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IKEA has continuously ensured that it mets her corporate social responsibilty all the time. This was affirmed after the realization The reseacher approached the topic in a broader perspective, by establishing the business environment in which IKEA is found. She estbalished the external competitive analysis of IKEA; Furniture declined by 3% in 2011, there was an increase in market share among the top companies in the furtniture market. IKEA asses the market evironment by the use of market research, SWOT that it has reduced carbon emission by 30%, it has increased renewable energy for it building. It has also partnered with several charity organizations like save the children to improve the leaving standards of people. It has also ensured it's products from recycled materials.
The reseacher establish that business environment is very important to any entity that does business. They are several are several techniques of analysing a business enviroment for strategy formulation. This include SWOT analysis, Pestel, Porter's Five Forces analysis etc. All this focuses on problem-solving and decision-making in the business environment.
Many organisations are forced to address many challanges that have risen from runnning their business in dynamic business environment in which they operate in. These changes occur often times and constantltly. Thus any business entity must respond to this ever changing business environment. An organization that fails to recognize and identify the challenges, will run the risk of not being able to respond to the problems adequately and this will evetually affect the performance of the business.
They are many techniques that are used to analyse and examine business environment within which an organisation is operating. These include PESTLE, SWOT analysis and Porter's Five Forces analysis. Most of this techniques are used to examine the external enviroment and as well as the internal. External environment analysis should always be an ongoing process in an oragnization and lead by senior management. The outcome of the analysis will provide a clear picture and an insight of problems affecting the organization and opportunities for successes.
SWOT and ï¬ve forces analysis techinique provides a more detailed situation facing an organisation than using only one technique which may not bring out all the gaps in the knowledge and understanding. MOST Analysis, Boston Box and Resource Audit anaylisis are
used to examine the internal environment. Analysing the internal capability of an organisation provides insights into its areas of strength and the inherent weaknesses within it. Busines internal and external capability is essential to understanding where the core skills of the organisation lie, and to enable relevant courses for action can which will lead to that will improve the performance of the organization. After the usage of the techniques, a business strategy is defined and the factors within and outside organization management control are examined in relation with the oragnization resources to create a competitive advantage. A working strategy for one business cannot be used for another business venture. Thus every business has to create a its own competitive strategy that addresses her uniqueness of products.
Value Chain Analysis is a technique that describes activities undertaken by a business and relates it/them to an analysis of the external environment of a business which highlights competitive strength of the business. Porter suggested that business activities can be grouped into two categories (1) Primary Activities - those that are directly concerned with creating and delivering a product and (2) Support Activities, which were not directly involved in production, may increase effectiveness or efficiency. It is rare for a business to undertake all primary and support activities.
3 Environment is not a mysterious concept but it's basically the surroundings of any organization; it can be summarised as the climate in which organization functions. Much has been written by many authors about business environment and it has led to development of many models. Most of management scientist are constantly coming up with many organizational environments models may be changing in ways that require new modes of thought and analysis.
The theories about organizational environments should serve as guides for environmental analysis activities. Research on organizational environments is divided into five different categories, based upon common disciplinary roots and/or the similarity of their conceptions of the environment. Each of the following is referred to as a 'model', because it offers a relatively distinct representation of the nature of an organizational environment:
Industry structure model
Porter is one of the few industrial economists to address the administrative problem of how organizations should gather information about their environments. He suggests the implementation of a formalized competitor analysis system. A centralized intelligence-gathering system of this kind should facilitate the development of a 'strategic database' that includes the bits and pieces of information which when put together provide competitive insight necessary for strategic decision making in a organization.
Top management's collective understanding of its environment is assumed to be embodied
in a cognitive structure. Several terms are used to reference these structures, including
cause maps, conceptual maps. Cognitive structures consist of interconnected sets of understandings comprised of strong views of one's own interests, concerns, and tasks. These individual or collective understandings essentially ignore conventional distinctions between environmental and organizational factors (Dill, 1962; Barnard, 1938).
organization field model
Different types of conceptualizing environmental structure are put by proponents of what is termed the organization field model. There are several non- hierarchical conceptions of organizational environments. Levine and White (1961) and Williamson (1975) offer an exchange framework, Evan (1966) postulates the concept of an 'organizational-set', Warren (1967) suggests the notion of an 'interorganizational field', and Freeman (1984) proposes a stakeholder framework. Such approach has no explicit assumptions on the structure of organizational environments. It is simply assumed to be comprised of interdependent organizations that can influence organizational goals, objective and resources, and public perceptions of a focal organization. Other models include . ecological and resource dependence model and era model.
