-date thinking in the fields of design, furniture, and sustainability to suit the needs of its varied consumer base. Because of this, technology may be viewed as a catalyst for the brand's further growth.

Legal
IKEA should keep a close eye on some things to make sure that no legal action is taken against them. To begin with, it must guarantee that workers at sites in the United Kingdom can satisfy the current needs (Malmgren and Mötsch Larsson 2020). No child labor or other unlawful practices are used, which indicates that there are no discrimination or employment laws that can be related to the brand's operation and future growth.

IKEA strategic planning assignmentEnvironmental Factors
IKEA also aims to be environmentally friendly. When it comes to manufacturing, the firm claims to exclusively employ clean and safe raw materials. In other words, there aren't any potential health-related claims against your clients. It also invests in renewable energy development in impoverished countries to suit the needs of the brand's customers (Baraldi and Ratajczak-Mrozek2019). As the demand for sustainability develops, renewable energy sources such as solar and wind power are becoming more and more crucial. These aspects demonstrate the company's attention on promoting numerous environmentally friendly ways that boost the brand's worldwide image and contribute to its becoming a global leader in this field.

PESTLE Factors has influenced Opportunity and Threats
Conducting the PESTLE analysis had given some of the ways which further can influence the opportunity and threats of IKEA, which are defined as below:

Opportunity
In emerging economies, retail sales climbed by at least 5% last year, creating a big opportunity for IKEA's revenue growth. However, except for in China, it hasn't made a significant foray into the developing world yet (Baraldi and Ratajczak-Mrozek2019). A great method for IKEA to promote the future growth of these regions would be to open new stores in Brazil, Mexico, Indonesia, and Malaysia. IKEA's website attracts 870 million unique visitors every month, which gives the firm a fantastic opportunity to take advantage of the expanding trend of online retail sales and reap the benefits of increased earnings and lower expenditures. Because of the present trend toward eating more healthfully, many developed countries have witnessed a surge in the demand for food (Garnier and Poncin 2019). With the expansion of its retail sites, this IKEA strategic planning assignmentidentified that brand may also expand its grocery operation. Existing food locations are effectively managed by the firm, thus this new venture would be a natural progression for them.

Threats
Home furnishings and furnishings accessories are sold by IKEA's competitors, such as Walmart, ASDA and Tesco. Because of IKEA's low prices, well-organized supply chain, and wide distribution network, these huge retailers are able to take market share from IKEA with ease (Garnier and Poncin 2019). A rise in the typical consumer's income means that consumers are buying less low-cost, low-quality items, just like the ones that IKEA sells. An increasing standard of living will make IKEA less appealing to consumers, who will instead shop at stores with a better selection of home furnishings. Then there's the bad press that comes along with it. Ikea may be sued by customers who were harmed as a result of using an IKEA product. A lawsuit isn't even necessary to bring down a company (House and Kádár 2020). To generate more bad talk, terrible reviews, and significant blowback, all it takes is a mob of furious customers on social media. To combat this, IKEA must be mindful of how they are seen online.

Addressing Strength
With its focus on low costs and high efficiency, IKEA strives to be the most cost-effective firm imaginable. It's imperative that the firm continually seeks out and incorporates new and inventive methods of reducing expenses. Products that contribute to a more sustainable environment and are less expensive or novel methods of packing, transporting, and handling materials are among the company's latest advancements. Keeping long-term business ties with IKEA's suppliers is a high priority for the company. As a result, the corporation is able to purchase big quantities at reduced rates and with higher quality, while suppliers are assured of steady business. Material transportation expenses are reduced by purchasing resources near to the source. The IWAY technique is also used to integrate suppliers into the company's supply chain. An integrated supply chain reduces costs and provides a competitive edge. Like its smaller rivals, IKEA offers a wide range of products and services on offer. The corporation also owns and runs restaurants, residences, and apartments in addition to furniture. Despite the fact that the company's primary business is the design, manufacture, and sale of furniture, it is less influenced by market changes than other furniture merchants. ?

Democratic Leadership
On this IKEA strategic planning assignment’s research we identify the brands management style is democratic. Managers at IKEA usually encourage their employees to offer suggestions for improvements at the office. Managers take into consideration their ideas and then make a final choice. Managers must also be able to decipher the thoughts and feelings of their staff to increase productivity. IKEA's staff are energized by this aesthetic. Managers at the company always speak with workers before making a final decision. Therefore, employees will be more motivated to work harder(House and Kádár 2020).

Workers are more likely to take an active role in company decision-making when the management style is more democratic. Managers may consult their personnel or seek their thoughts on the final choice from time to time. A worker's motivation to work more may be boosted if they are allowed to share their thoughts and ideas with their employer. It is stated that by enabling employees to engage and counsel their supervisors, co-workers feel that they have contributed to the achievement of objectives (Rodrigues and Brandão 2021). As a result, the co-workers become more motivated and eager to work harder. In democratic management approaches, good communication between the various levels of management is crucial. Managers must be able to communicate their ideas properly and grasp the comments of their employees. This sounds like a management style that Ikea would utilize because of the more laid-back atmosphere and efficient communication methods. For the sake of corporate choices, this promotes a democratic management style among employees (Rodrigues and Brandão 2021). With the correct communication and understanding, managers can make the best decisions for the organisation. Therefore, people are more motivated to work harder. Democratic leaders like Ingvar Kamprad are hard to come by. IKEA is an excellent example of a family-owned firm that has thrived. IKEA was formed as a family business, and its ideals are still based on that model. There are certain characteristics of the family company that is distinct from other types of businesses (Sørensen et al. 2021). A typical characteristic of the head of a family firm is that he or she has a strong sense of self-direction and a desire to be in charge of the majority of the company's operations. As a result, the culture, strategic growth, and success of the company are greatly influenced by the owner's leadership style, visions, and intuition, which are applied entirely with little opportunity for deviation. When it comes to leadership, Kamprad has a mix of democratic and paternalistic tendencies, which means he values employee input both for the information it provides and for the sense of purpose it gives people inside the company (Sørensen et al. 2021). As a result, this can lead to a better rate of production. The fact that this is a family firm with a strong entrepreneurial spirit may explain part of Kamprad's more authoritarian leadership style, in which the final decision-making authority rests with him. According to Ingvar Kamprad, a great example of a Democratic Leader, he also possesses some of the personal traits that belong to a Democratic leader as a full leader.

