Introduction of Strategy Planning & Implementation

                It is important to look at IKEA that how the company was stared and how it grew as a successful company in the world with its basic structure. In terms of furniture making, IKEA is one of the largest in the world. The company was started by Ingvar Kamprad, a Swedish entrepreneur. He started in 1943 with the concept of making affordable furniture products which have quality as well. The idea generated by Ingvar was so strong that IKEA started growing big, and now it is one of the leading ones in furniture market. The concept and structure of the company got so much success because it kept its focus on providing, low cost, quality & stylish furniture, which can be affordable for majority of the people (Grant and Jordan 2015)

            The other great thing about IKEA is that its success is not limited to any local market; rather it grew big as an international company, and gained so much success around the world. It established its stores in so many countries around the world including Romania, Australia, various European countries etc. Their success has been based on doing things, which most other companies are not able to do like keeping the costs down for customers as much as possible. The vision of Ingvar was to make affordable products, so this vision is injected in its every strategy. The company has made sure that from start to end level of production, they focus on cost cutting strategies so that they can deliver their promise to their customers. Currently, IKEA is owned by Stichting INGKA Foundation, which is a non-profit organization, and registered in Netherlands. Currently, the company is operating in 29 countries with its 355 stores delivering quality and affordability to its customers around the world (IKEA 2018)

International Strategy of IKEA

            It is important to understand that expansion to international markets is always a hard task for any organization, and when they do so, they have to face various issues and challenges. IKEA has to expand on international level to cover international market. But they have to come up with a strategy, which can be beneficial for them. The first important task for them was to identify those markets, which can have a great potential of generating high sales volume and success. It is important to analyze that how IKEA did its international expansion by adopting a certain strategy. First of all, they would select an international market by indentifying its potential, then next step by IKEA was to purchase land with cheap rates around somewhere of the big cities (Chu, Girdhar and Sood 2013)

            Once the production unit is established on the land, IKEA used to send its managers to the country, where expansion has been done. These managers used their previous experience in running and establishing the new unit in new international market. Once the new store started doing well, and generating sales, then the command is given to local managers. This is the pattern used by IKEA to go with their international expansion. It is also essential to mention here that if one store in a particular country got popularity, and generated enough sales, then IKEA team indentified another geographic location in the same country to open more stores. In early part of their international expansion, the company went with almost same kind of products and designs. Minor adjustments were made for few markets, but overall product level remained the same. The company used non-hierarchical organizational structure, which was developed by their Swedish roots. This structure has proved successful for IKEA for so many years and they have kept the IKEA Way alive for decades (Grant and Jordan 2015)

Organizational Structure of IKEA

            The current organizational structure held by the company is an ownership structure with hierarchy. The owner for the IKEA group is its non-profit organization named as Stichting Ingka Foundation. There are two major functions performed by this organization, first doing charities of various kinds, and secondly handling investment related decisions and mattes of Stichting Ingka Foundation. In this hierarchy, under the Stichting Ingka Foundation is the IKEA group itself. And under IKEA group, Ingka Holding B.V. along with its various controlled entities is doing their functions. This hierarchy of structure allows company to use a long term approach, with an independent pattern (IKEA 2018)

            The current structure of IKEA is considered hierarchical one, where everything is controlled and managed by IKEA. The IKEA manages its stores all around the world through franchising, and they also manage the design of furniture on their own. The other parts controlled by IKEA include procurement, manufacturing as well as logistics. Inter IKEA Systems holds the IKEA trademark and many of the operational activities are handled by this entity (Bergin 2016). This structure has been proved good for IKEA to manage things smoothly, but as business challenges are growing with time due to increase attractions by e-commerce platforms. So, IKEA has to come up with a new organizational structure, where things can be decentralized a bit so that they can manage challenges of every market. The Stichting Ingka Foundation should sell and delegate some of the operations to Inter IKEA Systems. It would allow them to decentralize their authority and processes to each local market and managers so that they can take decisions, and top management can focus on big decisions of e-commerce business (Bashir 2015)

Conclusion on Strategy Planning & Implementation

        The above given structure is very much suitable for IKEA that Ingra should only manage its IKEA stores, and t should delegate power to IKEA systems, who can manage various things on their own. It would allow them to keep things in order for future as they still have to make a big mark in online business space and cope with the challenges of e-commerce business.

References of Strategy Planning & Implementation

Bashir, S. 2015. "Impact of Decentralized Decision Making on Firm’s Performance." Arabian Journal of Business Management Review 5 (4).

Bergin, Tom. 2016. IKEA finalizing its biggest overhaul in decades. Accessed Octoer 16, 2018. https://www.reuters.com/article/us-ikea-restructuring/ikea-finalizing-its-biggest-overhaul-in-decades-idUSKCN0XC0IA.

Chu, Valerie, Alka Girdhar, and Rajal Sood. 2013. Couching tiger tames the dragon. Accessed October 16, 2018. https://www.businesstoday.in/magazine/lbs-case-study/how-ikea-adapted-its-strategies-to-expand-in-china/story/196322.html.

Grant, Robert M., and Judith J. Jordan. 2015. Foundations of Strategy. Second Edition. John Wiley & Sons.

IKEA. 2018. ABOUT THE IKEA GROUP. Accessed October 16, 2018. https://www.ikea.com/ms/en_US/this-is-ikea/company-information/index.html#.