From the company's description and achievements, it is evident that IKEA is the leading furniture retailer in the world. It was founded in 1943 by Ingvar Kamprad at the age of 17 years. Since 1943, the company has risen to its current state, being the leading furniture retailer in developing countries. The company provides well-designed furniture products at relatively lower prices. The company operates 445 stores across the world.
Strategic Alternative Assessment Recap
Given the information provided from IKEA's SWOT analysis, it is evident that it utilizes alternative strategic assessment. The company uses the SWOT analysis to establish its strengths, weaknesses, opportunities, and threats. IKEA identifies the customer population as one of its strengths. They make it more robust by using a multi-channel approach retailing technique, a vital negotiation power source (Wu et al., 2018) . The company is focused on creating sustainable development, which, on the other hand, would contribute to boosting the brands' value and increasing the level of trust with their customers. Since the company deals with a wide variety of furniture products, if there is a recall of one of the products, it would confuse and portray a bad image on its reputation.
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The company's market is growing every day since it is widely known around the world. By opening new branches and expanding its existing branches, the company exploits competition, creating new opportunities. The company's sales have been boosted by introducing new technology worldwide, which has grown online sales. The SWOT analysis enables the company to plan on the actions to take due to the high competition from the new entrants ( Al Shuwaler et al., 2020) . The company also is faced with the threat of being exposed to lawsuits. Despite the threats IKEA faces, it enjoys the complete advantage they have over their competitors. The company, through the creation of opportunities, manages its strategic variable and maintains competitive advantage. Therefore, the company takes advantage of the SWOT analysis to turn its threats and weaknesses into a powerful weapon to maintain a competitive advantage that its competitors cannot sabotage.
Strategic Alternatives & Associated Risks Infor Gap
IKEA's strategic alternatives that were previously discussed give the company its value. The company's objective is to increase its products by utilizing high-quality materials while maintaining cost-effective prices for all consumers. By opening many stores worldwide, IKEA's analysis shows that the higher consumer demand indicates that the company has a high following. Such small stores exhibit a wide variety of large furniture stores, but they occupy a small space. Through opening many stores, IKEA offers a high level of competition with established stores in the world like Walmart. The company's strategy of establishing strategic alliances is beneficial since its partnerships can bridge the company and its customers ( Alenezi et al., 2019) . This means that the company has a vision of creating a better life for people who possess the core values of change, regeneration, and co-existence with IKEA. IKEA's alliance's vision must align with the company's vision to address the challenges that may arise and accommodate the company's growth. This way, the company would effectively progress if the right operational decisions are made, which requires input from the allies.
Financial Analysis Recap
IKEA's financial analysis proves that the company is well known all over the world. Its financial ratios determine a company's product qualities and financial situations. The company maintains a financial ratio increase of 7.3 percent of net profit in 2020, which is used to determine the company's product quality and financial position ( Al Shuwaler et al., 2020) . The company's current ratio, which is determined by current assets compared to current liabilities, is the primary liquidity ratio, which means that the company can meet its financial abilities. The company's profitability ratio indicates an increase of 1.41 % compared to the previous year ( Al Shuwaler et al., 2020) . The company also enjoys a high stakeholder's equity ratio, which means that the company increased its asset proportion which entirely was dependent on stocks rather than debts. By analyzing IKEA's financial analysis, it is established that the company is more stable compared to its competitors. It is therefore recommended to invest in management skills to improve that ratio.
Financial Assessment Update
Potential investors, before taking any actions they are required to take a look at their financial position so that they can understand the business. If a company's financial situation is not pleasing, the investors must change their strategy and take steps that consider the financial position in the market value relationships. IKEA has risen and became a giant retail shop in the world. The company's assessment establishes that there are financial challenges that the company has faced recently, which means that the company has to reevaluate and reconsider its business path. In 2020 the company saw a drop in its profits due to the outbreak of COVID 19, which led the company to decide on giving its employees unpaid leave ( Al Shuwaler et al., 2020) . IKEA is not giving up any soon without considering the company's product strategy, which makes it remain relevant in the market. If IKEA adjusts to the current effects, then their retail sales would increase by 4.5%. There would be no much change in my analysis since the financial analysis revealed the company had improved in key profitability, liquidity, leverage, and activity ratios. Therefore, the company is on the right trajectory to higher earnings and profitability. The company has recorded a reduction in the cost of raw materials, and the decline has resulted in higher gross margins, which will reflect in the 2020 financial statements. That is advantageous to the company because it will enhance its financial strategy of offering affordable and quality furniture through competitive pricing.
