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Question:

Discuss about the Business level strategy IKEA.
 
 

Answer:

Introduction

IKEA has been operating in the international furniture industry for quite some time. The organization has used its unique strategies to expand its business into various international markets other than the domestic markets in Sweden. The cost-effective and light business processes of the organization have helped it to expand its business successfully in the international markets. IKEA follows its traditional strategies and policies for establishing and operating its business operations in various countries. This research paper focuses on the analysis of the current organizational chart and possible future organizational chart for the organization based on a number of factors. The organizational chart for IKEA is recommended based on the demand of the products and the style of doing business in the corresponding markets along with a number of other micro and macro environmental factors (Gassmann, 2016).

Analysis

This section of the report analyzes the organizational charts mentioned in the previous section of the report along with the ways in which these can be implemented in IKEA. The recommended organizational chart keeps a number of modules of the existing organizational model same and extends the overall model to add more innovation and creativity capabilities.  

Stichting INGKA Foundation

This foundation is the current owner of INGKA Holding B.V. and will continue playing that role. This foundation is responsible for holding and reinvesting the shares in the IKEA group. This foundation is also responsible to fund various charities through the Stichting IKEA Foundation (Twarowska, 2015).

Stichting IMAS Foundation

This foundation is currently managing all the financial assets of Stichting INGKA Foundation and will continue doing the same. The foundation will be responsible for making the critical business decisions regarding the financial asset investments and management (Vahlne, 2017).

Stichting IKEA Foundation

This foundation is the humanitarian counterpart of the Stichting INGKA Foundation and will continue to play the same role. It will be responsible for managing and running the corporate social responsibilities of the entire IKEA group of companies. This foundation will add more number of corporate social responsibilities to its objectives and will ensue that the business image of IKEA is maintained in the societies of operation (Pham, 2016). 

INGKA Holding B.V.

This is the parent company of the IKEA group of companies and will continue to play that role. This is responsible for taking the critical business decisions for IKEA along with the innovation and creativity decisions for the products. This contains both the IKEA group of companies and international group of innovation and creativity as part of its management scope.

International group of innovation and creativity

This group will be responsible for all the creative and innovative initiative taken in any of the IKEA group of companies. The parent company, INGKA Holdings B.V. will manage the activities of the international group of innovation and creativity. All the innovative and creative suggestions and initiatives will be run through the members of this group before they are pitched to the higher management and the board of directors of the organization (Gummesson, 2014).

This group will also be supported by a board of international managers who will be responsible for putting in their opinions and efforts in making the design and manufacturing process of the products innovative and creative. This board of international managers will contain the Swedish managers along with the regional managers working in various retail stores in different countries (Trevisan, 2016).

This group also will consist of all the regional research and development teams. These regional R&D teams will be responsible for analyzing various factors present in the corresponding markets of operation in order to anticipate the changes in the demand of the customers and the trends in the corresponding markets. The regional R&D groups from various countries will be responsible for gathering all the relevant information for the products sold by the organization and the reaction of the customers to those products. This in turn will allow the management of IKEA to understand the ongoing changes in the demand of the products and the trends in the corresponding markets.

This group will also contain all the regional marketing teams of IKEA as part of it. These marketing teams will also gather quantitative and qualitative data regarding the performance of the products sold by the organization in the corresponding markets. This in turn will allow the management of IKEA to determine the possible weaknesses of the products along with possible gaps in the manufacturing and design process of the organization. The activities of this group will allow the management of IKEA to introduce more innovation and creativity in the business model of the organization. All of these regional R&D and marketing teams will have corresponding managers to manage the employees in the teams (Gassmann, 2015).

 

IKEA group of companies

As mentioned earlier, the IKEA group of companies will be managed by the parent company INGKA Holding B.V. which is responsible for taking critical business decisions along with resource management. Each of the companies in the IKEA group will consists of multiple organizational modules, which are mentioned in this section (Soltanizadeh, 2016).