The relevant environment is a field of organizations whose actions affect and are affected by a focal organization. Environment change results either from trends and forces beyond the proximate field of organizations or from the changing goal structures of organizations comprising the field. Knowledge of the environment is acquired by designing organization structures and decision processes matched to prevailing environmental contingencies. Ecological and resource dependence model The environment is a system of resources and interconnected organizations.
Environmental change occurs when there is a variation in this system that affects the resources necessary for an organization's survival. Environments lows are largely enacted by organizational subunits which give rise to multiple conceptions of 'the' environment.
Era model The environment is a set of social structures, values, and role definitions characterizing a particular period of time. Technology and experiments by individuals searching for self-fulfillment within the context of prevailing institutions (e.g. family) are primary sources of environmental change.
Change occurs via a three-stage process: existing order-turbulent transition-new order. Via futurists' forecasts and consulting services organizations can gain knowledge of their environments.
Managers in organization often time wonder about the effectiveness of their business strategies and the potential that they have for success in their industry. Without information about the practices of competitors, it is difficult to know just what works and what does not in terms of strategic formulation. The impact of marketing strategy as a tool that provides firms with access to information is very important. It is therefore, important that organization leaders know exactly how the mix can benefit their organizations.
A business idea usually arises by creating a product or service for filling an existing need or want in the market. Every business must have a comprehensive strategy. Many business need to do a market survey before starting any business venture, few business are the same, so as marketing strategy. A strategy that works for one business may not work for another venture. Thus every business has to create a business strategy that addresses the uniqueness of the product and service.
In a strategy, many times it lets you to be able to create tactics better than your competition. Through this, it helps you be able to create an innovative technique that gives you a competitive edge over your competitors.
6. Importance of Business environmental analysis and types of techniques, importance of corporate social responsibility is absolute important in a kids up bringing.
A close and continuous and interaction between the business and the environment is evident. This interaction ensures the business is strengthened. The environment is multifaceted, complex, and dynamic in nature and has a far-reaching impact on the survival and growth of the business. To be more specific, proper understanding of the social, political, legal and economic environment helps the business in the following way/
(a) Determining Opportunities and Threats:
(b) Growth: The environment leads to opening up new frontiers of growth for the business firms. It enables the business to identify the areas for growth and expansion of their activities.
(c) Continuous Learning: Environmental analysis makes the task of managers easier in
dealing with business challenges. The managers are motivated to continuously update
their knowledge, understanding and skills to meet the predicted changes in realm of
(d) Image Building: Environmental understanding helps the business organizations in
improving their image by showing their sensitivity to the environment within which they are working. For example, in view of the shortage of power, many companies have
set up Captive Power Plants (CPP) in their factories to meet their own requirement of power.
(e) Meeting Competition: It helps competitors' strategies and formulates business strategies accordingly and which are success in every venture they take.
(f) Identifying Firm's Strength and Weakness: Business environment include asserting closer ways.
7. Techniques learnt included SWOT and PESTEL
The group assignment was a success because there was full participation from all members. As a group we were surprised of how working together as a team can make work deemed to be very difficult be easy. I personally learnt through working in the group that an organization cannot succeed if her human resource is dysfunctional and is not working as a team. Team work is very very important.
My Individual work has contributed to the group work significantly. I identified the strength of IKEA which was physical evidence which include many outlets, weakness which include the people, Opportunity which include more product portfolio, threats which include competition. Others includes IKEA CSR ; IKEA has continuously ensured that it mets her corporate social responsibilty all the time. This was affirmed after the realization that it has reduced carbon emission by 30%, it has increased renewable energy for it building