Week 3 (Reflective Writing)
It is important to comprehend the industry's and business environment for organizations to make a penetration point available on the market if it is a new company or even to gain a sustainable competitive benefit available on the market by exploiting center competencies and capabilities if is an existing company in the industry. There were different methods which were used to analyze the external environmental layers of an organization. I needed to find out about the several types of environment which an organization might have which week provided some very nice learning and deep insights about the analysis of the environment and understanding of the managerial environment.
The key ideas that have been gained out of this week were (1) I could recognize the organization as an available system, (2) I learnt different proportions of organizational environment such as complexity, stableness, market diversity and hostility, (3) I known the strategic significance of environmental check out and management of environmental conditions, (4) I known the value of industry research and (5) Finally, this week taught me Politics, Economic, Friendly and Technological (PEST) analysis for analyzing the environment. All the above principles were easy and I understood or learnt them successfully. But I would like to increase my knowledge by reading Michael Porter's book "Competitive Strategy" because it is one of the greatest achievements and literatures regarding the environmental examination.
I read articles "The five competitive makes that condition strategy" by Michael Porter (2008) in which I learned the five forces (1) Bargaining ability of customers, (2) Bargaining Power of Suppliers, (3) Threat of New Entrants, (4) Risk of Substitutes, and (5) Competitive rivalry within the industry were the very best forces that identified an industry's elegance and its environment. Moreover, if these forces were favorable from company's perspective then the company might capitalize this opportunity if the above forces weren't favorable then it could consider a harvest or divest strategy to leave the industry.
Week 4 (Reflective Writing)
The Macro-economic environment is the most crucial environment which a company or business must consider for devising an efficient technique to gain a sustainable competitive edge in the marketplace. The micro-economic environment of any business or industry would depend on the macro-economic environment and there is a direct relationship between the business's success and its own macro-economic environment that is surrounding it. I needed to study from this week that the way the macro-environment worked and how it could change the dynamics of a business or business environment.
The key ideas which I learnt from this week were (1) I could acknowledge the macro level businesses of an economy, (2) I read about the objectives and different instruments adopted by federal government for devising an efficient macro-economic insurance plan, (3) I could discuss effects of macro-economic environment on business's performance, and (4) I attempted to investigate the performance of UK market in macro-economic conditions. Probably the most interesting principle was the round movement of income. I would like to increase my knowledge by reading a book "Macro-Economics - A modern approach" by Robert J. Barro.
I read articles "The competitive benefit of Nations: Is Porter's Gem Model framework a fresh theory that explains international competitiveness of countries" by way of a. J. Smith (2010). The platform released by Michael Porter is a good framework to recognize the macro-economic factors for analyzing an enterprise environment to raise the competitiveness of an organization. Regarding to Michael Porter, the firm's strategy, framework, and rivalry, factor conditions, demand conditions and reinforced industry play the most significant role in the competitiveness of industry and organizations. Most of all, government plays the main element role to improve the aforementioned factors by devising an efficient macro-economic strategy.
Week 5 (Reflective Writing)
Economic environment of Europe is badly afflicted by the global economic recession and financial crisis. It really is a danger for business and industrial environment of European countries. As I possessed learned in the previous week that governmental macro-economic regulations could change the dynamics of business or industry environment of the country. In such a paper, I needed to learn about the key issues regarding the macro-economic environment of European countries and exactly how these could affect the business and commercial environment of Europe. Also, I was curious to explore the policies and strategies of European Union.
After this week, I was able to (1) understand the most important trends and geopolitical developments that occurred in Europe in the modern times, (2) evaluate the shape work of European Union in conditions of administration and coverage making and its own implications for modern business practices, (3) Examine the concerns due to successive European Union Enlargements, European Monetary Union with debates on Euro and UK's awareness for joining European Union. I studied different concepts about the monetary and monetary developments and everything were easy to comprehend. But I'd like to increase my knowledge by reading the publication "European business and Marketing" by Harris and McDonalds.
