The Process Of Increasing The Connectivity Of Globalization Business Essay

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The process of increasing the connectivity and interdependent of the international markets and business. This process has speeded up dramatically in last two decades as technological advances make it easier for people to travel, communicate and do business internationally. In general, as economies become more connected to other economies, they have increased opportunity but also increased competition. This is the most important driver of the change in today's economy.

Rapid changes are coming on the recent activities of global economy. At this year, it has been showed that the problem at housing market is faced by the UK economy. In recent, now it is considered as the third of the condition of credit crunch. This problem is indicated towards the lacking of credit and liquidity of the IKEA and H&M and these forms of crisis may slowdown the global economy as well. In every time, the customers of the banking business in UK are expected to show advancement or newness of the business cycle but might be this advancement will take more times, ten or more years. Corporate governance is considered as the option as alternative or remedies of facing difficulties of credit crunch. It is impossible to ignore the importance of the principles of the corporate governance. The commercial bank of UK should give priority towards the activities of corporate governance instead of adopting the approach of tighter regulations.

The pace of change has increased dramatically. Business and managers are faced with highly dynamic and ever more complex operating environments. Technologies and products, along with the industries they support and serve, are converging. Pettigrew (1985) went on to argue that changes within an organization take place both in response to business and economic events and to processes of management perception, choice and actions. According to Burnes (2004) change is now an ever- present feature of organizational life, at both an operational and strategic level. Managing change is a multi- disciplinary activity. Those responsible whatever their designation, must possess, or have access to, a wide range of skills, resources, support and knowledge. In relation to make differentiation in between the conditions of UK's commercial banks since some previous years, then it has been showed that from the perspective of size and profitability, the growth of business is increased greatly.

Task 1(b):

Deductive method:

PEST analysis is mainly consisted of the explanation of the political, environmental, social and technological environment and it is related with the deductive method.

Political environment:

IKEA is considered as successful company both in the market of local and as well as international and the company keeps its success in the position of changing global and local trend as well. The company makes its brand globally by combining the flat packaging of do it yourself where Scandinavian style of furniture is adopted by the company.

Economic environment:

Because of the economical change and trend, different forms of strategies are adopted by the company which are related with the achieving the loyalty of the customer. The transfer of ownership was considered as the main strength of H&M. Other style of furniture are adopted by the company such as: dinnerware, lighting and rugs etc. the market performance of the company is affected by the current economic condition which results slowdown of the performance of the company due to strategic direction lacking. For this purpose, key business issues should be considered by the company in relation to the high performance generating.

Social environment:

Great contribution is done by the company on the society where opportunities are provided by the company for the people and as well as the employees in relation to various benefits for example: insurance and pension benefits.

Technological environment:

Appropriate and qualified technologies are adopted by the company in order to shorter queues promotion, tracking proper scheduling, patterns trading and staffing. The preference of employees who are more productive and established is the main aim of the technology. For the purpose of ensuring the staff with right number at the right place on the proper time, proper technologies are used by the company in order to unique pattern of trading matching in IKEA each store.

We know that the core mission of the company is to create a better everyday life for the many people and in relation to this core mission, stability on growth balance is attempted by the company. From the above discussion that is after conducting the PEST analysis on IKEA and H&M, it can be said that the company should balance growth with stability for the purpose of remaining true on its mission because it has been showed that the company is being successful with its existing strategies and the company should keep balance on its business growth.

Inductive method:

In order to enter a new market by a company, it is much needed to transfer the knowledge by the company. In accordance with the requirements of the question 3 here it should be needed to discuss the importance of knowledge transfer.

Competitive advantage of a company is mainly depended on the intangible resource controlling such as: knowledge and the capital as rational. Before entering into a new market, a company should transfer the knowledge in between its transferred employees and as well as its supported companies.

Information about the technology, political environment, social environment and as well as economical environment is needed to be known by the company. In order to shorter queues promotion, tracking proper scheduling, patterns trading and staffing, the company should transfer the knowledge about technological environment, for the purpose of providing insurance and pension benefits to the employees, the company should transfer the knowledge social environemt and as well as also for the purpose of determining the target customers of the company in the new market.

In relation to the economical change and trend, different forms of strategies are adopted by the company which are related with the achieving the loyalty of the customer which is directed towards the knowledge about the economical environement.

