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Strategic Direction IKEA case study Assignment Sample

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Strategic Direction IKEA case study Assignment Sample


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Executive Summary

The following study conceptualises comprehensive analytics on the key aspects of strategic directives involving IKEA. The introduction of the report illustrates a brief background to the report content followed by key scope and objectives.

The body of the report rationalises the current strategic aims of IKEA, component parts of the organisational strategy of the brand as well as environmental scan focus on terms of objectives of the business as well as stakeholders and their expectations. Regarding this prospect to avoid misalignment the report breaks down an organization's strategy into its component pieces, which are likely to each have their own unique plans and techniques. Moreover, the report strives to perform a critical evaluation of the tools selected and develop criteria for how the business may pick and utilise them. Profit, core competencies, quality, competitive considerations, and company procedures are all examples of supporting factors that are rationalised in following the study.

The conclusion conceptualises the key learnings of the study as it implies the effective use key tools for improving the strategic positioning of the company.

In recommendation throughout the study, the prospective use of SWOT, PEST and Porter’s Five are perceptualized for use behalf of the company.


The following report conceptualises the current strategic aims and objectives of the chosen businesses and evaluate the key prospects of these business. The study is formalised in the basis of some key questions in which organisational context of IKEA is rationalised.


To critically analyse the current strategic prospects of the organisations together with evaluating the strategic options directives of the business.


The key objectives are as follows:

  • To analyse the current strategic objectives of the perspective business.
  • To evaluate the progress of the strategic objectives and organisational strategy
  • To rationalise range of alternate options for revised strategic option

1.1: Critically analyse the current strategic aims and objectives of your chosen scenario/organisation, you may wish to consider the fuller hierarchy of objectives, within your critical analysis, enable greater detection of misalignment. Use techniques and modelling to underpin your critical analysis, where feasible.

IKEA objectives:   To provide a broad choice of high-quality and long-lasting home furnishings at costs that the vast majority of people can afford.

IKEA strategies:
“Self-assembly feature cuts operational & transportation cost”
“Concentrate on individual marketing rather than mass marketing”
“Opening small retail store and segmented marketing”

Importance of IKEA objectives:

“To offer a wide range of home furnishing items of good design and function, excellent quality and durability, at prices so low that the majority of people can afford to buy them”.
This is the driving force behind IKEA's leadership and workforce. This decision-making process is at the core of IKEA's decision-making process, as the company attempts to save money while preserving the quality of its products. Goals defined by IKEA's policies are used to assess and monitor the performance of workers, managers, and the whole company (Elizaveta, 2021). Strategic and tactical choices, including product design, production, distribution, retail, and assembly processes are all based on this foundational principle.

3) IKEA vision & mission statement:

 IKEA vision statement: To improve the lives of the vast majority of people

IKEA mission statement: Provide a comprehensive selection of well-designed, functional furnishings products at low prices so that as many people as possible may afford them. 
Thus, IKEAs business strategy is built upon the IKEA concept. The IKEA Concept starts with the idea of providing a range of home furnishing products that are affordable to the many people, not just the few. It is achieved by combining function, quality, design and value - always with sustainability in mind (Elizaveta, 2021). The IKEA Concept exists in every part of the company, from design, sourcing, packing and distributing through to business model.

Nevertheless, IKEA's business strategy is based on the following principles.

1.2: Decompose your organisational strategy into logical component parts, it is likely that each functional area will have their own customized strategies and tactics; it is within this sphere that misalignment often occurs. Not all component parts of the strategy will have the same value or level of risk; this may be considered in your analysis.

IKEA's supply chain is adapting to the changing market and altering client demands as the furniture retail giant continues to adapt. Ikea concentrates on a few important areas in order to maintain a successful supply chain.

Sustainability Initiatives

As supply chains get more complicated, many businesses find it difficult to keep track of the efforts made by each supplier. In response to this, Ikea released IWAY in the year 2000.

This standard lays out exactly what the firm expects from its suppliers, and what they may expect from the company as a result. For this reason, Ikea created the “e-wheel,” which is a unique method for assessing the environmental effect of their items at five major supply chain points:

  1. Raw materials
  2. Manufacturing
  3. Distribution
  4. Consumer use
  5. End of life

Inventory Management

“Minimum settings” are the lowest number of goods that must be available before a new order can be made, while “maximum settings” are those that allow for the biggest number of products that may be purchased at once. Ikea's “do-it-yourself” concept has also contributed to their supply chain's differentiation, enhancing inventory management efficiency (Elizaveta, 2021). Using small packaging, clients may transport their purchases from the warehouse straight to their homes, where they can assemble them themselves. Because of this, Ikea is able to keep more goods on hand, which lowers transportation costs. For “high-flow” products (items that account for 80% of a store's sales volume), restocking operations may be automated to reduce the need for shipping and hand refilling.

In-store Logistics

Because of the unique and uncommon nature of this feature, Ikea is able to function more efficiently in terms of items entering and leaving its shops. These employees keep track of all incoming deliveries, inventory, sort them, and then arrange them where they go.

Lessons to Learn from the Ikea Supply Chain

Businesses must be flexible in order to compete in the contemporary supply chain, which is constantly shifting in reaction to changes in the market, customer p

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