Strategic Management
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Strategic Management
Executive Summary
Strategic Management:The report revolves around the strategic management aspects of the IKEA Saudi Arabia. Different models and theories have been applied to IKEA Saudi Arabia to find out the strategic position of the company and analyze how it can improve its performance over the next few years. From the study of background, it is found that the company has a well-established name in the Furniture market and is one of the largest retailers around the globe. From the strategic analysis, it is found that the company has average EFE and IFE score which means that the internal and external factors support the company to an average extent. The CPM analysis also suggests an average position in comparison with two competitors as Walmart has a higher score than the IKEA Saudi Arabia based on the factors identified. The long-term objectives have been set out to ensure that the company keeps growing in the future; SMART goals have been set by the company to be achieved over the next few years.
The report also recommends the company on how it should go with the strategy in the future. Lastly, it has been found through the strategy evaluation that the company’s strategy is sufficient to generate the business and satisfy different stakeholders including the customers of the company. The report also recommends market development strategy to the IKEA in Saudi Arabia and globally as well due to the fact that this can help the company achieve its objectives in future and the QSPM model suggests that it is a better strategy to be pursued by IKEA.
3. Background of Ikea
IKEA is established by Ingvar Kamprad in 1943 as a business of mail order sales. Then IKEA started to sales furniture after five years. IKEA is a Swedish based company that offering wide range of furniture and accessories that make a well-designed house. Ikea Company has operations in 43 countries with 328 stores, 27 trading service offices, 33 distribution centers and 15 costumer distribution centers. Also, there are 43 units of Ikea Industry production in 11 countries. IKEA has 70,000 employees working in it around the world. Home furniture and accessories is the core business of IKEA. The IKEA is abbreviation of the finder name “Ingvar Kamprad” and the name of his place “Elmtaryd and Agunnaryd”. After that, they remain the abbreviation “IKEA” and make it refers to Innovation, Knowledge, Experience, and Accessibility. When we took about Ikea, there are three elements should be explained and focused which are the product, business model and competitors (IKEA Group, 2016).
As we know, Ikea is a private held international retailer of home product that sells furniture and accessories. There are approximately 9,500 products that Ikea offers for their costumer around the world. Always, Ikea products are designed ergonomically very well and in different colored to make them appropriate for costumers. In addition, Ikea is doing surveys and understanding the people need before they produce and design the products to ensure high quality, efficacy and affordable price. Also, people can design and plan any product and see it in 3-D as they need by using Ikea home planner. In each retail stores, Ikea classifies and arranges their products in such a way that can be easily picked by tracking the item number.
Since Ikea grew up, Ikea started to work with specified and selected suppliers from different countries. Ikea intended to become developed with its suppliers, so the product quality, design and safety are influenced by close partnerships. Our product developers and designers work with a diverse team of technicians, manufacturers and specialists. The IKEA Group engages through the chain that starts from range strategy and pass through product development to production, distribution and retail. So, Ikea consists of group companies (INGKA Holding B.V. and its controlled entities) has an ownership structure that makes a long-term approach and independence.
The furniture stores of United States which are Ashley Furniture and American Furniture Warehouse are the main competitors of Ikea. Also, Walmart is another large competitor to Ikea which does not only sell home furnishings. In addition, there is another company which is Target that sells stylish products of home that are same in quality and design to Ikea. Lastly but not least, Ikea competes with Home Depot and Lowe’s for consumer dollars in the categories of devices and wood items (IKEA Group, 2016)….
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