Analysis: Ikea

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In this case of Ikea, they adopted the cost leadership strategy and product differentiation to their business model. In order to maintain cost leadership in the market, internal production efficiencies must be greater than that of competitors. Under Ikea's strategy, suppliers are usually located in low-cost nations, with close proximity to raw-materials and reliable access to distribution channels. These suppliers produce highly standardized products intended for the global market, which size provides the firm with the opportunity take the advantage of economies of scale factors. Ikea's role is not only to globally integrate operations and centrally design products, but also to find an effective combination of low cost, standardization, technology, and quality. Due to large product range Ikea has achieved economies of scale and scope, as waste of resources is a sin at Ikea. It provides a secure delivery system to its supplier this way it has achieved economies of scope. It is simply when a company seeks to produce the same product more efficiently and at a lower cost than its competitors. This can be achieved through economies of scale, innovations in production & distribution, lower raw materials cost. It often a company seeking a cost leadership strategy will aim for a broad market scope in order to satisfy economies of scale. The Ikea introduced self-service and cash-and-carry concepts. Also, it provided many services such as in-store services, home furnishing advice, kitchen Installation, assembly service etc... For Ikea delivery services, if buyers need assistance getting their purchases home, they can help arrange door-to-door delivery by an independent delivery company for a small fee. It integrated set of actions designed to produce or deliver goods or services with features that are acceptable to customers at the lowest cost, relative to competitors. Ikea's no-frills warehouse-type retail outlets keep prices down by making customers does all the work....
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