The forward, reverse and lateral approach of IKEA and H&M is to share the knowledge in its forays into the countries of Russia, China and Japan. By adopting the approach of knowledge sharing, the barriers of import and the challenges of local infrastructure can be removed.

Knowledge transfer is contributed a significant roles towards the providing support to the international ventures cultural challenges managing. It has been showed that the difficulties can be occurred on new staff hiring and training in the new market and as well as staff turnover is also increased because of this. But if the company share the knowledge about the new market among the existing employees or staff and transfer these employees into new marketing place then the cost of staff hiring and training can be reduced.

Task 2:

The main strength of these companies is strong brand name which is internationally recognized and this brand name attracts the demographic group of customers. In construction sector, unique model of business is used in IKEA and H&M and this model of business is executed under the little competition as directly for the basis of liking. The success of the company is mainly depend on the innovation of the functional products which is done on the basis of the value of customer where in before the company was using the strategy of price architecture. In the areas of key product, the company uses the greater degree of specialist knowledge of the management in relation to the operation of large shed by the company. In relation to the areas of key products, company is considered purchasing and along with the assistance is also required for example: kitchen installation.

The status of IKEA is shifted to global from international by the models of Asia and Eastern European development. There also has the opportunity for the international product of IKEA. Product of high volume with low price is shifted towards the products with mid and higher price in relation to the perspective of demography where the company shows the less dependence on the demographic group of customers. In relation to the IKEA ecommerce site development, associate opportunity is related with the growth achievement and as well as increasing the level of customers. Not only this, IKEA store pressures can be reduced through the transactional capability as additional in the certain level.

Task 3:


The marketing strategy of IKEA is mainly related with the vision, mission, the idea of business and as well as with the statement of market positioning through which a framework can be getting by conducting world wide marketing communication of IKEA. The vision of IKEA is "To create a better everyday life for the many people." The idea of business of IKEA is related with providing a wide range of products which are well designed and as well as the products of functional home furnishing with low prices so that these products can be afforded by so many people.


IKEA is recognized as the Swedish Corporation of home made product where furniture as ready to assemble, appliances and home accessories are selling and designed by the company. As the furniture retailer of world largest, IKEA is now recognized. In the year of 2008, among the countries of 36, there are total 276 stores where 118,000 workers are worked. The number of franchise stores of IKEA is 24 and IKEA Company is owned the 244 stores.


The daily operation of IKEA is mainly related with the providing a wide range of products which are well designed and as well as the products of functional home furnishing with low prices so that these products can be afforded by so many people.

Shared values:

Shared values are the main basis of corporate culture in IKEA. In relation to the corporate culture, the company recruits people not only for filling the vacancies but also want those kinds of people who can share the value of the company. Here, the company also ensure the participation of coworkers and as well support them in order to the identification of the needs, skills and ambition of them. Some examples can be used to explain the shared values of the company such as: togetherness, cost consciousness, respect and simplicity.


In relation to the shared values of the company, it has been showed that the company adopted the participative style of leadership where all employees get equal opportunities to give their opnion and as well as participate on the process of decision making.


Staffs are considered as the core competency of a company. Like this, in the year of 2008, among the countries of 36, there are total 276 stores where 118,000 workers are worked. unique and capable staffs are recruited by the company not only for vacancies filling but as well as sharing the company's value.


The company mainly hires and recruits the peoples who have the skills and abilities as per the requirement of the vacancies. The employees should have the ability to learn, leadership skill, common sense and along with simplicity.

Task 4:

As reviewed the response of question 1, it has been showed that company adopts some strategies for the purpose of developing the international opportunities. These opportunities are: first: customer relationship has been transformed by the company where furniture assembled is teaching to the customers along with costs of manufacturing and distribution is reduced by the company. Second: beside the transformation of customer relationship, the company has also transformed the supplier relationship for the purpose of increasing the productivity, ensuring the raw materials sources, and achieves the standard of quality. By doing this, the cost of manufacturing and supply risk can be reduced. And the third: on the sector of global information system, the investment of IKEA is done. Like as IKEA, other retail companies H&M, Makro, and Carrefour also adopt these three strategies. This is the overall conclusion. These three approaches are very much important for the strategic decision making of the company.