An article by Rayna Karcheva namely "Two Years after European union Accession: Risks and Problems to New Member States" analyzed the current EU Accessions. It had been a study which offered a comparative evaluation by selecting eight European Union Countries and identified how the European Union accessions had effects on political constructions and attitudes of the eight countries. This informative article provided some deep insights that have been important and related to the week's learning.
Week 6 (Reflective Writing)
It is very important to organizations which can be operating globally or internationally to understand the global environment to be internationally competitive. A global or multinational firm must operate successfully by employing both the components of centralization and decentralization to make it through internationally. The component of decentralization is important because various areas of the planet have different varieties of environment and the multinational organizations have to customise their operations to use under different environments in different parts of the world. I wanted to learn the several perspectives of an international environment which multinational businesses might face while operating internationally. Moreover, I needed to study the effects of changes in international environment on organizations that were present globally.
After studying the module in this week, I was able to (1) understand the globalization, its different sizes and its effects on business and professional environments, (2) illustrate the different dimensions and perspectives of any globalization, (3) identify the forces that were significant in globalization (such as political, social, economical and scientific conditions of different locations) and (4) understand the importance and role of globalization to be competitive by cost and differentiation advantages. I did not find any principle difficult. But I'd like to learn the reserve "Competitive Strategy" by Michael Porter to comprehend the globalization and competitive strategies.
Again, the article "The competitive good thing about Nations: Is Porter's Gem Model framework a fresh theory points out international competitiveness of countries" by A. J. Smith clarifies international competitiveness and globalization (2010). Porter's gemstone model is the greatest framework to identify and review the global business environment to increase the competitiveness of an organization. According to Michael Porter, the firm's strategy, composition, and rivalry, factor conditions, demand conditions and supported industry play the most important role in the competitiveness of industry and organizations. Most importantly, government plays the key role to enhance the aforementioned factors by devising a competent macro-economic strategy. This short article also defines that how global companies could achieve competitiveness through globalization.
Week 7 (Reflective Writing)
It is era of progression and development. The dynamics of the world market are changing speedily and various less developed elements of the entire world such as Africa and Asia are growing rapidly with a economic growth. I called it a economic progress because most of the developed nations have the expertise while these less developed countries have resources. The firms for developed countries are relocating to less developed countries in the quest of resources and cost-advantages to conquer your competition. Therefore, these nations are enjoying a continual and integrated financial growth anticipated to direct overseas assets (FDIs) by firms from the developed world. I wanted to learn from this time about producing economies of world like Asia, Africa and America and make a comparative research of the economies. This week taught me some facts and insights about the producing nations of the world.
In this week, I learned (1) the rising influence of expanding economies on other areas of the globe and different characteristics of these raising economies, (2) to judge the Brazil, Russia, India and China (BRIC) countries' contributions to the global economy and differences among them, (3) different challenges encountered by BRIC countries and different challenges expected to be confronted by them in future, and (4) to propose different solutions for the growing and reformation of Africa. All of the concepts and topics related to these countries were interesting and I gained what I wanted easily and proficiently. For further enhancement of my knowledge, I would study the booklet "The Shackled Continent: Africa's Former, Present and Future" by Guest.
I studied an Article "India since Independence: An analytical expansion narrative" by J. Bradford Delong (2001) where I learnt the tendencies in economic development of India and the different factors which predicted development in Indian overall economy and were likely to further increase the Indian market in future. The main factor that caused Indian market to grow was the government initiatives and macro-economic plan which made India as one of the quickest growing economies of the world.
Week 9 (Reflective Writing)
Market Access, Market Leave and Competitive Strategy are the main decisions which a company may need to adopt to gain a sustainable competitive benefit in the marketplace. It's very crucial for organizations to check out the environment of the industry at both micro or macro levels to have a strategic decision for making it through available on the market. Different frameworks such as Advantages, Weaknesses, Opportunities and Threats (SWOT) examination, PEST analysis and Porter five forces are being used by firms to recognize the business buildings and to examine the industry for devising an efficient and useful strategy. I wanted to learn the most correct, valid and reliable construction for studying the industry and I found that Porter five causes was the best framework that might be used to investigate the industry to make a technique.
