Strategic International Business Management

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Management performance tends to handle the operational process in organizations through regular feedback. The scope of business management is enhanced when a business model is invigorated. It is vital for a company’s success that several changes should be implemented (Korsgaard, Rask &Lauring, 2007). The process of strategic management is to implement a strategy in an organizational framework that allows the accomplishment of strategic goals. This kind of operation is to get more customers who spend more, so longer retention is made. (Lechehab&Kamassi, 2016) The monitoring and planning analysis in an organization need specific processes to meet the objectives. This report will discuss international strategic business management in IKEA regarding Malaysia. The report will discuss the mission, strategic goals, and SWOT analysis.

Company Overview

IKEA is a global brand that was found in 1943 by Ingvar Kamprad. The company is famous for its famous and modern stores. Its different kinds of products are eco-friendly and cost-effective. IKEA operates in 389 stores worth of 42.9 billion. It also has few branches across the world with such as KungensKurva, in Shen Zhen, and Texas. It has presented an example of trendiest with low-cost furniture. IKEA is considered a recognizable brand at the globe with best practices. The trademark of the company is well designed and functional regarding frugality experience. These practices are related to the principle that offers competitive advantage (Soh, Wong & Chong, 2015). The image, quality, and affordability of products is an asset for the company. The company has the opportunity to be streamlined about its customs, franchising, and popularity.

IKEA is successful in terms of its management operations. Its formulation processing is based on the right demographic framework. IKEA stores are customized to offer a better experience to customers in terms of fluid shopping (Hultman, Johnsen, Johnsen & Hertz, 2012). The living room and domestic style experience for customers are exciting. They need to take a code linked to the selected item when they buy furniture. The functional layout of products is seen as a mass service for a product offering that fulfills the basic needs of consumers.  Some basic features of the firm are high quality, wide variety, the flexibility of products, less disruption, and easy supervision.


The mission of the company is to build a strong culture that will deploy crucial factors for the continued success of IKEA. The concept of sustainability is inherent because furniture is considered a necessary value for people’s lives (Korsgaard, Rask &Lauring, 2007). The recognizable brand name and concept are linked to low valued price and home furnishing products. The company has a wide range of its products and allow frugality practices for being the first choice of consumers as compared to other brands. The culture of IKEA is to work within everyone, create and develop it further, so people live with this vision. This concept is building a core competency of the company against others. IKEA has established its long going capacity in Malaysia with the science and technology concept and managerial practices. The developing economy of Malaysia is offering huge potential to the company to produce furniture due to newly identified competitive advantages (Garnier&Poncin, 2019).

SWOT Analysis

IKEA is a valuable furniture brand in the world, and in 2019, its worth is estimated at US$45.4 billion. The strengths of the company are its brand image and brand name. The reputation and awareness of the company are its key strengths (Johansson &Thelander, 2009). A most significant strength is its low-cost affordable furniture because it aims to sustain in the lives of people, so it is cost-conscious. The philosophy of IKEA is to keep costs low and incorporate new technologies, advances, and innovation to allow profit margins(Arrigo, 2005). This is associated with the profitability, efficiency solutions, and cost-effectiveness methods in handling products. In Malaysia, IKEA has a competitive advantage in producing products.

The combination of effective packaging and low price furniture startup in Malaysia is a big strength for the company. The products of the company are new, different, and allow extraordinary shopping experience to people, so consumers are engaged in decision making (Soh, Wong & Chong, 2015). It is different from other brands because of the wide variety, selection, and offering a chronological order. Just as its competitors are working in Malaysia, IKEA aims to maintain long term relationships with customers, so optimizing its cost and transport timing.

Its weaknesses are less focused on improvement policies while working in less developed countries like Malaysia. It also has inadequate support policy as well as limited visibility regarding marketing and promotion. The sparsely located few stores in Malaysia can be less responsive to increased demand of the population (Minkes&Minkes, 2005). It has to employ more staff to enhance the buying experience of customers by attracting them. The packaged furniture and its technical nature is different and needs more focus on assemblage. It depends on the third party to assemble and assist in purchasing products that can be a weak point for IKEA. There is an absence of detailed instructions that can accompany products and retain consumers when they go for detailing.

There are some opportunities for IKEA to further develop and boost its concept in Malaysia. It can increase its clientele by educating people more about environmental waste and pollution. If wastes are reduced regarding furniture usage, it can develop a strong concept as an opportunity in corporate social responsibility (Hultman, Johnsen, Johnsen & Hertz, 2012). With Malaysia and other less developed counties like India and Indonesia, IKEA can fully develop its network of furniture supply. It has the advantage of working on broader concepts by developing effective solutions for business. This will provide solutions to reduce environmental pollution, so a sustainable life at home will be easy. In Malaysia, the potential exists regarding natural resources and others like advanced technology and science, so it can promote a technical friendly product (Garnier&Poncin, 2019).

