"Global Strategic Management: IKEAGeneric strategiesCost leadership - The marketing staff of IKEA had found effective strategies withpromotional tools that become a ?master-stroke? in increasing product demand and hugeprofit earning tool for the company. Notably, the global channel of the company is firmlycoordinated with reference to the marketing channels that manages balance between marketdemand and supply and hence control the cost of product suitably. Differentiation – Based on the economic statistics of 2014, IKEA invest €1.3m on directinvestment for production, €9m on raw material, and €4.3m on the labour cost. Additionally,the advertainment cost that reflects their social corporate responsibility, towards the socialpromotion and commonwealth development are oriented towards objective to achieveposition brand image in market (De Marchi, Di Maria and Ponte, 2013, pp. 299).Cost focus - During the year 2014, the company shows cost drop by least 10% for eachdoubling their volume which suggests that reflect a satisfactory progress of company onglobalisation platform. In addition to this, the transportation cost is another important fact inwhich ratio for ?value? versus ?bulk? and ?value? versus ?weight? is of high importance.Differentiation focus - The strategic objective of IKEA with reference to the price control oftheir products is oriented to retain a comparative cheaper pricing. This, in turn, is effective asit manages to attract more of customer and thereby increases the opportunity to gain moreprofit margins.Ethical assessment of strategySince 2010 to 2016, the company holds single unit that frames optimal strategic frameworkfor managing investment, reviewing the organisational procedures, and manages the businessprocesses. According to Johansson et al. (2013), there were certain issues related toorganisational culture, overburden of work pressure on employees, and high turnover that11 | P a g e Global Strategic Management: IKEAfurther forces IKEA to change their HR policies. Since 2016, the company holds separatedivision as a part of management and company holding in order to handle the issues related toinvestment and business. The prime reason for this change is to enhance the business-relatedfocus as well as to maintain the efficiency (Johansson, 2013, pp. 137). This can be one of thepotential ethical issues focusing on employee needs within the organisation.In the present time, the value reflection for engagement into the corporate socialresponsibility is also necessary for driving customer perspectives. IKEA reflect their greenwashing activity in terms of forestation, promotion of women leadership, educational fundsfor children education and health campaign (mainly for rural affiliation). It is worthmentioning that engagement in activities other than business operation (production,marketing, and sales), the company also need to seek value measures to promote thedevelopment of society and to sustain the environmental issues, which are marked as bestethical business practices.Many groups generally are the semi-independent owners who will be paying fees or royaltiesto IKEA in return to their usage of a trademark for selling the products. This is morereflective in African and Oceania markets. In this consideration, the company managedethical practices by promoting the entrepreneurship at small and medium level firms. As aresult of this, the GDP contribution to these under-developed nation as well as self- independence of the community members is also increasing. Notably, the elements that affect the business world in the present contemporary environmentinclude technological advancement, cost effective solutions, and robust human resourcemanagement, performing market analysis based on political, environmental, and demographicpattern (Deligonul, Elg, Cavusgil and Ghauri, 2013, pp. 506). More importantly, with theincreased prospect of globalisation, it becomes more critical for the organisations to take careof issues such as diversity management, use of a motivational strategy for employee12 | P a g e Global Strategic Management: IKEAretention, and corporate social responsibilities. At IKEA, a careful consideration is taken formanagement of needs of employee and customers as key stakeholders. Though the objectiveof these measures is to bring cost effective solution as well as to gain market attraction. Onthe other hand, IKEA’s effort in understanding the diverse cultural aspects helps the localconsumer to get more benefited for maintaining their life-style at comparative lower prices.IKEA is also known to follow the requirements that are framed by the government formanaging the business is (i) trade policies; (ii) technical standards; and (iii) regulations (Acts)(Yu, Wang, Zhong and Huang, 2016, pp. 179).Evaluation of strategyAccording to a report by Jain et al. (2015, pp. 90), the authors have dictated two-waystrategies adopted by IKEA in conjunction with their entry strategies across various globallocations. These two strategies (in broad scope) can be discussed as:- Non-equity mode of entry, which mainly include contractual agreement and exportbusiness. - Equity mode of entry, which mainly include the wholly owned subsidiaries and jointventures. As discussed in the report by Schlegelmilch et al. (2016, pp. 221) that export and importbusiness contains the lower level of risk, along with having low-level control on the marketdynamics. In this prospect, the company directly exports their furniture products and call-infor superior raw material to-and-fro between functional locations of IKEA and various othernations across the globe. On the other hand, the highest market control and greater expectedreturn on investment are reflective with business lines in which direct investment andacquisition of resource are found. These two terms are popularly mentioned as Brownfield13 | P a g e Global Strategic Management: IKEA(having direct purchase) and Greenfield investment (operations are made through thefunctional units) (Lessard, Lucea and Vives, 2013, pp. 61). The above section details how the company have used demographic and various relatedfactors in determining the risk associated with investment for globalisation of the company. Afurther detailed analysis of external business strategies can be clearly explained using Porter’sFive Force framework. Moreover, exporting and importing is the foremost strategy for thecompany to enter into international markets, such as in Eastern Europe and US. Exporting inthis consideration mainly include furnished furniture and home accessories to foreign nations.In a report by Larsson et al. (2015, pp. 65), it is mentioned that IKEA uses the franchisingterm more often compared to that of licensing scheme, owing to the rationale that it includeslower political risk, low-cost investment, and also allows opportunity for expansion intodifferent regions.Importantly, according to a report by Bertilsson et al. (2014, pp. 125), it is also noteworthy tomention that IKEA does not put emphasis on changing its corporate strategy and operationalroutine with an objective to adapt the local market; but are implementing such changes onlyin cases, there exists compelling reason for the same. This being cost effective strategy tomanage productivity as well as to manage customer attraction. The best strategy that is being used IKEA is reduce cost and dominate market is the directinvestment. Overall, based on these strategic elements, it can be realised that there arenumerous strategies for market entry that encompass varieties of risk and commitment level.In general, these implementation strategies are processed in several steps in which the marketanalysis and its stability play a crucial role in making the corresponding strategic decision forinvestment and business operations (Devinney, Mcgahan and Zollo, 2013, pp. 325).14 | P a g e Global Strategic Management: IKEAConclusion and recommendationsBased on the above analysis, following recommendation scope can be implemented at IKEAfor robust strategic governance:- Company needs to open their key functional units in location where IKEA popularityand product demand is much higher. - Pricing strategy much includes the location of strategic resources and the difference inprice value with reference to GDP and per capita income in different countries.- According to a report by Schlegelmilch et al. (2016, pp. 129), IKEA has fragile natureof their business management that tends to offer them cost advantage; which is also aprime reason behind their success of expansion in European markets. This should bepractices in Asian market for gaining more profit margins. In summary, the present report is based on IKEA Company, considering the organisationalsuccess at international level. Based on the analysis from various sources, it is realised thatthe company manages customer and market drive accurately, which in turn is useful inmaintaining competitive advantage. The company thus have effective global strategies thattend to attract customer of all income class and maintains a high brand image across theglobe. Essential elements that are requisite for expansion of business at global level such asdirect investment networking to manage inventory control, strategy to reduce thetransportation cost, franchising, and joint ventures are discussed in great detail that actuallyhighlights some of the success factor responsible for achieving global recognition by thecompany.15 | P a g e "