After learning the module, I (1) known the several types of market constructions and tendencies of businesses. I also known the implications of market constructions on behavior of businesses, (2) studied different types of tournaments such as monopolistic competition, oligopoly and monopoly and way of measuring of competition by awareness ratios, (3) analyzed the role of governments to regulate the competition and competitive strategies of firms, and (4) learnt how to analyze market buildings and industry by Porter five causes and known its implications to specify an organization's strategic positioning. I recognized all the ideas efficiently and I'd like to learn the e book "Competitive Strategy" by Michael Porter to increase my knowledge.
I read articles "What is Strategy" by Michael Porter (1996) where he identified that Strategic Placement and operational success were two totally different techniques and ideas. As almost all of the companies mixed up operational efficiency and strategic positioning while studying business conditions. Operational Effectiveness is essential for a business success however, not sufficient for this. An organization must create a strong strategic positioning to be internationally competitive also to gain a sustainable competitive edge which is not imitable by competition. Strategic Positioning is an entirely different approach which is "performing different activities from competitors or undertaking similar activities in several ways". On the other side, operational effectiveness is just executing similar activities from competitors in an improved but not different way. Therefore, the competitive benefit gained from operational performance is easily imitable because the rivals may also adopt the same or better methods to create the same or a better advantage. But, in case of strategic positioning, opponents cannot imitate because the corporation adopting strategic positioning is entirely different from rivals and a competition has to replicate the whole activity systems to imitate that competitive edge which is almost impossible because the own tactical positioning of that particular competition would be lost after accomplishing this. Japanese companies were popular for best-practices and Total Quality Management. Their global competitiveness was based on operational success in the 1970s and 1980s. Within the race of operational effectiveness, japan companies could not develop strategic placement and dropped under the capture of competitive convergence. The concentration of Japanese corporations was to imitate competitors and merely to perform better. Japanese appreciated success because the globe economies were growing. But when the marketplaces became saturated; japan firms were stuck in their own traps and finally rubbed out of markets. (Michael Porter, 1996)
Week 10 (Reflective Writing)
Customers are the main assets for an organization. Marketing is all about discovering customer needs and desires and gratifying those needs and needs for a earnings. In simple words, marketing is focused on creating value, delivering it to customers (customer value) and recording a part of it by means of profits. All companies have to successfully design their marketing mixes (Product, Price, Place and advertising) for attaining a competitive benefit in the marketplace. I wanted to discover that how customer value could be produced and delivered to customers in this week. It is also important to note that customer value is the determinant of company income and shareholders' value. The bigger customer value causes more revenue for the business and more value for the shareholders (financial purpose of the firm).
After this week, I learnt (1) market segmentation as dividing customers with different needs into small groups of customers with similar needs for concentrating on them efficiently to deliver value and shoot a part of value, (2) the bases for segmentation were needs based, demographic, psychographic and geographic depending on the company's marketing concentration, (3) different market segmentation strategies like Undifferentiated, Concentrated, Differentiated and Custom Marketing for providing customer value and (4) Setting as what customers' perceives as advantages and disadvantages of our service or product. I would like to read the booklet of Roger J. Best "Market Founded Management - Approaches for growing customer value and success" to increase my knowledge.
I read different chapters from "Market Structured Management" by Roger J. Best (2008) and learnt that brand setting played the most significant role in delivering superior customer value. Furthermore, Strong customer target and strong competition focus enables the companies to provide superior value to customers. Enhancing customer experience can also increase customer value. Efficient marketing and sales communications are essential for delivering customer value.
Week 11 (Reflective Writing)
Every performance and objective needs emphasis. It really is sometimes easy to devise a online marketing strategy but it's very difficult to control a online marketing strategy. I needed to learn different methods and frameworks that may be used to analyze and identify the marketing strategy for perform successfully available on the market to delivering superior value to the customers. It is important to note that only those companies win the battle of competition who deliver superior value to customers in accordance with the competition. I needed to learn the methodology to evaluate and measure the performance of brands and marketing work to provide superior value to customers in accordance with challengers. I also discovered some difficulties in conducting such analysis.
