Strategic Issues and Challenges

Strategic Issues and Challenges



Strategic Issues and Challenges

Introduction

The strategic capability of the organisation represents the competences and resources. When a strategist gauges the strategic capability, he is considering the weaknesses and strengths of the organisation. In addition to monitoring an organisation's strategic capability and the overall environment, strategic managers must also take into account the impact of expectations on the purposes, values, goals and missions of an organisation. These expectations primarily lie with the various stakeholders related to the organisation. Strategic planning is long-term planning that takes into account the internal and external variables and identifies sectors and market segments and targeted method of competition. Strategic planning is the process of rolling is updated every year to study the external and internal developments. Planning of activities is the most important function of management. Lately, IKEA has extended its operations to far eastern regions of Asia and Africa. Among the Asian countries, IKEA's market has consdirable potential for Singapore

This paper explores the IKEA's current strategic issues and challenges in a holistic context. A brief account of strategic direction is shown through the organisation's history and business focus. Further, the paper provides the macro and micro environmental forces that have a significant impact on the strategic choices of the company in its Singapore operations. A comprehensive PEST analysis impacting IKEA's Singapore operations is presented to show these environments. The issues faced by the company are discussed using the Porters five forces framework and SWOT analysis. Finally, the paper concludes with the options the company may consider in dealing with its strategic issues and challenges.

The IKEA Group

The IKEA Group is owned by a foundation, Stiching Ingka, based in the Netherlands. The Group's management is in Leiden, Netherlands.  IKEA Group is active in the development, procurement, distribution and sale of its products. IKEA was founded by Ingvar Kamprad in 1943. Since then, IKEA has expanded to include a number of domestic furniture stores worldwide. Today, IKEA is a global company of 110,000 employees working in 42 countries. There are approximately 12,000 articles in the total IKEA product range. Each store holds a selection of these articles in 9500 based on its size. Most of the assortment is same from one country to another. The idea in creating the set is to provide products with a good design feature prices pleasant, almost everyone can afford to buy them. Last year, the department stores of IKEA were visited by 286 million people worldwide. The IKEA catalog was published with the printing of 118 million copies in 45 editions (in 23 languages).

So the business idea of IKEA is to provide a wide range of home furnishings, design and function at prices so low that as many can afford them. IKEA offers products for the home that meet the needs of people in the world. People with needs, tastes, dreams and budgets vary widely

PEST Analysis

The PEST analysis is a strategic tool used to analyze the macro-external environment in which a company operates. PEST factors play an important role in the opportunities for value creation ...