Ikea Strategic in Action Essay

Part strategical position and strategic choice which mention above ar underlining company milieu, capability, and its outline. Strategy in action result consider on how strategy act in organisation (Johnson et al., 2011a).This part of report will label them considering their suitableness. Evaluation IKEA strategies regards ablenessSuitability refers to the strategy is used to evaluate whether the strategies address the key opportunities and constraints underlined by the organisations strategic position (Johnson et al., 2008). This criterion can be examined by checking the strategic options a ingestst the environment, capabilities and the stakeholder expectations. Therefore, the analysing of PESTEL, Five Forces and strategic capabilities of IKEA in section above will be helpful for evaluating and understanding suitability. It appears that suitability is used to evaluate whether overall rationale of strategy is competent in terms of environment and capabilities and stakeho lder expectations or not. Therefore, this part of report not only evaluates IKEA strategies and capabilities regard in suitability but its successes and difficulties will be analysed.Firstly, from PESTEL analysis, IKEA takes advantage from hybrid and price leadership strategy to response to its environment. IKEAs harvest-homes atomic number 18 cheap and distinguish these ar good opportunities to survive in economic recession. Additionally, IKEAs shopping center customers (middle class with moderate disposable income) are affordable to buy products hitherto if in economic recession. Moreover, IKEA capabilities are strong global cross off and impoverished hail products with flat packaging which is its core resource and competence. Combining its capabilities and its strategies will realise IKEA to achieve in environment changed and competitive circumstance. However, the difficulty is round import issue. All IKEA normally sources products from the corresponding places in r egulate to restrain it standard. However, in some countries the import taxes are rattling high. For example in mainland China, the import taxes on products from Poland to China are up to 22% (Burt el al., 2011).However, to stand its funky price strategy and survive in China securities industry, IKEA overcome this difficulty by sourcing goods from local country to burn cost of taxation (Burt el al., 2011). In overall, it can be seen that in these deal and environmental change, the strategies IKEA has been used is a good opportunities to overcome those threats and suitable in its environment. Secondly, from Five Forces analysis, IKEA strategies and its capabilities can go along with external environment very well. It is normal that buyers are looking for cheap products but high quality. IKEA strategies are support customer needs. Furthermore, IKEA unique resources such as strong brand combining with its hybrid strategy will maintain existing customers and gain more rude(a) buye rs. In a term of power of supplier, IKEAs strategies are suitable to supplier expectations. To generate low cost products, IKEA has to reduce cost of sale per unit by purchasing a heroic volume of materials from supplier. As well as suppliers, they also want to rat their products as much as possible.Moreover, considering in threat of new entry, IKEA strategies and capabilities are difficult for new entrants to compete. These are the reasons why IKEA takes opportunity from its strategies and capabilities among these threats. In addition, in the rivalry situation, it can be assumed that whether other companies offer low cost products but its quality, design, and brand range may not be the same as IKEA. IKEA considers in quality as well as the price. However, in high competitive markets, IKEA may face difficulties. For example in China which local products are normally cheap, IKEA low price strategy may not attract to this market. Giving a suggestion, in order to offer only low cost products, IKEA should build brand image as a high quality brand and offer Swedish-designed product which unalikeiate in Chinese customer perception.In overall, it appears that IKEA capabilities and its strategies are suitable to compete in the rivalry situation. IKEA generates its strengths and overcome the weaknesses in a suitable way. Thirdly, evaluation of suitability of IKEA strategies and capabilities according to Ansoff analysis of 4 possible using directions will be examined. The suitability will be evaluated whether these options will accord to future scenario. The future scenario which matches in a term of economical environment is predicted that the world economy will maintain very weak in 2013 and slightly decrease between 2014 and 2016 (The Guardian, 2012). Apart from evaluation the suitability of IKEA strategies and capability, the suitability will be used to assessment whether IKEA strategic options meet the stakeholder expectations (Johnson et al., 2008). accede 5 Evaluation of suitability Direction of growthIn overall, IKEA strategies and capabilities are suitable in the environment and meet the expectation of stakeholders. Market perceptivity may be the most appropriate direction that IKEA should carry on at the present time to the future scenario predicted. There is no major(ip) investment needed. The IKEA current strategies and its capabilities is now effective under this circumstance. However, there is a difficulty in IKEAs strategies. IKEA is a global company which generates same strategies almost every market called one-size-fit-all approach (Stern, 2012). Although, one-size-fit-all approach will benefit IKEA to control it global strategies easily, the difficulty will occur. The problem is every market is all difference. The one-size-fits-all approach on all IKEA staff and customers is good to consider the same value but for all market is not suitable.The different markets have different circumstance. For example, according to Ande rs Dahlvig cited in Stern (2012), the differences between countries were bully in China and Sweden. China is different territory. Chinese labour policies are poor for IKEA co-worker vision. Chinese workforce depends on the authority of the boss which is difficult to adapt to the more free and easy way of the new employer (Stern, 2012). Moreover, in the future, if IKEA wants to expand their market and make the differentiation, the policy and restriction in some countries may be serious such as in Islamic countries, and the differentiation needs lots of investment and knowledge. IKEA should consider how to squelch the low price while a lot of investment is needed.