I comprehended different tools and mechanisms to analyze the marketing performance that professionals adopted to deliver superior value to customers. Identifying market elegance and market potential is important for providing value to customers. I learnt different methods that may be used to measure the performance and value of brands. One of the most important standards was to gauge the brand equity. When a brand has strong brand collateral then it is meant to deliver an excellent value to customers in the marketplace in accordance with competition. I could evaluate the constituent elements used within the marketing performance. Also I learnt to examine the contribution of performance research for management in strong organizational environments. I am going to increase my knowledge by learning the book "Market Established Management" which is mentioned in the last week.
Brands do have property and liabilities like organizations and organizations and a brand's collateral is estimated in the same way, by deducting liabilities from possessions. A few examples of brand property are emotional connection with customers, brand commitment, product line extensions, and price monthly premiums. Although some liabilities of brand are customer dissatisfaction, questionable methods, poor record on public issues, and negative organizations. Therefore, brand equity can be approximated as: Brand Equity = Brand Possessions - Brand Liabilities (Best R. J. , 2008).
disadvantages of situation planning. I learnt how to create scenarios. I'd like to increase my understanding by different articles and literature.
IKEA - Global Organizational Environment
The name IKEA is an acronym for the initials of Ingvar Kamprad who is the ex - of IKEA, his farm Elmtaryd, and his country, Agunnaryd, in Smaland, South Sweden. It really is interesting to note that Ingvar Kamprad started out his career as an entrepreneur just in the age of 17 years. His original business was advertising fish, Christmas mags and seed products. Then, in few years, he started selling diverse products such as ballpoint pens and furniture and employed a mail order business to sell the products. Then, he analyzed the business enterprise environment and chose that furniture business acquired the greatest potential and it was a great opportunity to start a furniture business. (Christopher A. Barlett, 1996)
Dramatically, Swedish overall economy enjoyed a post war increase and the tendency for traditional Swedish practice of managing down customer-made furniture was replaced by young homeowners demand for new but inexpensive furniture. But different suppliers and manufacturers exploited this opportunity with a wrong emphasis by increasing the prices of furniture because these suppliers and manufacturers acquired the weak research of business environment. Because of this, furniture prices increased to 41%. But IKEA's creator recognized this opportunity as a profitable opportunity and a social problem. IKEA capitalized this opportunity by offering standard furniture with least expensive prices in accordance with competition. The basic purpose of describing the above fact is to justify that successful environmental analysis always lead to effective and reliable decisions. (Christopher A. Barlett, 1996)
The new strategy of the company was criticized by different competitors and they began using different practices to generate problems for IKEA and its own social purpose. When Kamprad's company started taking part in the gross annual trade good of Stockholm, different competition complained that IKEA was only retailing imitations. Therefore, scheduled to negative associations and misconceptions spread by rivals, IKEA was lawfully restricted from advertising at the trade fairs. But it analyzed the business environment and started out taking orders rather than selling direct to customers at fairs. Then, again, IKEA was lawfully restricted to show prices on furniture because the original suppliers, manufacturers and suppliers experienced turn into a mafia or lobby plus they influenced the federal government body to enforce such kind of restrictions on IKEA. The above conflict did not stop here but instead the mafia limited different suppliers to market IKEA. But IKEA succeeded by an efficient environmental scan and reorganized its sourcing strategy by establishing new resources in Poland. It's important to note that after rescanning the surroundings and devising its sourcing strategy, the price tag on IKEA fell more and it experienced that it might charge even low prices. The essential purpose of explaining the above mentioned facts is to reveal that the leadership of IKEA was focused on the effective and productive environmental analysis which is the main reason for the success of IKEA today. (Christopher A. Barlett, 1996)
IKEA opened up its first store in 1958. But scheduled to competitive pressures and environmental analysis, it decided to relocate or even to operate internationally for attaining a sustainable competitive advantage in the marketplace. Therefore, it exposed its stores in Norway in 1963 and Switzerland in 1973. IKEA experienced total 316 stores this year 2010. (IKEA Formal Website, No Time)
Type of Organization
