List ikea’s external and internal challenges. looking at ikea’s challenges, which ones do you think pose the greatest challenges? why? how would you address the challenges?

These are the External challenges;

Opening new stores to drive future growth.

Finding new sources of supply to support more store openings

Find suppliers to be a strategic fit with its highly efficient operations

Given the issue of deforestation and the link to global warming, IKEA would need to take into consideration finding a low-cost material as a replacement for wood.

These are the Internal challenges;

The person responsible for all the strategic decisions made for IKEA and the influence he has on the culture and organization of the company.

The privately holding of IKEA by a complicated network of foundations and holding companies form Netherlands, Lichtenstein and Luxembourg, that restrains the access of large capital sums needed for a rapid global expansion.

Taking a closer look at the challenges that IKEA has to take, in my opinion, the greatest threat from the internal ones would be the one regarding the decision-making process and person in charge of it.

Considering the fact that in his late 80’s the most important man, who founded and led the company decided to step back, it’s a big step to decide on the new chairman, his actions, decisions or strategy to implement.

Also, regarding the external challenges IKEA has to face the competitors, with different strategies on each market. IKEA should definitely try to expand on the furniture market, which involves a high attention to the strategy used to open new stores and as well further thinking and plan when it comes to production factors, especially raw materials.

I think it is really important for them to take into consideration the deforestation and global warming issue, so to find a low-cost material that could successfully replace wood, at a still satisfactory quality.

Discussing the importance of the challenges shown above, I think IKEA places itself at a pretty important step in its expansion and development process. Therefore,the challenges mentioned above should be treated very seriously and with a lot of attention to the details and potential threats. Of course, a decision making process it is not a simple thing to do, but the new chairman and his  management team has to be strategic in this area.

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