This PP includes some of the strategic management plan of IKEA, it is part of the strategic management course project.

1. IKEA Strategic Management Project
Part 1
MGT427 – Spring 2019
College of Business
Effat University, Jeddah.
Done By:
Rawan Nadeem
Walaa Barayan
Omniah Qurun
Yusra Al Krait
Waad Al Sobhi
Relam Al Qarni

2. Outline
 Mission, Objective, and Business Strategy
 External Environmental Analysis
 Internal Environmental Analysis
 SWOT Analysis

3. Mission
Objective
Strategy
 Current Mission:
To create a better everyday life for the many people
 Current 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
 Business strategy:
Our business idea supports this vision by offering 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.

4. External
Environmental
Analysis
 Market size:
The market size of IKEA is huge as it has more than 424 stores in more
than 50 countries and also the management has planned for more than
20 countries in future.
 The Growth
IKEA is around 3.1 % averages and every year it is increasing.The store
has been maintaining this growth rate since 2012-2013 fiscal years.
 Market Share:
The total value of the brand is more than 29 billion dollars and it has
become the top 5 companies in Europe andAmerica in terms of market
share. The annual revenue of the company is around 38.8 billion dollars.

6. External
Environmental
Analysis
(Cont.)
 Changeability:
IKEA has managed to diversify its product line from luxury
items to low cost and small products that is affordable to
everyone.
 Predictability:
IKEA has predictable product quality that is assured by the
trust of its users.
 Green Strategy:
IKEA has planned to use only recycle material for their
products.

7. External
Environmental
Analysis
(Cont.)
Political Economical
The political conflict between countries is
affecting the market share and trade of
brand
Brexit may affect the brand on a huge
scale
The factories and stores in emerging
countries are generating more revenue
Social Technological
Training local youth in the countries
Providing more jobs for refugees
Providing better user services through
data analytics
UsingVR technology for better
experience.
Environmental Legal
Focusing on Social responsibility
Spending on renewable energy
Facing legal actions in countries
Many barriers and paper work in countries

8. External
Environmental
Analysis
(Cont.)
 KFS inThe Industry:
1. The IKEA wide product range targeting wide range of age
groups
2. The only luxury home furnishing brand
3. Low price product range also available
4. Products with different functionalities only available in IKEA
5. Same day delivery
6. Convenient shopping
7. The right quality as customer demands

9. External
Environmental
Analysis
(Cont.)
 Analysis of The Competition:
WALMART is one of the biggest rivals of IKEA as it produces same
products with similar demography as target.The only problem is the
reach of their stores and prices that are higher as compare to IKEA.
But still IKEA is on top due to different designs and pricing.
 Customer’s DemandAnalysis:
IKEA has segmented their market on the income, geographic,
product-usage, and brand-user bases. As its target market are place at
middle-lower and lower class.
Vs.

10. External
Environmental
Analysis (Cont.)
 Strategic Links:
oIKEA has government links as networks all over the world as it
mostly enters in agreement with the governments to assure
them about the production of their products and low level of
pollution.
oRecently IKEA opens up its first every store in India after brief
consultations with government teams over infrastructure.The
company always maintain strong presence in any country with
the help of their links and brand image.

11. Internal
Environmental
Analysis
 IKEA Structure:

12. Internal
Environmental
Analysis
(Cont.)
 IKEA Culture:
Swedish roots coming from a small town in southern Sweden. People living there
are hard-working, generous, help everyone and live in a close contact with nature
around.These aspects are translated into IKEA values which form the basics of
IKEA culture.
 Main Strength:
o Lower cost manufacturing due to factories in developing countries.
o Takes care of the customers and builds as they want to buy.
o IKEA Policy is flexible and simple
 Main InternalWeakness & Improvement Plan:
o IKEA is standalone stores; they do not share their product on other stores.
o The company is improving its store reach by planning more stores in coming
decade.

13. SWOT
Strength Weakness
• Brand reputation
• Low cost
• Vast numbers of stores in world
• Strong market share and growth
• Stores located away from cities and
towns
• More time to deliver product in
towns
• Product durability problems in some
parts of the world
Opportunity Threat
• Expanding in emerging countries
• Exploring raw material in emerging
countries
• E-commerce threat
• Prices and products of rivals