It is an interesting reality the IKEA is a privately had organization and its own shares aren't publicly traded. Privately held organizations have a great deal of advantages and disadvantages. For example, privately owned businesses are better because these kinds of businesses are serving the niche marketplaces and their earnings are sometimes even more than the publicly traded large organizations. There are different reasons for which the world has become obsessed with private ownership. Additionally it is a general notion that anticipated to free market competition, goods and services are definitely more efficiently provided by private market factors than the general public limited companies. Therefore, privatization drives towards better quality, lower prices, less corruption and more efficient market gain access to/ delivery of goods and services. Privatization escalates the performance as the publicly managed corporations are usually more bureaucratic. While in privately possessed organizations, there is a determination for objective and goal achievements which increases the performance. Privatization escalates the efficiency of the organizations and economy too. Privately possessed organizations have a tendency to perform efficiently anticipated to market competitive and survival pressures. Privately owned organizations are more concentrated and these organizations produce goods and services to meet the diverse needs of individuals. There are chances of corruption in public corporations because of the political reasons. On the other hand, there are less likelihood of corruption in private organizations. (Alberto Chong, 2003)
The main target of discussing the aforementioned things was to expose that being truly a privately owned company is a competitive edge for IKEA and it is performing effectively and effectively in the marketplace much better than its rivals. It have all the advantages which a privately owned or operated organization own in industry and more importantly it has capitalized those advantages successfully by analyzing the business and industrial environment to meet the diverse needs of customers in the marketplace. All of the above opportunities, which privately held organizations have, are best availed only through effective environmental research of business and industry which is performed efficiently by IKEA and it includes sustained a competitive benefits in the marketplace. It is more profitable since it is serving a niche market of Youngsters by offering standard lightweight furniture goods at the lowest possible prices which is a sustainable competitive advantage for IKEA being truly a privately owned company. (Christopher A. Barlett, 1996)
Another important feature for IKEA is that it is operating in the various global market segments of the world through franchising. It functions by granting protection under the law to local franchisees within their certain territories and locations. It is an important marketing route and supply chain management strategy of IKEA. It saves heavy cost burdens of globalization or international supply. The main target of IKEA is on cost benefit and its own all activity systems are synchronized or interconnected in such a way that all the actions of IKEA are centered to reduce overall costs by offering low prices to focus on customers. For instance, franchising, sourcing strategy in the form of exclusive suppliers of raw materials, cost friendly store buildings, no sales persons on board, standardized furniture are examples of focusing on cost benefit. (Christopher A. Barlett, 1996)
Organizations adopt vision from leadership and organizational idea. Leadership eyesight becomes the perspective of organizations and it further offers rise to the culture and composition of the business. If we understand the control eye-sight of IKEA than it originates from Ingvar Kamprad. He was a simple man and he was a public responsible man. He had a perspective of offering the un-served folks of society. For example, when the furniture manufacturers increased their prices, Ingvar Kamprad reduced prices by centering it as a interpersonal problem. When Ingvar Kamprad travelled to different countries for business, then he used to resided is cheap hotels, travelled by bus somewhat than plane and its main target was to reduce all the cost as it could. In a nutshell Ingvar Kamprad was a socially responsible man with cost reduction focus to offer goods to final customers at low prices with two perspectives: competitive border and solution to solve social problem (everyone could purchase furniture). He also unveiled an 11-web page document "Testament of the furniture seller" as a code of carry out (Christopher A. Barlett, 1996). Predicated on his vision, corporation philosophy of cost leadership in IKEA developed and it focused and designed all of its activity systems to reduce costs to serve the needs of customers at low prices and largely targeted un-served market segments with a communal cause (Young people - un-served portion). This organizational idea became the eye-sight of IKEA as "To create better everyday activity for the individuals". (Christopher A. Barlett, 1996)
Scope of the organization
As we have discussed above that IKEA was established in Sweden and then it widened to other parts of Europe and finally it expanded to various areas of the earth such as North America, Midsection East, Asia Pacific and Carribean. The globalization strategy was for being globally competitive by portion customers diverse needs internationally and by beating the competition by increasing a lasting competitive gain (cost) in the marketplace. Therefore, the range of the business was initially at the national level (Sweden), then to the regional level (European countries) and finally it became global or international.
