The Strategy Adopted by Ikea
1 Explain, in details, the strategy adopted by IKEA, and how it successfully did the positioning.
*** At business level strategy
Focus Strategies
By implementing a cost leadership or differentiation strategy, IKEA choose to compete by exploiting their core competencies on an industry-wide basis and adopt a broad competitive scope. Alternatively, IKEA can choose to follow a focus strategy by seeking to use their core competencies to serve the needs of a particular customer group in an industry. In other words, IKEA focus on specific, smaller segments (or niches) of customers rather than across the entire market. Focused Business Level Strategies involve the same basic approaches as Broad Market Strategies.
Focus strategies can be based either on cost leadership or differentiation.
Focused Cost Leadership Strategy
IKEA that compete by following cost leadership strategies to serve narrow market niches generally target the smallest buyers in an industry (those who purchase in such small quantities those industry-wide competitors cannot serve them at the same low cost). Global furniture retailer IKEA provide customers with “affordable solutions for better living” through use of the focused cost leadership strategy. The company offers home furnishings that combine good design, function, and quality with low prices. IKEA does this by offering low-cost, modular furniture (assembled by customers), using self-service as an alternative to having sales associates follow and pressure customers to buy. IKEA displays its products in room-like settings so that customer can view different combinations of furniture, eliminating the need for assistance from sales associates or decorators to visualize the setting and reducing employee costs. Customers also pick up their own purchases to reduce the company’s costs. Finally, stores address the needs of shoppers (e.g., extended hours and in-store childcare) while they shop.
Focused Differentiation Strategy
IKEA following
*** At business level strategy
Focus Strategies
By implementing a cost leadership or differentiation strategy, IKEA choose to compete by exploiting their core competencies on an industry-wide basis and adopt a broad competitive scope. Alternatively, IKEA can choose to follow a focus strategy by seeking to use their core competencies to serve the needs of a particular customer group in an industry. In other words, IKEA focus on specific, smaller segments (or niches) of customers rather than across the entire market. Focused Business Level Strategies involve the same basic approaches as Broad Market Strategies.
Focus strategies can be based either on cost leadership or differentiation.
Focused Cost Leadership Strategy
IKEA that compete by following cost leadership strategies to serve narrow market niches generally target the smallest buyers in an industry (those who purchase in such small quantities those industry-wide competitors cannot serve them at the same low cost). Global furniture retailer IKEA provide customers with “affordable solutions for better living” through use of the focused cost leadership strategy. The company offers home furnishings that combine good design, function, and quality with low prices. IKEA does this by offering low-cost, modular furniture (assembled by customers), using self-service as an alternative to having sales associates follow and pressure customers to buy. IKEA displays its products in room-like settings so that customer can view different combinations of furniture, eliminating the need for assistance from sales associates or decorators to visualize the setting and reducing employee costs. Customers also pick up their own purchases to reduce the company’s costs. Finally, stores address the needs of shoppers (e.g., extended hours and in-store childcare) while they shop.
Focused Differentiation Strategy
IKEA following