Some external factors can work as threats to the company in Malaysia. There are many low-cost retailers in Malaysia that can share market value and specialty of furniture with IKEA; there is a need to produce more economical and consumer-friendly products to compete with the rivals. The financial conditions of a country are other luring threats for IKEA. Any financial crisis and economic downturn in the economy can cause threats to IKEA (Lechehab&Kamassi, 2016). The size and scale of the company is also a threat because it has to focus on the operating economy where experts believe watering down of innovation due to less targeted consumers in Malaysia. The company is steadily acquiring a household place in masses, so it has to improve quality and standard with its expansion (Fröding& Lawrence, 2017).

IKEA strategies and its associated plans

IKEA’s marketing strategy through which the organization searched out cultural and advanced customers and also searched a sufficient market to sell its products. IKEA sends its designs to concern professional people to its homes and provide them feedback(Arrigo, 2005). This strategy allows the ministers to make the market decisions that are based on people’s life’s experience; this experience might be collected from survey and data collection. IKES Strategies considered all elements that are involving around product and price into mixed marketing. IKES tries to present its best product on the lowest market rate, and it is also called the 7Ps of marketing, in which position, development, methods, characters, and material elements are taking place (Hultman, Johnsen, Johnsen & Hertz, 2012). IKEA was established by Kamprad in 1943; this term developed when the home furnishing stores are used for monetary purposes around the world. All IKEA retailers are running their own franchise business.

IKEA of Sweden concerns all product ranges, which are associated with IKEA; the entire production differentiated with tags, designs, and quality. To start IKEA’s strategies, find the solution to various questions.  IKEA knows about consumer satisfaction and how much it is important. Consumer relations influence the business significantly (Stanciu, Zlati, Antohi&Bichescu, 2019).

Different research objectives also take place in this term, like investigating the consumer demand theory. Establish a referencing and suggestion system for company development. The basic purpose of this theory is to satisfy the consumer at any cost, either the consumer belongs to any category of life. In those days’ customers have awareness about the brand and its worth; at first, the consumer judges the product, and its services afterward estimate his personal experience and, at last, make a decision whether the product is appropriate and meets its exceptional level or not. After using the product, if the product fulfills its requirements, then the customer will purchase it again. Otherwise, he contacts any other commodity. In this fast business establishment affairs, customer relations are critical to managing. Customer satisfaction shows that he will purchase the commodity afterward to satisfy the demand that would be a long-term relationship to company and customer till then the other product may not facilitate its needs. An efficient marketing program consisted of all terms and conditions to evaluate the mix marketing concerning the market objectives which a company has to occupy to compete for the other rivals (Fröding& Lawrence, 2017).

IKEA base the business success on superior marketing strategies that must be the same around the world, which consisted of the description list it must be in written form in 17 languages and color should be blue and yellow, the color of the Swedish flag. This technique applied to the customer that they are free to purchase any commodity. The price also is shorter than other brands because the consumers, first of all, focused on the price (Johansson &Thelander, 2009). To understand the IKEA business strategy, it is necessary to be based on business conception and formulation prepared by IKEA 12th January 2009. It also provides a wide variety of sketches, functional, and other home decorating products at a low price thus can purchase every kind of class. The main objective must be centralized the objectives and purposes of IKEA’s business strategy. It also provides a guideline on work; these rules implement all sectors of the strategy, whether they belong to the country or around the world. IKEA focused that the environmental designs are presented into its home decor items; for this purpose, it launched a plan in 2015(Arrigo, 2005). This plan will combine the cultural, environmental, and financial and commercial crises. IKEA follows SWOT analysis to gain its objectives (Carter, 2009). This is a developmental business tool. It also assists the business to focus on its fundamental issues. SWOT is a planning stage and focuses on strengthening and weakening and also deals with the internal and external aspects of the business, and also face all threats that are affecting the company matter and associated with other business merchants. The SWOT business plan also concerns retailing, production departments. It also can deal with economic situations, social variations, and technological advancements. IKEA also emphasizes that every business holder has to sense its strengthening aspects to overcome its future challenges. IKEA also focuses on attracting the fundamental group of customers to establish a brand in a world community. It also provides different business techniques at a low price (Alänge, Clancy &Marmgren, 2016).

