Ikea - Research Paper Example

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Ikea

According to a research made in 2008, the company has been considered as the largest furniture retailing firm in the world. Overtime, proportions of discretionary spending of consumers in most economies have increased with rise in per capita. Such changes in composition of consumers’ expenditure have helped to enhance revenues of comfort product producing companies like, IKEA (Peng, 2010). Even so, it is also true that since the global financial crisis, aggregate income generated from the retail sector in the international market has fallen due to recessionary trails in economies. A very strong rival of IKEA, MFI Group Limited (a furniture retailing firm in U.K.) was forced to shut down its business during such critical conditions. So, since 2008, IKEA is facing strategic issues in business. The aggregate sales of the firm were recorded as 20.9 billion in 2009 and annual growth was approximately 1.4% since then (IKEA Group, 2013c). Rather, due to financial crunches, IKEA had to cut down almost 5000 jobs in 2009 (IKEA Group, 2013b). Thus, from the above analysis, it can be claimed that the company needs to frame appropriate productive strategies in business which will help it to expand the scope of business internationalization and increase revenue in the long run. The following context of the paper will study the strategic initiatives that are already undertaken by IKEA as well as suggest ways through which the company would be able to strategically grow in the long run (Twarowska and Kąkol, 2013).
From the above context, it is evident that IKEA is facing problems since emergence of the financial crisis. The company lacks adequate manpower to enhance its overall productivity. Moreover, aggregate demand experienced in company’s domestic market has also fallen. This is evident from the annual report of the company. The gross revenue of IKEA was recorded as US$ 2583982 in 2012 and US$ 2406539 in 2011 (IKEA Group, 2013a). Even so, the liabilities in business ...Show more

Summary

In the current era, extent of competition among corporate firms has significantly increased with rise in scope and scale of business internationalization. The success of a business firm in the contemporary world can be analyzed from its nature of international business expansion…
Author : johnsjeramy
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