Ikea international company
Diversification of companies to the international level always come in hand with consideration of various aspects such as environmental scanning of its markets and the business itself. The external environment of a business is very crucial and implies the external factors which might affect the business. These are also put into consideration when forming strategies for business success or operations in the international market. Entering the global market is also the ultimate goal for every starting organization. A company which is at its international level is considered to be a well-established organization that is also profitable and diverse in terms of production and marketing (Hamilton, & Webster, 2018). The company has grown in the international market significantly and has a worldwide demand for its products.
It also sells products cheaply, and they are associated with an eco-friendly simplicity. The company is still growing and entering other international markets as the demand for its products is rising at a high rate (Hultman, 2012) Some of the competitors of the Ikea Company include American Woodmark, Tesco, Walmart, Amazon, Wayfair, Sears, Ashley furniture, John Lewis, Argos, and B&Q among others. Ikea’s mission statement: We offer a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them. Vision statement: To create a better everyday life for the many people. Assists in formation of management and operational strategies in an organization. Helps in marketing decision making and formation of marketing strategies Helps in analyzing and understanding the external business environment Helps in understanding and analyzing the external environment of a business.
Ikea PESTEL analysis in UK The pestle analysis framework is commonly used by entrepreneurs and marketers to scan and monitor the external environment of the business. The Ikea Company is influenced by the various external business environment such as the political, economic, social, technological, environmental and legal environment in the United Kingdom (Casas, Kavaliauske, & Dambrauskaite, 2011). The PESTEL analysis for the Ikea company will help us understand the impacts of the external environment to the company and will also facilitate our strategic and marketing decision making. Some of the elements include: • The UK has a steady economic growth which facilitates and accommodated businesses thereby impacting positively in their extensions. The financial stability in Europe has created a lot of potential markets in the country making the company to increase its market position and competitiveness by entering the possible markets.
• The economic growth in the UK has also facilitated the entry of international businesses and organizations which could be a threat to the Ikea Company as the level of competition is increasing over time. The company, therefore, has to venture in more strategies to win a competitive advantage in the market. • There are also low-interest rates in the UK which has facilitated the level of investment of the Ikea Company. • There is also an increase in households in the UK that creates a potential market for the Ikea where it can sell its products. People will consider purchasing home appliances and furniture products to fill their homes and make their houses complete. The Ikea Company can view this as an opportunity to increase its supply in the market.
Technological factors Technology has contributed significantly to the success and existence of companies in the UK. Some of the technical factors which have affected the Ikea Company include: • Technology has supported the organization in the marketing process. • The Ikea Company also has a high concern in environmental conservation and development where it supports and gives back to the society by helping in environmental growth such as planting of trees. Legal factors The company operates under a legal environment that affects it in various ways. Some of the statutory factors affecting the Ikea Company include the following: • The business legislations such as employment laws in the UK has greatly facilitated the existence of the Ikea Company. The rules are very supportive to international corporations and do not discourage the employment ratios of UK.
• There are product regulations in the UK has discouraged the existence of counterfeited products in the market this facilitating the product movement in the market. It also involves creating a new market by introducing a new products. It also implies focusing in the already existing market where the company already has some shares (De Wit & Meyer, 2010). No change strategy- this implies maintain of the current strategies and objectives until they see a necessity of a change Integration - this involves targeting new customers with the products and making changes in the market through vertical and horizontal integration. Caution strategies-the company should have a better understudying of the market before making any strategic decision. This involves proper evaluation of the market to establish the strengths and weaknesses so as to form great strategies.
This could also be done by growing sales using the available marketing resources and implementing diverse marketing strategies to increase general company sales. This will thus make the organization more profitable and competitive. Ikea international should also consider entering new markets and creating more customers through new products in the market. This will increase its penetration into new and existing markets that makes it more competitive and have a high market share. Ikea business level strategy The primary business strategy of the Ikea Company is to maintain cost leadership by providing the customers with high-quality products at lower costs. It will therefore reduce their production cost and attract more market by selling at low prices. The organization should also incorporate wide selection by creating diverse products which gives the customers many choices.
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