Competitive Strategy of IKEA Australia: Analysis and Corporate Strategy

This report analyzes the competitive strategy of IKEA Australia, including their international corporate level strategy and mode of entry. It also discusses the company's general environment segmentation and strategies for growth.

IKEA Australia
Assignment 2
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Executive summary
IKEA is the organization that is having most effective and innovative competitive strategy within
the market. It provides the most valuable working function within the market which is effective
for maintaining the situation inside the field and to deliver the suitable operational purpose
within the market. The organization has real general segmentation within the market along with
the international corporate level strategy and the international modes of entry in the market. The
organization has the effective opportunity to grow in the international market with the help of the
strategy and their competitive strategy provides suitable advantages within the market to deal
with the customers and also with the employees of the firm.
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Table of Contents
Introduction.................................................................................................................................................3
Firm Overview........................................................................................................................................3
Competitor Analysis....................................................................................................................................3
Company Analysis......................................................................................................................................4
General environment segmentation.........................................................................................................4
The international corporate level strategy of IKEA.................................................................................4
International mode of entry.....................................................................................................................5
Strategies.....................................................................................................................................................6
Conclusion...................................................................................................................................................7
References...................................................................................................................................................8
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Introduction
The competitive strategy of the firm within the marketplace allows developing suitable and
effective working function within the field. To effectively understand the various process of the
key aspect of the competitive strategy the organization and the case of IKEA Corporation is
being selected along with the corporate strategy to understand its application within the firm. The
report also provides the effective view on the analysis of the firm also the working function that
is being utilized by the firm within the market. The paper also provides the view of the strategies
that are being utilized by the organization within the market.
Firm Overview
IKEA is the furniture manufacturing company which is the Netherland based Swedish
organization in the market (IKEA, 2018). The organization was founded in the year 1943 and by
the year 2000 they have become the largest retailer of furniture in the world. The company in the
current state is present in 44 countries all over the world and they provide ready to assemble
products to the market which is quite innovative within the market.
Competitor Analysis
IKEA is the furniture manufacturing company and they are having huge competition within the
market. The organization design as well as sells the ready to assemble furniture within the
market. The biggest competitor of the firm is Walmart, then the Wayfair, Sears, American Wood
mark and so on. In the market, most of the company sell ready to assemble furniture to their
consumers as it is durable and also easy to maintain in the household (Brewster, 2017). The level
of competition for the firm is quite effective as it helps the firm to maintain their competitive
advantages within the market. Competition well in the market is quite effective where the
organization can effectively maintain their activity and their action for performing within the
market. Like the organization, Wayfair is the company that sells stuff online and their primary
products are the décor items as well as the furnishing items for the home. Then another
competitor of the firm is Sear which is also considered to be the biggest competitor of the firm
(Chung, and Kuo, 2018). The organization provides various furniture that is suitable for lawn,
outdoor living, and garden and so on. In the level of competition, the organization is having an
effective working function to maintain their competitive advantages within the field.
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Company Analysis
General environment segmentation
IKEA is having the general segment for performing their task within the market in the most
suitable and effective way. It can be seen that the organization in their demographic
segmentation maintain the elements for the low household income, then the large population size
along with the dense population and the large income gap (Grant, 2016). In the economic
segment that has provided an effective view of the fast-growing condition then regulation as well
as FDI policies issues within the political segment and so on. It is efficient for the business to
uphold their action in the field of Australia and deliver valuable operational function. Proper
segmentation in the field allows the firm to uphold their competitive dynamic skill in the
marketplace and also it is essential to develop effective knowledge for the firm (Ferreira, Santos,
de Almeida, and Reis, 2014). It is clear from the demographic segmentation and other
segmentation of the firm that they effectively utilize the corporate strategy in their field.
General environment segmentation in the field helps the firm to maintain their mission and
vision as well as the corporate goal of the firm in the most effective way. The corporate strategy
regarding the brand position helps the firm to preserve their operational utility inside the arena
and also help them to segment according to the brand position (Rugman, and Verbeke, 2017).
For example; Lexus, as well as Rolex, maintain the brand position of the luxury brand for their
corporate business strategy and for that their target market is the people with high-income level
and also the sophisticated consumers. It is reflected that the association have effectively
improved their operating cost along with the cost of sale within the market. This is the basic
function that helps the firm to open new market within a various international market.
The international corporate level strategy of IKEA
The international strategy allows the firm to sell their services as well as their products to the
international market. IKEA also pursue the effective international corporate strategy to improve
their competitiveness within the market. It can be seen that the international market help to bring
new opportunity for the firm (Liu, and Atuahene-Gima, 2018). This is the vital reason that the
organization uses the international strategy to expand their business. With the help of the
international strategy at the corporate level, the organization can effectively secure their
resources within the market. It can be seen that IKEA is the largest retailer of furniture in the
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world and for that, they need huge resources that also at the lowest possible price (Samli,
Kaynak, and Sharif, 2015). The corporate strategy in the international market allow the firm to
gain their opportunity and due to this, the competitive effectiveness is being developed within
the business.
