Strategic Management for IKEA Malaysia

Strategic Management for IKEA Malaysia

Company Background (IKEA, Malaysia)

IKEA is one of the most popular global companies, dealing in home furnishings. The company was founded in the year 1943 by Ingvar Kamprad in Sweden, and is the largest retailer of ready-to-assemble furniture in the world today. IKEA is privately owned, and is rated as one of the best organizations to work for because of its culture (Armitstead 2010).

IKEA's greatest strength has been its ability to deliver value to the customer at low-prices. This has helped the company achieve a significant competitive advantage in the international market (www.ikea.com)

Performance History

As mentioned earlier, IKEA is the largest retailer of ready-to-assemble home furnishing products and accessories in the world. It serves one of the biggest clientele for any private firm in the world with over 400 million customers. IKEA's sales figures too are the highest in its respective industry. IKEA has, over the years, pursued a strategy that attempts to offer value to the customer through quality, speed, dependability and flexibility. This has greatly benefitted the company for achieving high performance targets (Stranieri 2008).

Strategic Management

Despite its success and ranking as one of the best furniture retailers in the world, IKEA still has opportunities and market niches to explore to strengthen its strategic position. This section seeks to determine the possible approach and strategies, which the company can use to expand its business in Malaysia.

Value chain analysis

The importance of the value chain analysis is extremely beneficial for the company to operate effectively and efficiently. The purpose of the organization is to create value for customers. The operations of the company are divided in different segments and a detailed analysis can provide with sound value chain system. The value chain system of IKEA has dived in different segments which are as under

Differentiation between primary and secondary operations

Allocation of cost to each activity

Identification of the critical activities to the customer

The value chain system analysis of the company is a comprehensive, strategic management tool for the company to enhance and improve the performance of the company.

SWOT Analysis

This report analyses the current position of IKEA, through the use of various marketing tools. The SWOT analysis of the company is conducted to identify the various internal elements and factors that IKEA has to work with while doing business.

Strengths

IKEA is one of the leaders in the household furniture's manufacture in the international arena. Its greatest strength is its profit generation that surpasses many of its competitors. IKEA is renowned for providing quality products and services throughout the industry. As a global brand, IKEA has a wide product range of 10,000 items and extensive customer coverage with 244 stores (Lancaster & Massingham 2003).

IKEA has developed profitable relationships with its stakeholders over the years, especially its suppliers. This enables the company to get high-quality inputs at low prices. Strength for IKEA is effective distribution of its products globally. Also, its willingness to diversify, highlighted by the launching of its own food products chain, is ...