Strategy Management: IKEA International

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Introduction

Strategic management entails the allocation of resources to support the strategies chosen by the organization to achieve its ambitions. The successful implementation of any project depends on the strategies and the approach used. The strategic implementation process, therefore, involves the integration of various management activities which includes the strategic control in monitoring and evaluation of the organization’s progress. For the successful strategic implementation to be realized, a realistic organizational design and structure should be put in place. Alkhafaji (2003) argues that the development of the information and the decision processes should be done systematically as per the stipulate doctrines of the organization. The human resource division which is responsible for steering the company’s affairs should follow the recommended procedures in managing the human resources including the approach to the leadership system, reward schemes and also the staff recruitment on the basis of meritocracy and competence.

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For an organization to successfully execute its implementation strategy, the following supporting key factors should be carefully managed: action planning; organizational structure; monitoring and control; human resources; linkage; and the annual business plan.

The essay highlights the structure, systems, people and the culture of IKEA international. The essay initially describes and analyzes critically the structural design, the key strategic control systems, and the primary people concerns, cultural factors and the strategic implementation of IKEA international. The basis of development in every positively progressing organization depends on the organizational design of the organization. The essay will mainly focus on the management of the information technology in relation to the business management. The setting of the realistic goals by the organization determines the realization of the organization’s vision.

How international opportunities have developed for retailers such as IKEA over the last 20 years

With regard t the case study the IKEA has managed to develop and maintain its international competencies and thus be able to successfully operate in today’s dynamic and competitive environment. The development of the international opportunities in the retailers such as the IKEA international is attributed to several strategic factors which include the organizational design.

The organizational design

The organizational analysis and deals with the organization and leadership development. The organization analysis and design of IKEA international bring together all the effective teams of all levels within the organization. This is aimed at positioning them on how to tackle the future challenges through the provision of guidance for rotational succession planning as depicted in the case study. This is very necessary for the organization as it will tip the executives on how to leverage their strengths and alert them on the unforeseen black spots which are likely to hinder the normal functioning of the organization.

In the organizational design of IKEA international, the appropriate organizational structure which tallies with the company’s objectives and the future plan is carefully designed. This fosters the pursuance of the collective goals whilst managing the performance of the company. This also includes the staffing of the organization.

The performance of the organization depends on the leadership and the character of the individuals working in the organization. In order to maintain their internal competencies therefore, most retail enterprises have put proper designs in place which ensure the smooth running of the organization. The legislation of strict and viable office ethics and laws which should be adhered to by all the employees and the clients of the organization have been enacted by most retail entrepreneurs in their quest to maintain their international competences

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In organizational design of such retail organizations too, the mode of recruitment of the staff in organizational management, the virtues and ethics are a prerogative to the success of the business. The mission of every business institution is to make realistic profits, and this depends solely on the management of the business. The business steering personnel consisting of the chief executive officers and the board members in the management hierarchy should diligently ethically exercise their powers. The main objective of every business institution is to make realistic profits.

Ethics are developments of standards and guides whom the society expects her members to uphold at all times. Ethics are based on the factors associated with the morals, values and beliefs. The moral behavior is necessary for the growth and development of a business. The inflated remuneration packages for the senior management officials in the business institutions are common nowadays. This therefore calls for the recruitment of the persons with high integrity to the higher cadres of management in business institutions. The retention of Ingvar Kamrad to manage the daily operations of the IKEA international with his age notwithstanding allows dynamic approach to various arising issues as a result of the changing environment.

The organization’s ethics are built based on the ethics of the individuals involved in the running of the business. Proper mechanisms must therefore be put in place to ensure that the business and the office etiquette are observed at all times by the management officials. This will eradicate some vices such as the misuse of power amongst the chief executive officers and the directors especially in the recruitments and the handling of the employees’ welfare. For proper execution of duties the organization ought to be all-inclusive. This means that the organization should be gender-sensitive in its recruitment of the organization’s employees. Specialization and division of labor should be observed and embraced at all times while delegating duties and responsibilities to the staff members. This will improve the performance of the organization.

The design of the organization should be such that the management hierarchy should portray gender equity and should consist of persons of high integrity cum competence. The essay will highlight the principles of organizational design and the importance of effective organizational planning.

Attempts by IKEA international to maintain growth and stability

Strategy development

The strategies entail the mechanisms that are put in place to ensure that the objectives of the organization are met. The strategies of the IKEA international are made based on various underlying themes which are necessary for the positive progress of the organization. This includes the financial development of the organization, proper development of the internal processes of the organization, well built customer relations cum acquisition and the general growth cum expansion of the business of the business. The proper development of this enhances the operational effectiveness of the organization and also the franchise of the organization. In the case study provided, the IKEA international enhances its growth and stability through the increase in its number of outlets by opening numerous numbers of branches in eleven countries.

