IKEA's Competitive Strategies: Operations and Marketing Management

[Date]
B207A- Shaping Business Opportunities I
Institutional Affiliation(S)
Student Name

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Essay
Introduction
IKEA, a well-known international brand has strategic business units in almost every
country across the globe. The business strategy of all its units follow common objectives i.e.
provide low-cost furniture and performing better than any other competitor in furniture
industry (Harapiak, 2013). IKEA has few weaknesses also pertaining cost differentiation
strategy that makes many of its customer doubt regarding product quality and thus Brut, Ulf
& Asa (2011) argues that cost differentiation may not provide companies with benefit always.
This essay will make detailed discussions about IKEA’s competitive strategies along with its
operations and marketing management techniques that helps the company gain competitive
position in furniture industry.
Body
The case presented clearly shows that IKEA comprises efficient management and
strong relationships with its suppliers as well as customers due to which they are able to
provide best offers required for gaining competitive position. Cost reduction is another
significant technique seen in IKEA’s competitive strategies. At present, IKEA works with as
many as 1,800 suppliers that provides the company with necessary raw materials at
reasonable rates. In fact, IKEA outsources most of its manufacturing work also that helps the
firm in developing low-cost operations (Abrahamian, 2013).
Stores of IKEA is another advantage that makes brand IKEA prominent in the
marketplace as given in case analysis. The product design strategy of IKEA follows
functional as well as flat packed style, without compromising on quality that helps in
reaching targeted demographics. Another effective competitive strategy of IKEA can be
highlighted through its optimised furniture designs that most of its competitors lack along

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with providing design advisory and catalogue that ads to value-added strategy for IKEA.
With effective marketing strategy combined with efficient operations management, the
company has gained superior competitive position over its competitors like Walmart,
Amazon, etc (Sandybayev, 2017).
Market positioning and targeting segment of IKEA shows series of relevant decisions
made by the company pertaining to marketing strategies thereby fulfilling core organisational
objectives and competitive advantage. According to sustainability reports, it can be said that
the company follows every possible method that shows corporate social responsibility along
with anticipating economic development within the countries IKEA operates in (IKEA,
2018). In Asia, the marketing strategy mainly focus upon middle income group as their
people usually selects products on the basis of pricing and functionality. However, in Europe
and US, IKEA targets lower income groups who are able to buy IKEA products easily. This
shows that IKEA follow mono-segment positioning by offering products range and pricing
according to the customer segment in diversified countries (Abrahamian, 2013).
IKEA’s marketing mix strategy demonstrates its pricing, distribution and promotion
related strategies that assists company while building competitive strategy. Pricing strategy of
the company, as discussed earlier follows low cost furniture than provided by its competitors
and supermarket stores (Sandybayev, 2017). The case analysis reveals that low pricing
techniques of IKEA constitutes in achieving core vision and mission of IKEA’s business
concept. However, low pricing detains upper income groups from buying IKEA products as
they remain doubtful regarding product quality and common design for all.
Distribution strategy in marketing mix represents a network of partnership between
consumers and suppliers including various intermediaries like retailers and wholesalers,
presenting the pathway of moving products to end users (Durmaz & Dusun, 2016). The