International design and manufacturing group

Each of the IKEA group of companies will contain this group consisting the international managers and regional groups. The international managers in this group will contain all the Swedish managers of IKEA who will be responsible for taking the critical business decisions on the design and manufacturing process changes for the products sold by the organization. The regional design and manufacturing groups from the retail stores of different countries will pitch in possible changes for the manufacturing and design processes of the products. This group will be responsible for innovating the manufacturing and design process of the products according to the demand for the products and trends in the corresponding markets.

International retail group

This group will be responsible for the policies and strategies for the retail stores of the organization in different countries and the products sold in those retail stores. The international retail group will consist of the Swedish mangers along with the regional retail group, which in turn consists of the regional managers and employees working in the corresponding stores. The international retail group will allow IKEA to have innovative and creative ways of selling the products in the retail stores across the globe (Friesl, 2017).

International customer relationship management group

This group will be responsible for the improvement of the customer relationship management strategies implemented by IKEA in various markets. This group will consist of the Swedish managers along with the regional customer relationship management groups, which in turn will contain the regional managers and the customer relationship professionals. This group is responsible for ensuring the high efficiency and accuracy in the customer relation activities, so that the issues and queries of the customers are resolved efficiently (Grant, 2016).

International supply chain management group

The international supply chain management group will consist of the international managers along with the regional SCM groups. This group ensures that the supply chain activities in various countries are managed efficiently. This group also ensures that the supply chain management activities in the organization are based on various innovative and creative solutions in order to increase the efficiency.

Summary statement

The recommended organizational chart in this report focuses on keeping a few of the modules intact from the current implementation and extend it to add new modules and features. The new organizational chart will contain all the IKEA group of companies along with the international group of innovation and creativity in the INGKA Holding B.V. parent organization. Each of these companies under the IKEA group will contain international groups for design and manufacture, supply chain management, customer relationship management and retail groups. These international groups will in turn include the regional managers and employees as part of the regional groups and will ensure that the corresponding business processes are based on various innovative and creative solutions (Verbeke¸ 2013).

 

References

Friesl, M., Larty, J., & Jacobs, C. (2017). Putting strategy into action–The role of artefacts for business format replication. European Management Review.

Gassmann, O., Frankenberger, K., & Csik, M. (2016). Innovation Strategy: From new Products to Business Model Innovation. In Business Innovation: Das St. Galler Modell (pp. 81-104). Springer Fachmedien Wiesbaden.

Gassmann, O., Frankenberger, K., & Csik, M. (2015). 7 Innovation Strategy: From new Products to Business Model Innovation1. Business Innovation: Das St. Galler Modell, 81.

Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.

Gummesson, E., Kuusela, H., & Närvänen, E. (2014). Reinventing marketing strategy by recasting supplier/customer roles. Journal of Service Management, 25(2), 228-240.

Pham, T., Pham, D. K., & Pham, A. (2016). From Business Strategy to Information Technology Roadmap: A Practical Guide for Executives and Board Members. CRC Press.

Soltanizadeh, S., Soltanizadeh, S., Abdul Rasid, S. Z., Abdul Rasid, S. Z., Mottaghi Golshan, N., Mottaghi Golshan, N., ... & Wan Ismail, W. K. (2016). Business strategy, enterprise risk management and organizational performance. Management Research Review, 39(9), 1016-1033.

Trevisan, E. (2016). The Irrational Consumer: Applying Behavioural Economics to Your Business Strategy. Routledge.

Twarowska, K., & K?kol, M. (2013). International Business Strategy-reasons and forms of expansion into foreign markets. In Management, knowledge and learning International conference (pp. p1005-1011).

Vahlne, J. E., & Jonsson, A. (2017). Ambidexterity as a dynamic capability in the globalization of the multinational business enterprise (MBE): Case studies of AB Volvo and IKEA. International Business Review, 26(1), 57-70.

Verbeke, A. (2013). International business strategy. Cambridge University Press.

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