Role Of Top Management In The Development And Implementation Of Ikeas Global Strategy

Outline

The research topic is “Role of Top Management in the Development and Implementation of IKEA's Global Strategy”. This study will bridge the gap in the field of top management role via reviewing IKEA management roles.

Introduction

Ingvar Kamprad Elmtaryd Agunnaryd (IKEA) a Swedish based European multinational organization which design and sells kitchen appliance, furniture, kitchen, and other critical products. It was started in 1943 by Ingvar Kamprad when he was 17 years old. Since 2008, the company has been the global largest furniture organization. While entering the China market, the company realized that high prices were one of the biggest barriers in marketing its prices. The company, therefore, came up with a plan to combine low pricing which is competitive with high-quality products as well as within a store setting which is appealing (IKEA Group, 2011). The company came up with its slogan which is “Low price with the meaning". Moreover, it also has a vision slogan which is “To create a better everyday life for the many people” (Harapiak, 2013). In its strategy, the company’s key objective is to provide clients with the most effective goods with minimalist lines so that, most individuals can afford them (Harapiak, 2013). The company also utilizes some key performance indicators which assist to estimate the vision’s progress and the long-term goals. This is achieved by monitoring progress and setting targets (Sandybayev, 2017). Regardless of the company having more than 1,050 suppliers who operate in more than 53 countries manufacture, studies indicate that global sourcing and pricing are some of the greatest strategic challenges for managers globally (Hultman et al., 2009). The objective of this paper, therefore, assesses the role of top management in the development and implementation of IKEA's global strategy.

Literature Review

Studies suggest that IKEA focuses mostly on the satisfaction of customers via the provision of immense value at the time of shopping (Sandybayev, 2017). The management of the company also ensures that products which meet the clients need are offered together with services which are meant to assist the client to identify, buy, transport and as well, utilize the product easily. There are a large number of products that are available at the stores for the clients to have products of their choice. Moreover, looking at the online stores, the products are meant to enable clients to view and search the goods easily in a user-friendly site. (Sandybayev, 2017). Through the management, the company has placed its employees in various sectors within the outlets to assist clients also. Besides, the company has come up with more appealing packaging which is enhanced via self-assembly flat packs which have the necessary instructions as per the Inter IKEA Group (2019). Furthermore, the company has established facilities like food courts, parking facilities, and secure children’s play sections among other facilities. All these facilities are aimed at providing customers with high convenience during their shopping activities. They are also aimed at adding value to the brand as per the IKEA Group (2016). Therefore, from the role of the company to ensure customer satisfaction, it can be revealed that the role of the management is to oversee the provision of the best conducive and favourable environment for customers to shop, transport and use products.

Since the establishment of the global strategy, IKEA is suggested to have been monitoring customer satisfaction constantly via the feedback gained through directly interacting with clients in aspects such as in its website and through customer care services (Sandybayev, 2017). Besides, the company analyses all factors like customers complaints as well as customers suggestion to estimate the level of clients satisfaction (Laszlo & Zhexembayeva, 2017 and Sandybayev, 2017) Abbas (2014), reveals that most important, IKEA monitors the various products demand at a various price to make sure that prices are designed to attract higher numbers of clients. Other studies suggest that, when the company is interacting/dealing with partners, its main objective is laid on production which is efficient as well as working to minimize logistics expenses (Baier et al., 2015). As suggested, the company deals with suppliers from around fifty states. This often involves constantly creating mergers/partnerships via trust, transparency, and respect as per the Inter IKEA Systems BV, 2016b). The company’s supply chain “IKEA Range & Supply” operates via the whole value chain which runs from the suppliers to its clients. This is an indication that the management has specialized to emphases on aspects like accessibility, quality, affordability as well as sustainability while dealing with its customers and partners (Sandybayev, 2017). Additionally, the organization’s international trading service offices internationally make sure that raw materials used by the organization conform to the quality standards which are appropriate and that the partners' transaction is performed as per the partnership terms and conditions (Laurin & Fantazy, 2017). This indicates that the company's management is determined to influence the company’s global strategy via efficiently satisfying client’s needs, maintaining the appropriate quality standards, reducing the company's environmental impact as well as generate profits in long run. Also, as per the Inter IKEA Systems B. V., 2016b), the company management is aimed at maintaining long term relationships with partners and suppliers to ensure that the raw material is of good quality and satisfies customers' needs.

Other studies indicate that the company's human resource executive managers oversee all the factors in the organization which influence the workers. This aspect includes training employees, engagement, payment aspects, advertisements, and employee training (Foray, 2018). Moreover, the human resource administrator is engaged in the personnel inspiration, awareness provision regarding safety as well as other employee well-being. All these functions aim at placing the organization at a better competitive advantage environment for profitability (Foray, 2018).

