Environmental analysis is integral to understanding how the organization operates within the organization itself, with in the industry and within the macroeconomic environment. For this analysis the subject organization will be IKEA. “IKEA Group is one of the world’s largest privately owned companies, engaged in the retail of flat-packed home furniture and other house wares. Operating over 150 large-scale stores in over 30 countries, and with a mail order division, IKEA sells a range of furniture, which is made by over 2,000 suppliers in more than 55 countries. The company is headquartered in Helsingborg, Sweden”. (DataMonitor, 2007). IKEA major retail competition in the US are: Furniture Brands International Inc , Office Depot Inc , Sauder Woodworking Co., Stanley Furniture Company, Inc. , and Staples, Inc. This paper will identify the key macroeconomic variables which affect IKEA and the retail industry as a whole. To better understand the effects of such variables upon the industry, two specific variables will be developed further. Once an understanding of how the industry is affected by these variables, the challenges and opportunities will be identified for IKEA, which operates in the retail industry.
The key macroeconomic variable which affect the retail industry are: Economic output, productivity, unemployment/employment, inflation, and budget balances and finance. Economic output is used in terms of short run business fluctuations and long term growth. The Oxford English dictionary defines economic output as “relating to the science of economics; relating to the development and regulation of the material resources of a community or nation” and “that which is produced in an industry or process” (OED Online, 2007)...
... middle of paper ...
...y/50189377?single=1&query_type=word&queryword=productivity&first=1&max_to_show=10
MarketLine.2007. Retrieved on January 25, 2008 from
http://library.marketlineinfo.com.ezproxy.apollolibrary.com/library/DisplayContent.aspx?R=6878C795-4BCB-4C85-A319-6F33C508FD80&N=4294839321
Maryland Department of Labor, Licensing and Regulation. 2007. Retrieved January 25, 2008
from http://www.dllr.state.md.us/lmi/laus/seasonal2007.htm.
McConnell, C. & Brue, S. 2004. Economics: Principles, Problems, and Policies. McGraw-
Hill Companies. Retrieved on January 24, 2008 from www.ecampus.phoenix.edu/content/eBookLibrary/content/Print.aspx
US Department of Labor. 2007. Retrieved on January 25, 2008 from
http://www.viewswire.com/index.asp?layout.
US Department of Labor Bureau of Labor Statistics. 2007. Retrieved on January 23, 2008 from
http://www.stats.bls.gov.
.
.
United States. Dept. of Commerce and Labor. Reports of the Department of Commerce and Labor (House Document). Books.google.com. U.S. G.P.O. 1903. Web- Digitized 17 Jul. 2008. Web. 03 Oct. 2011. Print.
"Summary." U.S. Bureau of Labor Statistics. U.S. Bureau of Labor Statistics, n.d. Web. 09 May 2014.
"Summary." U.S. Bureau of Labor Statistics. U.S. Bureau of Labor Statistics, 8 Jan. 2014. Web. 11 Mar. 2014.
U.S. Department of Labor. U.S. Department of Labor, n.d. Web. The Web. The Web. 08 Feb. 2014.
"Table A-15. Alternative Measures of Labor Underutilization." U.S. Bureau of Labor Statistics. U.S. Bureau of Labor Statistics, n.d. Web. 04 July
"Summary." U.S. Bureau of Labor Statistics. U.S. Bureau of Labor Statistics, n.d. Web. 20 May 2014.
This part of the report will highlight the problems within the external environment that affect Marks and Spencer. Before planning and decision making can take place an organisation must be aware of these issues. The key factors that impact upon all organisations are Political, Economic, Social and Technological. These factors are commonly referred to as PEST factors. Political changes like change of government could affect the minimum wage that M&S workers are paid. Economic factors such as inflation could affect the pricing of garments. The Social factors that would need to be taken into account are lifestyle changes and demographics, M&S would need to consider where their target market stood. Technological advances could also affect M&S sales just recently their website has been updated from a corporate site to a new website offering online buying. Globalisation is a huge environmental factor affecting M&S. Globalisation is the increase in cross-border economic, social and technological exchange. For organisations it increases competition and the search for cost advantages.
United States Department of Labor (2014, May 25). Bureau of Labor Statistics Data. Retrieved May 25, 2014, from http://data.bls.gov/timeseries/LNS14000000
"Summary." U.S. Bureau of Labor Statistics. U.S. Bureau of Labor Statistics, n.d. Web. 30 Apr. 2014.
"Summary." U.S. Bureau of Labor Statistics. U.S. Bureau of Labor Statistics, n.d. Web. 19 Mar. 2014.
Statistics, U.S. Department Of. "Databases, Tables & Calculators by Subject." Bureau of Labor Statistics Data. U.S. Department of Statistics, n.d. Web. 24 Mar. 2014
The sources of IKEA’s successful entry into the furniture retail business were IKEA’s low prices and resilience. First, Ingvar Kamprad, the founder of IKEA, began selling furniture in his mail order company. Then he was faced with a social problem and turned it into a business opportunity. Since 1935, furniture prices rose faster than any other retail good at 41%. Kamprad responded by creating a line of furniture priced so that all could afford it. The present furniture cartel attempted to stifle Kamprad’s growth and success. The cartel banned Kamprad from selling directly to the consumer at shows, then managed to persuade the manufacturing cartel to stop supplying Kamprad with furniture. Kamprad responded by supplying elsewhere and now could charge even lower prices. IKEA’s success was due largely to low prices and Kamprad’s ability to capitalize on bad situations.
Moving on from the organizational issues to the financial aspects, an analysis aiming to prove if sustainability is measurable or not will be provided, discussion based on IKEA’s sustainability report of 2015th year.
"Summary." U.S. Bureau of Labor Statistics. U.S. Bureau of Labor Statistics, n.d. Web. 03 Feb. 2014.
"Summary." U.S. Bureau of Labor Statistics. U.S. Bureau of Labor Statistics, n.d. Web. 09 Apr. 2014. . (5)