QuestionHow do I propose a new business strategy for Ikea?
AnswerTo generate and propose a new business strategy for Ikea there are a number of steps that you would need to follow. First, you would need to analyse the business environment (internal and external) of Ikea. For external business environment analysis, tools such as PESTLE, Porter’s 5 Forces, Customer Analysis and Competitor Analysis should be used. For internal business environment analysis tools such as Portfolio Analysis should be used along with an analysis of Ikea’s core competencies; this can be done by using frameworks such as VRIO or VRIN. The external and internal analysis can then be combined together to create a SWOT analysis. This analysis allows you to understand what the current operating environment is for Ikea in terms of opportunities and threats and also their internal strengths and weaknesses. This is important as you will need to make sure that your strategy is suitable to be used in the current business environment for Ikea. After the analysis of the business environment you need to then use models/tools to generate potential strategic options that could be used by Ikea. The most common tools that are used to generate strategic options are the Ansoff Matrix and Porter’s Generic Strategies. Generating three potential strategies is, typically, what you should aim for. Then, after you have generated your potential strategies you need to analyse the strategies to see if they are suitable and feasible to be implemented by Ikea. The most common tool used to do this is the SAFe criteria. This is criteria is used to analyse the suitability, acceptability and feasibility of a proposed strategy. All of your proposed strategies should be analysed using these criteria and then after you have done such analysis you should then find out which is the best business strategy to propose to Ikea (Johnson, et al., 2013).
ReferencesJohnson, G., Whittington, R., Scholes, K., Angwin, D., and Regnér, P. (2013) Exploring Strategy Text & Cases. 10th Edition. Cambridge: Pearson
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