Environment assignment

As globalization is the main trend nowadays, a lot of companies expand aggressively, such as IKEA which is the world largest furniture retailer and manufacturer with its successful expansion into more than 30 countries. This report aims at discussing IKEA as a successful global expanded model to analyze and evaluate its international strategies. We firstly analyze IKEA’s internal environment using resource-based view and SWOT, and external environment by SWOT and by the method of PEST in order to evaluate whether the IKEA’s strategies reflect the organizational environment and cater to the external trends. Then we refer to the motivation for IKEA by using five forces to expand internationally in order to identify its objectives for its international business and geographic pattern of international expansion strategy. Finally, the market entry strategy is discussed by specifying the case of Japan in order to illustrate how IKEA adopts to a particular country.

EasyJet plc was founded in 1995 by Stelios Haji-Ioannou offering low cost airline services within Europe (EasyJet plc, 2013). EasyJet plc is a short-haul airline operating on over 600 routes in over 30 countries across Europe (EsayJet plc, 2014). The airline also provides additional services to its customers which include partnership with Gate Gourmet for in-flight merchandise, a tie up with Europcar for car rental services as well as agreements with Low Cost Holidays that help deliver accommodation and transfers to EasyJet customers (EasyJet, 2013). According to Macayeal (2014), EasyJet’s primary competitors include Ryanair, British Airways, Air France-KLM and Deutsche Lufthansa. EasyJet began operations in 1995 and started operating an online website in 1996. The company was listed on the London Stock Exchange in 2000 (London Stock Exchange, 2014)

In the mobile phone market buyers are more likely those who purchase handsets directly from the manufacturers in order to resell it to the end-user afterwards. There are two different types of those buyers: independent retailers such as the Carphone Warehouse and network providers like O2 (Mintel, 2012b). As the number of large network providers is limited, the bargaining power over the different market players increases. However, in order to satisfy their customers, all buyers are under pressure to offer the latest handsets which again reduces the negotiation power (Birke and Swann, 2006). The threat of buyers to integrate backwards and produce their own handsets (Porter, 2008) is realistic and can become a threat of new entrance, as the latest example of amazon shows; amazon is considering the launch of its own smartphone soon (Munarriz, 2011). According to Mintel (2012b) there are too many mobile phone outlets compared to the demand. As there are many buyers and few handset manufacturers, the switching costs for the sellers are low or do not even exist. Therefore the overall power of buyers can be classified as moderate.

Analysis of EasyJet has shown that the company is aiming to increase its customer base not only by increasing travel routes, but also by increasing additional services available through the company. Around 60 million passengers annually travel through the airline. Evidence from Porter’s Five Forces emphasises that EasyJet is attempting to continuously increase market share despite the intense competition it is facing from other short haul competitors. Due to homogeneous customer needs, EasyJet holds a market share of around 8% in the intra-European market (EasyJet, 2013). However, EasyJet is currently only involved in a small number of growth strategies. Further improvements might lead to diversification in the future. Deregulation of the industry and increased establishment of EasyJet across Europe, as seen in the analysis of Yip’s drivers of internationalisation, attracts further expansion opportunities within Europe. EasyJet is continuously expanding by increasing routes and services, thereby giving tough competition to other rivals in the industry.