If we study the recruiting strategy of IKEA, then it always employ the service of young pros. Culture of the business is based on overall cost decrease to provide low prices to focus on customers. Young professionals or it isn't incorrect if we say "young blood vessels" is more ground breaking than the old mates. Young specialists develop innovative guidelines to reduce costs and meet diverse and unmet needs of customers efficiently. This culture is developed from IKEA's organizational philosophy and management (Ingvar Kamprad). Ingvar Kamprad himself started out entrepreneurship in early age and his beliefs provided foundations for IKEA to get a lasting competitive advantage in the marketplace. Ingvar Kamprad always preferred young experts and young blood vessels brought innovation and the same thing is currently a source of sustainable competitive advantages for IKEA. (Christopher A. Barlett, 1996)
There are two different varieties of diversification: product diversification and market diversification. IKEA focused more on market diversification by being a global firm and the objective of diversification was to get a sustainable competitive advantage by efficiently using the core competency of IKEA (cost advantages). For instance, IKEA has developed several In house manufacturing facilities to lessen costs. It mainly buys from non-traditional suppliers to decrease costs. All the activity systems of IKEA are strategically aligned with one another to lessen overall costs as we've talked about above. (Christopher A. Barlett, 1996)
Organization Analysis
If we evaluate the organization IKEA in terms of its performance and success account then it could be easily figured it is accomplishing much better than its rivals by "performing similar activities in various ways" from the rivals which was strategic positioning according to Michael Porter (1996). Michael Porter argued that organizations need to "perform different activities from rivals or similar activities in different ways" to get a sustainable competitive edge.
IKEA is "performing similar activities in different ways" from its rivals by adopting all the three levels of fitness (Simple Consistency, reinforcement and optimization) among its activity systems and therefore the current competitive advantage (which is the cost gain) is not imitable by competition. All the activity systems (recruitment, sourcing, route strategy and development) are synchronized with each other based on the leadership eye-sight and organizational idea (being low priced, low price, solution oriented and socially accountable) to aid the strategy of cost edge and innovation. A competitor of IKEA cannot copy it because it had to duplicate the complete activity systems of IKEA which is impossible. Therefore the competitive good thing about IKEA is not imitable.
By adopting the above mentioned unique strategy, the email address details are remarkable for IKEA and they have enjoyed different achievements. IKEA is the 28th most valuable brand at the global level. Its turnover is continuing to grow to EUR 22, 713 million. They have 7% of global sales in UK. In the third quarter of 2009, total sales increased by 1. 1% EUR 1. 2 billion. Its estimated market talk about is 5. 4 percent. Its third quarter market share in 2008 was 6. 1 percent. It's the second most significant furniture dealer in UK. It is important to note that all the above successes were because of "Strategic Positioning" (cost advantages) and "Environmental Analysis" (Getting together with unmet customer needs and globalization). (Verdict Consulting, 2010)
Political, Economic, Community, Technological, Environmental and Legal (PESTEL) Analysis
Political
Different global political and national fads are experienced by IKEA and it has shown flexibility proficiently to survive in different parts of the world globally. As we have reviewed that how different opponents (and mafia) attempted to rub out IKEA from Swedish market but IKEA played out smartly and survived that intense political effect by globalization and flexibility. It was actually anticipated to effective market sensing of IKEA. IKEA were able to developed and deal with itself among different politics conditions of Europe.
Economic
IKEA strategy is versatile with the monetary conditions. As European market is under recession and consumer behavior has altered now. People are more quality mindful than before in European countries and other areas of the world. Examining this global business environment, we could say that offering low priced standard products will be the best strategy in this economic recession across the world. IKEA has recently followed its strategy and it spent some time working to gain cost benefits to offer inexpensive standardized furniture products effectively to customers in a "DO-IT-YOURSELF" format. It is actually effective environmental sensing and environmental evaluation by IKEA.
Social
IKEA has contributed a great deal in social responsibility. It was the vision from the authority. It has a eye-sight of offering low prices to really help those people that has low income and could not find the money for expensive furniture. It also offers different advantages to its employees by means of payment and insurance. Offering low prices was the vision of Ingvar Kamprad and he looked at it as a public service. All of the activity systems of IKEA are in reality designed to support this reason behind Ingvar Kamprad (such as cost gain to offer low price).