Corporate Social Responsibility
Chief Sustainability Officer Pia Heidenmark Cook is in charge of IKEA's CSR operations. Starting in 2012, One of the first companies to look at CSR data was People & Planet Positive, a home improvement and furniture company. This IKEA strategic planning assignment has also identified that Ikea's corporate social responsibility (CSR) programmes include giving back to the communities in which it works, educating and empowering its workers, and addressing issues of diversity for underrepresented groups. In addition, the largest furniture retailer in the world is aiming to reduce its energy use and obtain it from other sources. As part of its CSR efforts, IKEA aims to ensure that all of its goods are sourced from sustainable materials.

Here, IKEA's corporate social responsibility actions, commitment, and communications to various stakeholders in the Soviet Union are analyzed critically in light of this critical case study. In terms of corporate social responsibility (CSR), IKEA is a goldmine of information. Globally, IKEA is the biggest retailer of furniture. The corporation has reaped the benefits of several high-profile marketing triumphs throughout this time. The company's retail turnover has increased 400% in the last decade. As a result, the company's business strategy is based on the notion of controlling tactical resources, notably through the administration of a network of 1,500 dealers in 50 developing nations. Dealers take on the role of middlemen and deliver the materials directly to IKEA, allowing the firm to provide furniture at lower prices to customers. Pressure on IKEA from environmentalists and anti-globalization demonstrators has piled up due to the seeming disappearance of the world's forests, which has made it a target of anti-globalization protestors. Among the topics that IKEA brought up were environmental concerns and the company's commitment to social responsibility.

Assisting Local Communities, IKEA
• The IKEA Group has 422 shops in 50 countries. Home renovation and furnishing retailer wants to have a good effect on the areas where their stores are located
• As part of an IKEA-sponsored event, customers and Save the Children volunteers packed over 7,000 comfybaskets with playthings and other items for Swedish children.
• Over 1 million trees have been planted across the United Kingdom by IKEA.
• Workers at IKEA's Perth and Adelaide locations in Australia work to enhance the living and learning environments of the country's youngsters.

Worker Empowerment at IKEA
• With its new hourly pay structure in effect in January 2015, IKEA prioritizes the well-being of its workers over market standards.
• Employees of all levels have access to a wide range of face-to-face and online learning tools thanks to My Learning.
• Employees all over the world were given the opportunity to discuss potential career paths at IKEA during the company's annual Talent Focus Week in April 2016.

Energy Consumption (IKEA)
• A 50% improvement in energy efficiency has been achieved by IKEA's energy-consumption products since 2008.
• 15 percent more energy efficient IKEA-owned buildings were occupied in FY2015 than the previous year's buildings were in 2010.
• Nearly 700,000 solar panels have been put on IKEA-owned structures to date.
• It is estimated that IKEA has installed 730,000 solar panels on its buildings across the world and that it now owns and operates 327 wind turbines.

Reducing waste and recycling via IKEA
• 60% of the furniture sold by this shop is manufactured from renewable resources, and 10% is made from recycled materials. 60% of the items.
• Up to the year 2030, IKEA plans to use entirely renewable and recyclable materials in its products.
• Saving 1,400 tons of food, or 3 million meals, since the Food is Precious initiative began in 2016.
• In the case of IKEA's Schapiro Chair, it's all recycled plastic.
• Largest print run ever on 100% Forest Stewardship Council-certified paper: the IKEA catalog

Securing Long-Term Supplies at IKEA
• More than 86% of the wood used in IKEA products is sustainably harvested.
• According to a statement from the company, 94% of the fish and seafood items are MSC or ASC certified.
• Marine Stewardship Council (MSC) or Aquaculture Stewardship Council (ASC) accredited fisheries or farms will supply fish and seafood for restaurants and Swedish Food Markets, the firm has stated (ASC).
• Every year, IKEA offers more than 100 million cups of coffee. Certified by UTZ and EU Organic, PTR coffee is the company's PTR coffee range

IKEA makes charitable donations
• The brighter Lives for Refugees program has received EUR 7.7 million from the IKEA foundation.
• The cotton used by IKEA comes from ecologically friendly farms in at least 76% of the company's inventory.
• Forbidding child labor, forced labor, and workplace discrimination, IKEA maintains a Supplier Code of Conduct that prohibits these practices from occurring. A safe and healthy working environment and employee freedom of association are also mandated under the company's Code of Compliance.
• Toys sold in IKEA stores in November and December since 2003 have raised EUR 1 for Save the Children, an independent nonprofit organization.

Conclusion
IKEA has become a global phenomenon in the sale of furniture items because of its creative business strategy and concentration on goods, processes, and systems. In order to increase its market share, the company's business plan may be replicated in a variety of other industries. So, the company will require new tactics that combine low-cost leadership with other aspects of success, such as scalability and an emphasis on product quality. Finally, this IKEA strategic planning assignmentidentified that the firm may want to expand into other areas where its products and business strategy are more likely to succeed and where it may reach previously untapped customers.

References
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