Write a discursive case study of IKEA’s strategy including the three elements below

IKEA's Case Study

IKEA is a Swedish international company that dwells in modern furniture, kitchen
appliances, and home accessories. Ingvar Kamprad founded it on the 28 th of July 1943. Its
headquarters is Delft, Netherlands. Currently, IKEA has led to the growth of other industries
like the stitching INGKA Foundation. The company specializes in both retail and wholesale
kinds of business with customers all over the world. The case study of IKEA is to understand
its strengths and weakness using the PESTLE analysis following the drop of stock in the
market. According to BBC, IKEA is currently struggling to supply about 10% of its stock to
customers. As a result, there is a need to examine the strategic approach of the company as its
facing shortages (Elizaveta, 2021)

Analysis of IKEA's using PESTLE

Thomas, Sandwell, Williamson & Harper, 2021 outlined the PESTLE Analysis as it
has worldwide stores offering services and products to varied customers. The company
provides lavish furniture and home décor at an affordable price, thus the vast customer base.
It is an advanced technology-based company that provides its clients with furniture to suit
their cultural interests. Using the PESTLE analysis, we need to identify the factors that
influence the company's growth and those that hinder its success. PESTLE acronym stands
for Political, Economic, Social, Technological, Legal, and Environmental. As a brand, IKEA
faces challenges, and PESTLE Analysis, helps us understand the specific areas to implement
and improve its services for better delivery to customers.
Political factors that affect IKEA are its proximity and location, and despite having
branches in over 40 countries, the company faces challenges with various regulations. Some
countries have similar political influences while others have differences, thus affecting the
growth of IKEA. Countries with a stable political atmosphere benefit from increased profits,
exports, and imports. For instance, IKEA may lose profits if the company is in a country with

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no political stability. An unfriendly government may make exportation and importation
harder. IKEA depends on such political factors to remain relevant in the market. Otherwise,
its revenue will be at stake. A country with a good relationship is an added advantage to
IKEA as it enjoys good profits and business growth. Today, IKEA enjoys services from
countries like Asia and India due to the political stability that has promoted the growth of the
business.
Economic influences affecting IKEA are the international laws that hinder its growth
from penetrating the global economy. IKEA is among the companies that suffer from the
2007 recession. For this reason, consumers shifted from purchasing products from the
companies, thus affecting its strategic growth. On the other hand, IKEA's strategic plan was
to have affordable furniture that everyone could purchase. Social factors that affect IKEA are
the cultural influences that attract customers enhancing their purchases. IKEA has majored in
providing quality products that favor the customer's cultural needs, a skill that has improved
the company's growth. However, IKEA had faced cultural challenges with its products in the
West, particularly in Saudi Arabia, when the company removed photos of Saudi Arabian
Women from their catalog.
Technological Factors that have influenced the growth of IKEA are the advanced
types of strategic planning that it has used to attract more customers. The use of modern
magazines and catalogs to promote different types of furniture provides customers with an
attractive view of IKEA's products. The company has also utilized its website, where
customers may visit and make orders online. The technology base has enhanced a platform of
feedback and communication between existing clients and new clients. Legal factors that
affect the strategic plan of IKEA are the varied regulations and laws that different countries
have put across, which affect it either negatively or positively.

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In some cases, IKEA faces problems with the law as customers complain of poor
product quality. On the other hand, IKEA has enhanced its policy to recover money for any
product that does not satisfy the customer's needs. Environmental factors that have influenced
the strategic planning of IKEA are its co- friendly nature. It has also adopted renewable
sources thus saving energy in poorer nations. The company has also invested in using solar
and wind panels.
Yiqian (2020) formulates