Unit 5 Business Strategy UKCBC
Business Strategy: Telecommunication Sector (UK)
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The aim of this unit is to develop students’ awareness of the different kinds of strategy which could be used in an operational, tactical or strategic role for an organisation. This will be underpinned by a thorough knowledge and understanding of the theories, models and concepts which could significantly support an organisation’s strategic choice and direction. On successful completion of this unit students will have developed enough knowledge and understanding of strategy to make a positive, efficient and effective contribution to the development of business plans and operational direction. This could be in the role of a junior manager responsible for having a specific input into an organisation’s decision-making and planning.
Case study – IKEA (UK)
IKEA is a Swedish-founded multinational group that designs and sells ready-to-assemble furniture, kitchen appliances and home accessories, among other useful goods and occasionally home services. It has been the world’s largest furniture retailer since at least 2008. It was founded in Sweden in 1943 by 17-year-old
carpenter Ingvar Kamprad, who was listed by Forbes in 2015 as one of the ten richest people in the world, worth more than US$40 billion. The IKEA group has a complex corporate structure, which members of the European Parliament have alleged was designed to avoid over €1 billion in tax payments over the 2009–2014 period. It is controlled by several foundations based in the Netherlands and Liechtenstein.
As of June 2019, there were 423 IKEA stores operating in 52 countries. In fiscal year
2018, €38.8 billion (US$44.6 billion) worth of IKEA goods were sold. The IKEA website contains about 12,000 products and is the closest representation of the entire IKEA range. There were over 2.35 billion visitors to IKEA’s websites in the year from September 2015 to August 2016. The company is responsible for approximately 1% of world commercial-product wood consumption, making it one of the largest users of wood in the retail sector.
More information available on: https://businesscasestudies.co.uk/ikea/
Task 1 – Analyse the influence of environment on chosen company.
You need to identify the mission, vision and objectives of IKEA. You are to critically analyse how the macro environment impacts and influences IKEA’s valid strategic decision and tactical actions.
Tips: In your answer you are to use PESTLE analysis and Stakeholder analysis. The application of the models is crucial.
Task 2 – Critically evaluating the internal environment and
Continue with IKEA (or your chosen organisation), critically evaluate its internal environment focusing on the strengths and weaknesses of its internal capabilities. To do so, you are required use ‘VRIO/VRIN’ analysis for internal capabilities and ‘Resource Based View’ framework for competitive analysis.
Tips: You can start with the RBV framework and then work on ‘VRIN/VRIO’ framework. SWOT analysis can be used to identify strengths and weaknesses of organisation’s internal capabilities.
Task 3 – Evaluate and apply the outcomes of Porter’s Five Forces model.
As a part of business strategy, organisations continuously plan to expand. In this task you are required to evaluate Porter’s five forces for IKEA. You are required to produce strategic direction to improve the competitive edge.
Tips: You need to use Porter’s five forces framework and based on the outcome of the evaluation; you can use Ansoff’s matrix to produce valid strategic directions
Task 4 – Interpreting strategic direction.
You are required to use Porter’s generic strategies to create a strategic plan for IKEA and what tool management can use apply these strategies.