Given IKEA’s success in the global market, how can it ensure continued success in the business?
II. Case Analysis
What are IKEA's competitive priorities? Describe IKEA's process for developing a new product. Cost leadership and an exceptional supply chain management are IKEA’s major competitive advantage. With the principle of “low price with meaning” IKEA is able to incorporate cost minimization in every process of developing a product that are modern, functional and a true value for money.
What are additional features of the IKEA concept that contribute to creating exceptional value for the customer? Aside from creating chic functional products at a low cost, IKEA is also keen to reducing negative impact of products in the health of its customers and the environment. Inbound and outbound logistics also contributes in making IKEA products affordable and available to its customers.
What would be important criteria for selecting a site for an IKEA store? IKEA stores and distribution areas should be close to shipping, rail and truck routes to allow a faster delivery response time which also translates to lower logistics costs. A market study should also be done to align IKEA’s array of products with customer needs. Study may include information about the location, cultural background and market condition of target area.
• Strong international brand recognition built upon a unique philosophy and low product prices. Success has been driven from the price architecture offering value to the customer in innovative but functional products. • Total control of its design and pricing. Supply of product ranges globally as well, thus, a product portfolio that caters to most consumer lifestyles who are likewise budget conscious....