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Demonstration of understanding the nature of IKEA in Germany.

Pages:
10 page
Sources:
12
Solution:
Solution Available NOW
Subject:
BUSINESS & MANAGEMENT
Language:
English (U.S.)
Date:
Total cost:
$ 30

INSTRUCTIONS:

Assessment Brief

Title: Demonstration of an understanding of the global context in the business environment

 

Demonstration of understanding the nature of IKEA in Germany.

 

Instructions for assessment

The coursework assignment requires students to submit a 2500 word report by the above deadline. The basis for the report involves students being allocated a country in which they need to provide an assessment of the business environment prevailing in that country (Germany). Another important feature of the report is that it should be focused around a particular business organization-IKEA. Therefore, the report should essentially provide an analysis of a specific organization – IKEA, of the student’s choice, that may be looking to expand its business activities in relation to the particular country that they have been allocated. The scenario to be considered could either be concerned with the establishment of a company in the country or an expansion of its current operations within the country i.e. it should relate to a foreign direct investment decision.

 

Students will be randomly allocated a country that they should focus their report on (by drawing this from a container during the first seminar). They will also be required to focus their report around a specific organisation. In particular, the report should be written from the perspective of a multinational company (of their own choosing) that is contemplating expanding their business operations within the country that they have been allocated. This could be viewed as a consultancy report for the company or one produced by a manager from the company itself.  An example of a relevant scenario would be a report based around the issues that would need to be considered by Waitrose if they were considering opening new stores in the United States. Although it is not necessary to provide great detail on the current operations of the organisation that you have chosen in your allocated country, because it is essentially a hypothetical scenario, a certain amount of discussion on this is useful. Further information is available in an updated Frequently Asked Questions document on moodle. Students should have agreed with their seminar tutor which business organisation that they will base their report around by their seminar in week 4 at the latest (and ideally this should have been done by the end of week 3). Moreover, students are encouraged to discuss and confirm their choices of company with their seminar tutor as early as possible in the semester. No changes should be made to the specific organisation on which the report will be written after week 4, neither can changes be made to the country that was initially allocated. It is aimed that confirmation of the country and business organisation to be used in each student’s report will be posted on moodle during week 6. As a result, each scenario under consideration should be unique to a given student given that they will have chosen a business organisation that is of interest to them, within the context of the business environment that they have been allocated.

 

The report will require an analysis of the general business environment in the country that the student has been allocated as well as relevant information on the organisation that they have chosen. In particular, students should attempt to relate specific aspects relating to the type and nature of the organisation with the main factors, issues and considerations affecting the business environment in that country. The report should include relevant tables, graphs and statistics, together with an accompanying commentary of these, in order to provide specific details – especially with regards to the business environment. Students will also be expected to develop appropriate analytical framework  PESTLE analysis and Porter’s 5 Forces (it is recommended that students should avoid including SWOT analysis in their reports).

Your report will be assessed against the following criteria (further details in the rubric at the end of this assessment brief):

·       Information on the selected business organisation

·       Discussion of the allocated business environment

·       Application of an appropriate analytical approach

·       Use and application of appropriate data and examples

·       Structure of and quality of writing in the report

·       Presentation and referencing

 

Suggested Structure of Business Organisations and Environments Reports

 

Introduction

Ø This section should include information on the specific scenario relating to the selected organisation – IKEA  that is exploring a foreign direct investment opportunity in the allocated country – Germany.

 

Background Information on (insert name of chosen company)

Ø This section should include relevant/basic information on the business organisation such as on its size (including financial performance), legal form/ownership structure and current international operations

Ø See FAQ document for some further details

 

Background Information on the Business Environment in Germany

Ø This section should include relevant/basic information on the business environment in terms of the economy, culture and political, legal and financial systems

Ø See FAQ document for some further details

 

Analysis of the Business Scenario

Ø This section should include a fairly detailed discussion and analysis of the business opportunity under consideration using one analytical approaches PESTLE analysis and Porter’s 5 Forces

Ø See FAQ document for some further details

 

Conclusion

Ø This section should include a summary of the main issues that have been discussed in the report and some recommendations in relation to the scenario that is being considered

 

List of References

Ø All studies and sources should cited in the text should appear here and be fully referenced on a consistent basis

 

Appendices

Ø Supplementary statistics or information on specific issues to be included here if required

 

SOLUTION:

 

 

global context in the business environment: IKEA

Name

Institution/Affiliation

Date

1.0 Introduction

IKEA is Swedish based company recognized as the world’s largest furniture retailer. The firm sells affordable furniture products to its middle-class global consumers by providing low-priced modern-day flat-packed designs. Today, IKEA is a world leader in home furnishing with the business supported by over 389 stores in 47 countries, with 347 in 24 countries being IKEA-owned while the remaining stores are managed by franchisees. Walcott (2011, p. 11) recognizes that IKEA runs a global strategy that primarily concentrates on quality, efficiency and cost reduction. As a result of its global strategy, IKEA strategizes to expand its operations in Europe, most especially in Germany. IKEA plans to own at least 10 percent or more in Germany-based furnishing companies so that to support its Foreign Direct Investment (FDI) policy. This report will provide an analysis of the general business environment as well as relevant information on the projected foreign direct investment initiatives of IKEA in Germany. In particular, the report will try to evaluate the primary factors, issues, and considerations influencing the nature of FDI in Germany.

2.0 Background information on IKEA

            According to Irish Times (2016), IKEA operations are under a Dutch-owned foundation, Leiden-based INGKA Holding under the leadership of founder Ingvar Kamprad. However, Interogo a Liechtenstein-based foundation owns the IKEA intellectual property. Inter IKEA a Delft-based foundation that was registered in Luxemburg has its licensed rights from Interogo hence it is owned by the foundation.  Inter IKEA receives at least 3 percent of INGKA total turnover so that to use its brand and other business processes. The ownership structure of IKEA is quite complicated, as such it as a unique structure among major retailers. Technically, INGKA is a franchisee of Inter IKEA even though its operations can be likened to a stand-alone retailer with the capacity to decide on production lines as well as control its supply chain. The complex structure of IKEA ensures that the foundation exists forever without any risks of a takeover or the need of it seeking financial support from stock markets. INGKA has the responsibility of helping IKEA towards perpetuity while Interogo is to expand the IKEA “concept” (Irish Times, 2016).

            IKEA is a world leader in home furnishing. The company’s global revenue surpassed the £35 billion in the fiscal year ended 2016 (Statista, 2018). IKEA remains competitive in the furniture business as the company boasts of extensive knowledge and understanding of its customer base. This mode of business operations has ensured that the company is the fifth most valuable global retailer. Besides, IKEA is the leading and dominant global brand that is valued over $20 billion. Presently, the company runs operations in 47 countries through 389 retail stores. Annually the IKEA stores report close to 800 million customer visits. IKEA's top...

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