Decision Matrix Applicability
A decision matrix is an evaluation tool that can contribute to visualizing the solutions to challenges a company is facing and determining their significant factors. The decision matrix does not only help the company to make the best choice, but it also helps the company prioritize tasks, problem-solving, and justification of decisions made. For example, if IKEA made a strategic alternative to open new stores, employing a decision matrix would be the best alternative approach in guiding the company through that decision. By pursuing this alternative, IKEA will consider potential financial implications ( Alenezi et al., 2019) . The decision matrix acts are an effective tool for assessing risks associated with various decision alternatives because each alternative is evaluated empirically. The option picked represents the best in terms of risks and benefits. The decision matrix acts as an effective tool for forecasting future risks since the company only needs to assess the situation from a logical point of view and get equivalent variables to measure. In the alternative strategic assessment, the decision matrix recommendation for a strategic alliance emerged as the best strategy considering the multiple conflicting factors.
Risk Matrix
The probability or risk matrix impact is one of the most effective techniques contributing hugely to risk assessment by determining the likelihood or probability of cruelty associated with the project's potential risks. IKEA has to analyze the risk matrixes that would significantly impact the company's operation. Marketing risk is the first risk associated with strategic alternatives the company should take into consideration. The company should invest in an effective product promotion program to ensure the company's furniture products are marketed and reach the intended customers (Al Shuwaler et al., 2020). The second risk the company should consider is innovation risk. The company should be ready to adapt to new practices by thinking conservatively. The third risk is a competitive risk. In recent years there has been stiff competition from furniture products stores due to new entrants. The company should try its best to remain relevant in the market. The fourth risk is operational risk. Operational risks are a result of insufficient or failed processes like customer service processes. Therefore, the company should be ready to deal with this risk.
The fifth risk is a security risk. Insecurity is a significant threat to the company's operation, which would require the company to invest heavily in security. The sixth risk is compliance risk. The company may fully intend to follow the rules and regulations, but it may break the law due to errors in some cases. The seventh risk is liquidity risk. The liquidity risk may occur when the company fails to meet its short-term debt obligations. The company should therefore be ready to convert its assets into cash without touching its capital. The eighth risk is regulatory risk. This risk occurs when there is a change in legislation or regulations that would affect the company. If IKEA signs a contract with another company, the company should be ready to adapt to any changes that would arise (Al Shuwaler et al., 2020). The ninth risk is infrastructure risk. This risk may occur if the company makes losses due to failure to handle its structures carefully. Finally, the tenth risk the company should take into consideration is economic. This risk is caused by the possibility that a financial condition would increase its cost or reduce its sales. If IKEA takes into consideration the risk matrix, then it would make a positive turn.
Critical Risk Impacts
The risks with significant risks to the company are the competition risk and compliance risk. The strategic alliance involves sharing critical data for both companies that the competitor may use to his advantage if the coalition fails. The strategic partnership has to be formed in critically evaluated phases to minimize the possibility of failure. Besides, allying with a competitor operating in a different country will have its taxation and compliance implications. Achieving licensing and taxation regime compliance requires the management to engage reputable consultants because countries impose punitive punishments for regulatory non-compliance for corporates, which may negatively impact the company's financial position. If the company utilizes the analysis of these risks, it can have a platform to develop strategies that would address possible shortcomings ( Alenezi et al., 2019) . The company should not ignore the risks and should therefore take into consideration their impacts.
Conclusion
IKEA provides a variety of furniture products at a relative price compared to their competitors, but they understand the market trend. In recent years the company has experienced extensive growth due to its affordability. The company also considers all people from various age groups, which makes the company well known worldwide. The company has therefore proved that it can satisfy everyone's needs. Looking at IKEA's financial analysis, it is evident that the company is still relevant despite the challenges and threats.
References
Al Shuwaler et al., (2020). IKEA's corporate social responsibility. International Journal of Tourism and Hospitality in the Asia Pacific , 3 (2), 70-77.
Alenezi, S., Al Mutairi, N., Alenezi, S., & Münzer, S. M. (2019). Analysis of IKEA's internationalization strategy. Journal of the Community Development in Asia , 2 (3), 16-28.
Wu, Q., & Peng, J. (2018, November). Enlightenment of IKEA's Multinational Operations to Chinese Enterprises. In 2018 5th International Conference on Education, Management, Arts, Economics and Social Science (ICEMAESS 2018) (pp. 885-890). Atlantis Press.
