As part of the Strategic Planning module, students are required to Essay

As part of the Strategic Planning module, students are required to analyze a case study and write a report to the CEO to help hi - Essay ExampleTable of Contents Introduction Company background 3 Analysis of IKEAs cable Model and its Strategic Positioning (Question 1) 3 IKEAs Internationalisation Strategy 4 The internationalisation in the USA (question 2) 5 Current Asian markets (China and Japan)(question 3) 6 Further Asian Expansion (question 4) 8 Current Business Environment (question 5) 9 PESTEL 9 Industry analysis 10 SWOT 11 TOWS 13 References 14 Appendix 1 The IKEA Concept 16 APPENDIX 2 Ikeas International presence 19 Introduction Company background Founded in 1943 by 17- course-oldin Sweden, IKEA is named as an acronym comprising the initials of the founders name (IngvarKamprad), the farm where he grew up (Elmtaryd), and his home parish (Agunnaryd, inSmaland, South Sweden). Today, IKEA is the worlds big(p)st furniture retailer, having pioneered the concept of selling furn iture in kits that are later assembled by customers in their own home (IKEA 2011). With its base in Sweden, the confederacy retails affordable flat-pack furniture, accessories, and bathroom and kitchen items in its 253 stores pass on over 24 countries at the end of the 2008 financial year. According to IKEAs data, the company had worldwide sales of about 23.1 billion in the 2008/09 fiscal year Figure 1 (IKEA 2011). ... IKEA sells a lifestyle that signifies hip design, thrift, and simplicity and targets customers that are seeking value and are therefore willing to participate in the merchandise process by serving themselves, taking the sizables, and then assembling them if necessary. It therefore seems as it targets a market niche. The fact that IKEA does not hold a large market percentage in the geographic markets, except Sweden (Thompson and Martin 2005) may be taken by some as indication that a differentiation scheme is incompatible with high market share as argued by Porte r (1980). However, IKEAs 25% market share in Sweden and its growing market share in other countries (Caplan 2007, Datamonitor 2010a, 2010b) may be taken as an evidence of the opposite. Furthermore, one may argue that the company follows a cost leadership strategy, as it tries to position at the market based on price as its positioning of being different. Porter (1985) identified several aspects of establishing cost leadership, including creating a good product, drawing advantage from many sources, and making cost of part of the organisations culture. All these aspects have been integrated into IKEAs strategy and allow the company to engage in innovative cost management. IKEAs CEO announced in 2007 that the company has succeeded in reducing prices by approximately about 17% over the last five years (Caplan 2007). Indeed, the company is able to integrate both a differentiation and low cost strategy in much(prenominal) a way that it can pursue both an operational excellence strategy a nd a product leadership strategy, something that few companies have been able to win (Kaplan and Norton 2000). In terms of operational excellence, IKEAs success is based on the