Technological
IKEA implemented the latest technology and capitalized scientific opportunities throughout the world. It has employed technology for shorter queues, proper scheduling, traffic monitoring and trading habits. They have optimized its resource chain with technology to meet up with the customer needs proficiently.
Legal
No company could operate without legal responsibilities and obedience. IKEA always respected the legal systems of various areas of world and it never employed in lobbying or mafia activities. For instance, in Sweden, rather than resisting the law, it admitted regulations even it was influenced by the competition. It is grounds for IKEA's success.
Environmental
As significantly as environmental issues are concerned, IKEA always made furniture that is environmental friendly. Its creation processes, misuse management and safety measures are efficiently designed to fulfill environmental concerns.
Key Stakeholders
The key stakeholders in conditions of stake and electric power could be plotted the following:
There are three types of Stakes involved with IKEA which are equity, financial, and influencers and there are three types of ability engaged such as Formal/Voting, Economic and Political. It's important for the firms to satisfy all the stakeholders to execute effectively and effectively for success. When a company fails to meet some stakeholders then it might not make it through in the longer run.
As very good as IKEA is concerned, it satisfies all the key stakeholders and it is one of reasons for its success. IKEA is working globally and it offers different stakeholders across the world. It's important for IKEA to conduct global environmental research to recognize and meet its stakeholders. Sometime, different stakeholders' concerns are dependent on each other. For instance, the basic purpose a business is to increase the wealth of its shareholders and IKEA is providing superior value to its customers relative to competition therefore this delivery of superior value has enabled IKEA to maximize the prosperity of shareholders.
The pursuing diagram shows the stakeholder mapping of IKEA:
In the above diagram, the stakeholders of IKEA are described in terms of ability and interest. In addition, it defines a course of action for each type of stakeholder and IKEA is carrying out well for all of its stakeholders. For example, it has managed its customers directly by offering standardized furniture products at low costs. It keeps its suppliers satisfied and handles them closely because of its organizational strategy.
Perception Map and Market position of IKEA
The pursuing diagram shows the notion map of customers about IKEA, its market position and its different competitors in the marketplace:
It is obvious that IKEA offers inexpensive standardized furniture products to different focus on segments and for that reason IKEA is positioned in the low cost and low design market position in line with the perceptions of the consumers. It's the desired strategic positioning for IKEA as it wished to gain the forex market position in the imagination of consumers for getting a sustainable competitive advantage in the marketplace. Therefore, IKEA is prosperous in his strategy and its own competitive edge is not imitable.
Market Segmentation
It can be argued from the above dialogue that IKEA has segmented the marketplace and targeted customers with reasonably priced and standardized furniture products. The prospective market of IKEA is young people which are newly maried people, have low incomes and purchasing ability and who are furnishing their home for the first time. All of the products and services of IKEA were created according to the marketplace and they have positioned itself successfully in the heads of the prospective market as can been seen from the perception map. (Christopher A. Barlett, 1996)
External Factor Analysis
Opportunities
Due to global economic recession and current financial climate, there is an increased demand of inexpensive products. IKEA has already been exploiting this opportunity effectively.
There is a consumer pattern of using environmental friendly products and IKEA can be already capitalizing this opportunity.
Online purchasing habit of consumers is increasing. It really is a penetration opportunities for IKEA in online marketing.
Threats
Competitors have managed to imitate some cost benefits of IKEA (they cannot copy the complete activity systems)
Competitors are exploiting the online selling opportunities.
Markets tend to be fragmented now (low price and high quality demand).
First time customers hesitate to enter in the housing marketplace.
Conclusion
In this paper, reflective writing for your span of global firm environment and the situation of IKEA was talked about. It was a great learning opportunity which course will help me to gain more out of less at the professional level.
The IKEA tactical positioning is talked about by examining its global environment. It could be figured IKEA has the sustainable competitive gain and its competitive advantage is not imitable by competition because of its strategic setting and useful environmental scanning and research. Its competitive advantage is not imitable in any scenario because of its global organizational environment research and central competencies.
