Strategic analysis of IKEA - Essay Example

plistic style matches also the no-frills product lines and customer service ethos and chimes with the company’s origins as a small Swedish family business which started in 1958. In reality, however, the company has a sophisticated approach to its business, and this is built on a suite of interlocking strategies. This paper will consider five of these in turn: Alliances/Agreements, Human Resource Factors, Knowledge Management and Competencies, Cultural and Strategic Fitness, and finally Environment/Sensitivity issues and analyse the appropriateness and effectiveness of each.

IKEA’s phenomenal success in expanding from Europe to America and Asia could not have happened without a network of well-chosen alliances and long term business relationships with suppliers, manufacturers and logistics operators. Planning of supply and demand across the whole operation is done centrally with the aid of computerized APS (advanced planning systems) and this requires advance agreements on volumes and capacities for both IKEA and the different suppliers. (Jonsson et al, 2008, p. 99). The aim of this approach is to make optimal use of resources throughout the whole chain and to minimize stock levels.

Where possible, and when quality control processes are in place at the required level, suppliers are tied into a system of direct delivery to the point of sale. Johnsson et al. identify four main “enablers” for this planning process “planning organisation, data quality, software support and project and change management” (Jonsson et al, 2008, p. 100). The last of these entails significant time and resources spent by IKEA managers out in the field: “IKEA has over time struggled with achieving consistent result from its implementation efforts… A Four-Step model has been defined clearly recognizing the need to create awareness in the first step, create interest in what is coming in the second step, making users try out the solution in the third step and finally adopt