To maximize the profit, the brand has to establish a trustful relation to the supplier, retailer, and customers. It also embraces several strategic techniques to create customer trust and gain worth in a market. Long term relations to customers or retailers also provide a profitable sense to the business. IKEA emphasizes making good relations with customers by fulfilling their expectations and trying to find out how the new customers ties in a long-term relationship (Baxter & Landry, 2017).

Successful Strategic Goals

The world economy is booming, so the furniture market is also going up with rapid development. 70% of the global market is acquired by traditional furniture companies. The scenario is easy to understand due to increased production capacity, technical advancement, and strategic management. IKEA has also managed to enter in China, Indonesia, and Malaysia by focusing on the key significant strengths and its strategic goals. In many less developed countries, it has developed its concept of competitive advantage and working to show greater potential. Its production is increasingly focused on matching quality standards in Malaysia and beat its competitors. The clear mission of the company is to sell a wide range of furniture with reasonable prices that allow people to buy and get involve (Baxter & Landry, 2017). The wide range offering is a keyword in functionality because consumers, in this way find a place where everything is present. The strategic goals that IKEA has considered to enter in Malaysia are creating high efficient sales department, offering best ideas for home furnishing and serving customers with the best shop of furnishing ideas.

The aim of IKEA at Malaysia to offer them successful appearances and a perfect shopping experience for whole family (Carter, 2009). The people and environment is always a concern for IKEA so its management try to manage every day’s life with a better notion of commitment. It has also responded any rising public concern regarding sustainability, choice of the communication and product range. In Malaysia, effective focus on transportation and raw material was easily maintained due to easy access and prevalence of raw material. This situation helped company get its green targets and spread impact. In Malaysia, it is working on the original approach of dealing customers, i.e. self-serving method. The catalog allow people select whatever they want so they choose their products and put and assemble at home.  The centralized strategic direction at IKEA is increased with its expansion (Alänge, Clancy &Marmgren, 2016).

The rapid internationalization has enhanced the challenges for company in a broader scenario so there is also increasing difficulty of managing and responding needs. It is considering cultural and social factors while operating in new premises so emerging demographic trends are easy to tackle with a focused strategy(Arrigo, 2005). IKEA is also focusing on varied level consumer groups by implementing its strategies. The power of strategic management is significant under the organizational structure. It is focusing on maintaining a balance between autonomy and country-level centralized intervention, which will be attributable to franchisee autonomy and subsidiaries. Its suppliers are located in low-cost countries that are an advantage for Malaysia based IKEA (Stanciu, Zlati, Antohi&Bichescu, 2019). They can access raw materials so effectively reach out to distribution channels. The suppliers are selling standard products with broader dealing at the same time.

IKEA’s brand is focusing on innovation mix, advanced, and quality furniture. A combination of low-cost high quality furniture is the business model that is further being tackled with new innovations and techniques to expand and cut costs. Its simple idea of keeping costs low for manufacturers and customers is workable because it doesn’t own its sole manufacturing facilities. The upstream innovation and research & development activities are centralized in Malaysia. The strategic and operational strategies are workable and acquired a steady scope due to global policies.


While operating in a global market, an international brand may face some challenges. For instance, while operating in Malaysia, it has to focus on its internal capabilities, ceasing activities, and incorporate key strategies to make its reputation (Carter, 2009). It has to work in an intensely competitive environment because targeting consumers is not easy, and there are multiple brands considering similar operations. It has been facing external and internal challenges in Malaysia regarding raw material, transportation, and availability of the latest technology. Some competitors are focusing on influential corporate decision-making strategies to make effective decisions for the firms. The management team has identified key threats from this business point objective so IKEA has to implement consumer related methods. It is facing diversification issues to boost sales (Alänge, Clancy &Marmgren, 2016). Some internal cultural issues are also prevalent. Due to geographic factors, IKEA is facing different taboos in Malaysia so it has to focus on to improving furniture design.


IKEA in Malaysia is working on competitive strategy with low cost initiatives. It has opened new stores, with an aim to use stability strategy. This will be helpful to monitor performance of the products and allow well operating conditions for business. The stability factor increases productivity of a company so it can take profit based features. Low cost operating methods, effective decision making approach and a business formulating method for its consumers are main pillars of Malaysian market that company is focusing. IKEA is working at global level so a focus on price and differentiation is a key to maintain. The price cost of company is linked to the cost of production, under strategic management framework, this scope is maintained. Globalization is a central aspect of strategic management, so IKEA in global market places, is expanding this view by gaining better competitive advantages and profits. The trend of consumer products at global marketplace is emerging and IKEA is viewing this phenomenon in Malaysia to reap a better growth.


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