Strategic planning

The strategic planning involves the initiation of realistic vision and vision of the organization. This will ensure that the implementation strategies are in line with the missions and the vision of the company. Strategic planning also involves the setup of the viable business strategies. The organization needs to put up the business strategies which will foster the productivity of the business organization. This includes the integrated business strategies whereby many factors that are crucial for the making of the business are taken into consideration. Strategic marketing plays a crucial role in creating a good profile and boosting the cognizance of the organization. As depicted in the case study, the IKEA international delivers her message of self-actualization, and democratic ideals through her successful venture into the new markets. This is done with regard to the new technologies so as to acquire many clients globally. The modern technology is therefore embraced while doing this. Online marketing cum online sale of products is highly recommended for the positive progress of the organization since this will ease the communication and movement hence providing the customers with value, superb service and the convenience. The key business drivers include the employer, the management staff and the junior staff who are the subordinates. The effective running of the organization depends on the input of every individual within the business organization. The IKEA international for instance injects the knowledge of expatriates into the franchise of the organization. It is as a result of this therefore that IKEA international makes a move of opening more than 300 stores globally. The management is therefore obliged to recruit reputable personnel into the organization who are profit-oriented and self-driven especially in meeting personal cum organization’s targets. The welfare of the employees should also be adequately catered for by the management, this includes the all-inclusive consultations in decision making. The employees therefore will feel recognized and thus their working spirit will be enhanced. The implementation of this will lead to the improvement of the organization thus leading to the resulting in improved service levels, initiation of the new products, increased customer retention levels and the diversification of the organization in her quest to go franchise.

Strategic focus

Flood (2000) argues that strategic focus mainly deals with the customer intimacy, the product leadership and the operational excellence. The organization must focus on the customer intimacy. This is mainly done through the timely meeting of the customer needs and building the customer relationships. The customer service and satisfaction can be regularly determined by the organization through the issuance of the data satisfaction questionnaires to be filled by the customers. This will enable the organization’s management to analyze the data collected and use it to adjust the customer approach as per the response indicators. Quality and superior products should be created by the organization this therefore warrants the change and innovation by the human resource division of the organization. The core aim of every business institution is to make as realistic profits as possible. Optimization therefore has to take the centre stage within the organization. This involves the careful planning to enable the organization to make maximum profits with minimal expenses. The human resource division of the organization should therefore perform the strategic focus with regard to the strategic pillars which include: business strategy, organization stricture and culture, management practices, information technology and the personnel involved in the running of the organization.

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It strategy development

In creating the information technology strategic plan, several factors must be taken into consideration. This includes proper understanding of the business strategy approach embraced by the organization. The organization’s principles are integrated with the operations and infrastructure of the organization thus providing the basis for the establishment of good governance and decision-making framework essential for the realization of the organization’s mission. Alkhafaji (2003) states that proper infrastructure must be developed to enhance the attainment of the organization’s vision. In order to come up with a logical framework, which meets the unpredictable divergent needs of the customers, the organization should embrace the SWOT analysis. This will enable the organization to determine their failures hence relate them with their weaknesses and strengths which will ultimately make them attain the desired goals.

Portfolio management

The portfolio management is done for the interest of the organization with regard to the organization’s vision, mission, strategies, objectives, work plans, tactics and techniques. The vision of the organization is the ultimate desired goal which the organization strives to achieve. The strategies used to achieve the desired goals are designed in a way that makes maximum use of the company’s goals. This strategy also defines the objectives that the organization strives to achieve in pursuance of the organization’s vision. The portfolio management of IKEA international as depicted in the case study is divergent and addresses the needs of all the stakeholders.

Risk management

The human resource division of the organization should be well versed with the risks that are likely to accrue hence leading to the downfall of the company. In the event of the risk occurrence, the human resource division should be able to act effectively to counteract the downfall. This includes the change in the system of working. Such events warrant the overhauls in various sectors of the organizations which include the change in management, change in the mode of operations, change in technology used, staff reshuffle and use of tactical approaches in tackling the challenging matters. It is therefore necessary for the human resource department of the organization to strengthen their monitoring and evaluation teams. Monitoring and evaluation of the organization’s activities will enable the company to cage its trend hence adjust accordingly to suit its goals. It is only through the monitoring and evaluation that the organization can identify new opportunities and threats. This will therefore enable the organization avert the threats and equip their staff with the advanced technologies of good management. The identification of the organizations’ weaknesses attributed to the employee’s incompetency and laxity, enables the organization to organize capacity-building workshops for its employees. Capacity building of the organization’s employees will contribute to the improvement of the organization’s quest to achieve the ultimate goal. The information technology portfolio management should also be considered by the human resource management of the organization. Improved performance of the organization warrants the use of advanced technological systems in handling the affairs regarding the management of the organization. The set rules and regulations of the organization should be strictly adhered to by all the members of the organization and this should be governed by the stringent measures pertaining to the punishment and demotions of those violating the stipulated rules.