The international corporate strategy also helps in the growth of the firm in the global market
since 2001. The organization maintains the global corporate strategy for performing their activity
within the field that helps them to maintain their working function. For example; Walmart uses
the global corporate strategy in their business to expand their trade and also to get the effective
opportunity for the growth of the firm. Like the company Walmart the organization, IKEA also
performs the same activity to maintain their growth level within the market. The competitive
advantage that is maintained by the firm is to provide the furniture in the flat package to reduce
the space and also the cost of delivery (Cusumano, Kahl, and Suarez, 2015). This is one of the
most suitable corporate strategies that is being followed by the firm to uphold their movement
within the field. The organization also need to develop their activity in the international market
with the effectiveness and their work.
International mode of entry
International mode of entry into the global market is effective for the firm in order to boost their
desired growth and productivity (Nagle, Hogan, and Zale, 2016). The most suitable and the
effective market entry mode that is being utilized by the organization is wholly owned subsidiary
as provided within the case study. This helps the company to build their retail space within the
market and also to implement the international corporate strategy within the field (Prajogo,
2016). This situation has various advantages as well as disadvantages within the market for the
firm and IKEA maintained working performance within the field. The global corporate strategy
is effective for the firm when they are facing huge pressure from the market to reduce their cost
along with the week pressure for providing effective response locally. This strategy allows the
firm to retain their growth within the global market.
The implication of the corporate strategy within the field provides suitable and effective working
function within the marketplace to deal with the working function in the marketplace. It is
evaluated that the firm with the suitable and actual global corporate strategy can effectively
maintain their working function within the market. For example; Ford maintains the wholly
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owned subsidiary in the global market and for that, they get effective marketing benefit within
the international market that is effective for the enterprise. The organization IKEA is also having
an effective working function within the market where the corporate level strategy is being
performed to maintain their activity in the field (Quer, 2015). It is the most effective and the
suitable process that allows the organization for maintaining their activity in the field and to
deliver the product to the market. The business process of the firm is quite effective to preserve
the movement of the enterprise in the international market.
Strategies
The association IKEA is facing huge challenges within the international market where they are
facing the issue of availability of the retail space along with the cost of the market. Then the
organization is also facing issue regarding supply chain as well as the hiring the employees and
so on. The organization is performing a various working process within the firm and for that,
they are having effective business in the field of international market (Johnson, 2016). The
corporate strategy that is being utilized within the organization effectively help them to continue
their operation in the arena and offer valuable communication for the process. According to the
implementation of this strategy within the firm and from the view of case it is identified that the
association is having two choices concerning their retail space within the market. With the
application of the corporate strategy in the field, that IKEA has developed suitable and effective
working function within the market. It is critical for the firm to perform their movement while
maintaining their mission and their vision strategy within the market. This is one of the most
effective strategies for the firm to perform their activity within the field (Andersen, and
Andersson, 2017). With the help of the corporate strategy, the firm has the ability to hire suitable
employees for the firm as well as to negotiate with the vendors of the firm. It is the most
effective and the suitable way to perform their activity within the field for performing the various
job.
The organization primary follows the vertical integration as their corporate strategy for the field.
In this, the firm has the successful corporate strategy for the development of products as well as
marketing process within the firm (Mollan, and Tennent, 2015). It can be seen that the firm is
having most suitable and effective working function in the field with the help of vertical
integration in the international market. For example; gas station organizations are effective in the
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field for acquiring the oil refinery. Another example is that the food industry maintains their
corporate vertical integration strategy in the most effective way by providing valuable and
integration process within the firm. It can be seen that the firm to maintain their activity in the
field. The corporate strategy in the international market is quite effective for the firm to maintain
their activity in the field and to provide the valuable working process for the firm. The working
process of the firm in the international market provides the valuable working function to uphold
their activity and the working function within the field. It is reflected that the firm is having an
effective work within the market. IKEA needs to maintain their working function in the
international market for maintaining their effective working function within the field to deliver
the vital operational process within the market (Purce, 2014). The case study provides the
effective view of the firm working function in the international market to understand their value
and their production level.
Conclusion
The paper eventually concludes the facts that the organization maintains the corporate strategy in
their most of the working process. It clearly indicates that the success of the firm is due to the
utilization of the process in the market. Moreover, the product and the presentation level of the
firm along with their growth are directly affected by the international corporate strategy within
the field. It clearly concludes the fact that the business gets suitable opportunities with the
utilization of the international corporate strategy in the market and the business process.
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References
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competitive strategies of product firms. Strategic management journal, 36(4), pp.559-575.
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Prajogo, D.I., 2016. The strategic fit between innovation strategies and business environment in
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