You are on page 1of 3

Patricia Isabel G.

Barlaan
BS Entre 4.1

Business Policy
Professor Malanum

Assignment no. 2
Anders Dahlvig/Group President and CEO/IKEA Services
IKEA is a brand famous for its focus on innovative solutions to the business of selling highquality, low-price home furnishings. Anders Dahlvig, IKEA's group president and CEO, argues
that long-term strategic planning is a key to their success. For the financial year ending August
2008, IKEA posted a 7% increase in sales over the prior annual period, recording 21.1 billion
in revenue. The firm has more than 128,000 employees and operates in 24 countries.
*Concepts
Vision and Mission
Long-Term Strategy
Stakeholders
Global economy
Strategic leaders
Organizational culture
*Questions :
1.What is this firm's vision?
IKEA's vision is to create a better everyday life for the many people. This vision provides not
only the presence of a great home furnishing offers but also taking the social and environmental
responsibility towards IKEA's customers, co-workers, staff, and the people behind every great
product the company produces.
2.What is the firm's mission or business idea?
Guided by this vision, IKEA Company comes up with the mission and business idea wherein the
producers, owners, and everyone behind the great products will offer a wide-rand of welldesigned, functional home furnishing products at a very low price for the benefit and affordabilty
of many people( future customers). In addition to that, the company aims to develop the skills of
every IKEA employee to become professionals in providing an optimal range of home
decorating products with good form and function at low price.
3.Describe its competitive advantage. Why do you think competitors have found this concept
difficult to imitate?
Through innovation, distribution and supply chain of product process, and culture as the
competitive advantage of the firm. Innovation- over 522 million customers visited their stores to
get inspiration for their home decorating ideas. Each idea is created in Sweden and each is
given a unique name, like BILLY or KLIPPAN. In parts of Europe the company has begun
designing single family homes which utilize its furniture products. It plans to manufacture about
500 homes per year. Each IKEA outlet has children playground areas and Swedish cuisine.
Distribution and supply chain- 41 purchasing arms in 30 countries allowing them to purchase
materials close to their suppliers. 27 distribution centers, 11 customer distribution centers, in 16
countries. Additionally relies on catalog promotion and sales. Printed over 200 million copies in
fiscal 2008 in 27 different languages.

Culture- founders imprint is still very alive in the company. Its founding roots are strong in low
prices, strong work ethic, high quality, innovative solutions.
Vertical diversification. Swedwood, founded in 1991 as the industrial arm and a subsidiary of
parent IKEA, operates factories and sawmills to produce furniture the for the companys retail
stores. First US operation opened in Danville, Virginia in 2008.
4.What is in the news about this company?
Ikea contributes to World Refugee Day with flat-pack fix for refugees
Its been a rocky month for Ikea. The flat-packers flat-packer-in-chief founder Ingvar Kamprad
left the company at the beginning of the month, a few days after British customers had been
complaining in their droves about the firms spooky gnome advert.
Some good news came with the announcement that Ikea would be contributing to World
Refugee Day with a flat-pack refugee shelter design. It has built a prototype for a hut which
would cost about 600 and in theory provide a much better temporary home than a tent. In
the spirit of cooperation with our MDF-stuffing overlords, Trending has commissioned our inhouse experts in teeth-grinding confusion to mock up some assembly instructions for what will
surely be called the Tillflykt (Refuge in Swedish).
Aid workers on borders around the world will surely find their chaotic jobs made much easier.
Until they realise they have to purchase a separate Allen key.
5.Describe Anders Dahlvig as a strategic leader.
Anders Dahlvig used the strategic management process to attain their vision and mission.
Anders is very focused on long term planning and not complying with the short term goals from
public market whims. He often conceived of and described as supportive, with managers
putting a lot of faith in their staff - a type of management that emphasises independence.
The company is owned by the founders Netherlands-based charitable foundation, Stichting
Ingka. In this way the firm has some freedom to stray away from shorter term goals that
investors and the public markets normally desire.
6.Do you believe Anders Dahlvig is constrained in his strategic decision making because of the
unique organizational culture at IKEA, or is he free to create and implement strategic decisions
as he sees best for the firm?
As stated above, the culture of the organization and its structure, not publicly traded, constrains
and frees the CEO from some of the day to day decision making.
The founder is still shown as a senior advisor to the firm plus the creator of the charitable
foundation that owns the company and its subsidiaries. This does constrain what decisions will
be made on the companys behalf.
One would not expect this firm to undertake, for example, an unrelated diversification strategy,
as the companys resources and capabilities are tied into low price high quality furniture and
wood products.
I believe that Mr. Anders Dahlvig culture of the firm is not publicly traded, constrains and frees
him from some of the day to day decision-action making. Yet this does constrain the decisions
that will be made on behalf of the company, because the founder of the firm is presented as a
senior adviser of IKEA, and creator of some charitable foundation. Some would not expect the

firm to undertake because the company's resources and capabilities are low-price and highquality wooden products steady.