Previous studies have also revealed that the major objective of the overall operations management is to focus on the organization cost (Jiang et al., 2018 and Bortolotti et al., 2015). Additionally, effective operations management ensures the minimum production cost. Its manufacturing costs are low together with complying with policies regarding efficient distribution, functions, the impact of the environment and quality. From its efficient management, the company is known for generating high value in terms of functionalities, as well as quality at customer-friendly prices. However, regardless of many studies concerning customer satisfaction by IKEA, other studies such as Koniorczyk (2015) and Laurin & Fantazy (2017), suggest that the role of top management in the development and implementation of IKEA's global strategy is less explored hence necessitating this study.

Theoretically, this study is based on principles of administrative management which was developed by Miner and engineer Henri Fayol between 1841 and 1925. The approach came up with various responsibilities of management to ensure the success of an organization. These responsibilities include control, organize, command, plan, coordinate and forecast. The principle ranges from the significance of maintaining a clean facility to initiative and teamwork value which are a foundation to many successful businesses today (Sharma, 2020).

Methodology

This section gives an outline of the strategy of the study, the study methodologies to be covered, the research approach, data collection methods, and sampling. It also includes the data analysis strategies, ethical issues and limitations of the study.

The Research strategy

This study is applied, though it’s original. Various pieces of already existing studies regarding the role of top management in the development and implementation of IKEA's global strategy which exists in the Library of Birmingham and the University of Kent library will be reviewed. Moreover, several online sources such as IKEA website and other related online sources will be reviewed. Therefore, the paper will consider previous studies in the field.

The study Methods

To attain the study’s objectives, qualitative research designs will be utilized. Quantitative methods are appropriate for this study since small samples can be analysed effectively without a big effect on the scope of the study.

Data Collection Methods

To fulfil the objective of this study, the researcher will utilize secondary sources which will include six published books, two websites and three other online sources and journals. The books will be collected from the Kent university library and the Library of Birmingham. Studies suggest that secondary sources offer unique perspectives, enable the researcher to gain background information on the topic, contrast and support studies/arguments with other researchers’ ideas, though its quality may have been altered or biases by the primary researchers (Goode et al., 2017).

Data Analysis

Data analysis will be done using one-way ANOVA for the data collected in the study. The data will be grouped based on themes and subthemes as well as similarities and differences concerning the role of top management in the development and implementation of IKEA's global strategy. This data analysis strategy will also make a structure of the collected data in a method that promotes the study’s objective accomplishment.

Ethical Considerations

This study is subject to ethical considerations. For this study, permission will be requested for the use of secondary sources, books, and websites. Additionally, all concerned personnel will be notified concerning the study and the data collection process. All concerned personnel and authors will be informed of the study objectives.

Study Limitation

• Limited sources will be reviewed which might interfere with data analysis
• Secondary data will be utilized which might contain biased primary data.

Study Schedules

References

• Abbas, W. (2014). Why IKEA has had to slash prices in UAE. Retrieved 15 March 2020 from: https://www.emirates247.com/business/why-ikea-has-had-to-slash-prices-in-uae-2014-08-21-1.560332
• Baier, D., Rese, A. and Schreiber, S., 2015. Analysing online reviews to measure augmented reality acceptance at the point of sale: the case of IKEA. In Successful Technological Integration for Competitive Advantage in Retail Settings (pp. 168-189). IGI Global.
• Bortolotti, T., Boscari, S. and Danese, P., 2015. Successful lean implementation: Organizational culture and soft lean practices. International Journal of Production Economics, 160, pp.182-201.
• Foray, M., 2018. Understanding the Management Control System Used by Hybrid Companies: A Case Study of IKEA and MIO.
• Goode, V., Crego, N., Cary Jr, M.P., Thornlow, D. and Merwin, E., 2017. Improving Quality and Safety Through Use of Secondary Data: Methods Case Study. Western journal of nursing research, 39(11), pp.1477-1501.
• Harapiak, C., 2013. IKEA's International Expansion.
• Hultman, J., Hertz, S., Johnsen, R. and Johnsen, T., 2009. Global sourcing development at IKEA–a case study. manuscript, Jönköping International Business School.
• IKEA Group (2016). IKEA, (2015), Sustainability report 2015. Retrieved 15 March 2020 from: https://www.inter.ikea.com/en/inter-ikea-group/ikea-range-and-supply/
• IKEA Group, 2011. Welcome inside: Yearly FY10. Inter IKEA Systems Publishing. Sweden.