The importance of knowledge transfer when entering new markets

Alignments and business strategy

As seen in the case study, the portfolio management, the enterprise architecture and the governance of the information technology within the IKEA international tallies with the organization’s objectives. In the application of the different strategic approaches, it is necessary for the organization to ensure that the appropriate tools necessary for the execution are available and adequate. The information technology used by the company should be able to meet the needs of the organization. The implementation strategies of the organization should also be in line with the preset goals of the organization. The organization should therefore set the goals that are realistic and achievable. The skills and competence of the employees should also match the current needs of the organization. This therefore warrants the regular organization of the capacity-building workshops and the induction of refresher courses that are relevant to various personnel within the organization. The review of the enterprise architecture is also necessary since it links the used information technology by the organization with the strategy and gives explanations on its impacts on business function and process. The business architecture is very crucial for the management of the organization since it provides vital details concerning the business processes, the service areas and the delivery channels. The proper alignment of the architecture within the organization will ensure the smooth running of the business. Thus the guidelines and procedures stipulated and meant to be followed by the organization should be strictly followed and external interference meant to stifle the operations process of the company should be completely barred.

Strategic implementation

The strategic implementation entails the application of the preset procedures by the organization in its quest to achieve the goals. However, there are many barriers that are likely to hinder the strategic implementation. These include the vision barrier, the employees’ barrier, the management barrier and the resource barrier. The design of the management systems is such that it strives to meet the ultimate needs and desires of the organization.

The vision barrier occurs when the preset strategies are not in line with the organization’s vision. The vision of the organization therefore should be very clear, realistic and attainable. The people working within the organization sometimes become obstacles to the implementation of the strategies. This is normally experienced when the nature of workers executing different duties becomes rigid especially in embracing the new technologies of management. It is therefore necessary for the employees to be flexible in order to succumb to the changing management and innovating technologies. Proper measures should therefore be taken to ensure that the recruited personnel are not superstitious and conservative. The employees of the organization who are involved in the implementation of the strategy should be conversant with the vision statement of the organization as well as the strategy to implement. They should therefore be able to interrelate and intersect the strategy to be implemented and the vision of the organization together with the mission and objectives.

The resource barrier happens when the organization lacks adequate funds and resources to execute its mandate. Some strategies are expensive to implement and require sufficient resources. The organization will therefore be rendered inactive and sluggish if it fails to implement such strategies which are necessary for the realization of the organization’s goals. The budgets of the organizations should therefore be carefully planned and linked to the requirements of the organization as outlined in (Flood 2000). This ensures the fulfillment and the satisfaction of the organization’s needs. The management barrier accrues when the leaders fail to provide clear instructions regarding the strategy to be implemented. This therefore means that the management should be well versed with the strategy to be implemented. The management should be able to fully understand the strategy including the challenges that are likely to be encountered in the course of the implementation, thus preparing the remedies in advance to counter once the strategy runs out of line. The management of the organization should also ensure that the factors which are detrimental to the implementation of the strategy such as lack of adequate resources should be catered for.

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Financial framework

A good financial framework should be developed in order to meet the needs of the organization. The financial framework should conform to the type of leadership exercised within the organization and should tally and satisfy the stipulated work plan. The financial framework should be in a way that allows accountability and embraces good management. It is therefore the responsibility of the organization’s management to ensure that the leaders involved in the management of the finance section are reputable and have integrity of the highest pedigree. Such leaders should embrace the virtue of honesty, accountability and should observe the laid down rules and procedures regarding the management of the organization’s finances. The organization’s profit orientation should be able to rationalize opportunities in terms of defined goals thus enabling them realize the quantitative and qualitative benefits of the organization.

The main lessons of practicing managers

In regard to the case study of IKEA international, it is evident that the core aim of every profit-oriented organization is to make wider profit margins with fewer expenses. The optimal excellence of the organization is necessary and thus necessary and viable strategies should be put in place by the practicing managers to foster the realization of the organization’s mission and vision. This warrants the careful design of the organizational structure to enhance the attainment of the organization’s needs. It is necessary for the practicing managers of various business organizations to embrace the use of SWOT analysis in order to develop their organizations. This will enable the organization to monitor her progress and change the mechanisms and principles of operation accordingly. It is therefore the company’s prerogative to follow the information revolution and monitor the trends by leveraging the consumer insight hence delivering the high-quality products cum services. The advancement in technological aspects also leads to the quality provision of services; this is an aspect which should be embraced by all the organizations’ managers in order to meet the global requirements. The implementation strategies should be formulated in a way that links with the company’s objectives; this ensures that the realistic goals are achieved. The business strategies should be flexible enough to allow for adjustments in lieu of the unbecoming trends especially in pursuance of the organizations’ needs.

References

Alkhafaji, F A 2003, Strategic management: formulation, implementation, and control in a dynamic environment. Routledge.

Flood, P 2000, Managing strategy implementation: an organizational behavior perspective. Wiley-Blackwell.

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BusinessEssay. 2022. "Strategy Management: IKEA International." September 15, 2022. https://business-essay.com/strategy-management-ikea-international/.

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BusinessEssay. "Strategy Management: IKEA International." September 15, 2022. https://business-essay.com/strategy-management-ikea-international/.