IKEA's Present Performance - Case Study Example

Accessing new ventures is challenging and demand creative management (Parker 2005). Additionally, enrolling in the global market meant building IKEA’s stability when trading as a block within the European Union. As such, distributing company’s activities is tantamount to distributing risks. With the global market, the company enjoys stability because its income does not come from a single avenue. Globalization also gives IKEA an opportunity to enhance their creativity by coming up with stylish goods for the foreign market.

The company can source returns from other regions when one part faces economic challenges (Hill 2006). Lastly, they have increased bargaining power in the market by working in liaison with other related industries within the EU trading block. However, regionalism poses considerable risks to IKEA since it demands massive investment. In the global world, IKEA will face competition and the operational cost is high. For instance, regionalism may demand the adoption of excellent technology that is expensive.

These factors pose great risks to IKEA establishment since large investments mean high risks (Rao 2001). Additionally, Regionalism poses risks that are associated with unviable investments. With stiff competition in the global market, running an extensive business is challenging since market dynamics may shift in favor of a competitor. Indeed, the collapse of stores may pose considerable losses to IKEA. Moreover, modernization will lead to the alteration of IKEA’s business philosophy when transacting within the foreign markets.

Legal restrictions also brought about by the activities of integration will pose a challenge to the growth of modern industries.Managerial implications of national differences and determinants of the level of economic development in IKEA National differences challenge the operation of the IKEA. As such, failing to establish harmonized national values would be detrimental to the IKEA’s management. Initially, differences delay decision-making; thus, damaging operations because some situations require urgent actions.

Therefore, differences among the stakeholders are advantageous to the competitors. Furthermore, competitors may center on IKEA’s rivalry to exploit the company (RAO2001). Additionally, continued rivalry may lead to the division of the company; thus, depriving IKEA of its competitive powers. Interestingly, differences in establishing the determinants of the level of growth lead to the adoption of compromised decisions. Some stakeholders may embrace the decisions while others may rebel. Indeed, this situation challenges the implementation process.

RecommendationsFirstly, IKEA needs to execute frequent market analysis to ensure that the company holds the real picture of the market trend at any specific time. Additionally, IKEA should focus on dynamism as a central strategy for maintaining its market. Furthermore, changing its operations in congruence with the customer’s taste is essential. Therefore, IKEA need not be resistance to rational forces that demands modification or restructuring of the Company’s activities.