IKEA’s Competitive Strategy

IKEA’s Competitive Strategy 1
IKEA’s Competitive Strategy
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IKEA’s Competitive Strategy 2
Introduction.
IKEA, a Swedish furniture company, is a global renown furnish company that is built on
the concept of offering functional home furnishing products and well-designed furniture products
for low prices. IKEA’s vision is to “create a better every day for many people”, and the main
business concept behind IKEA has supported this vision for many years (Panagiotaropoulou,
2015). This essay revolves around the discussion on IKEA’s competitive strategy. Besides, an
evaluation of how the marketing strategy and operations strategy supports the competitive
strategy in IKEA will be highlighted. In this evaluation, various points will be highlighted. They
include; competitive strategy at IKEA, marketing strategy at IKEA, operations strategy at IKEA,
and the relationship between competitive, marketing and operations strategy.
Competitive strategy at IKEA.
Over the years, IKEA has managed to remain a market leader in the furniture space,
kitchen appliances and other home accessories (Dudovskiy, 2017). This dominance is as a result
of the company’s competitive strategy. IKEA observes the following competitive strategies. One,
we have cost leadership. This strategy refers to where a firm reduces the cost of services or
products so as to be an above-average performer. IKEA sells its products at equivalent or lower
prices than its competitors. Besides, IKEA integrates technology and economies of scale in its
efforts to offer low priced products (Dudovskiy, 2017).
Two, we have product differentiation. IKEA incorporates a product portfolio of about
9,500 products since the company renews its product range annually (Dudovskiy, 2017). This
provides customers with what they need at a fair price. Besides, the company is increasing its
presence in the catering and food industry, therefore, the company is able to tap into new markets

IKEA’s Competitive Strategy 3
with a high success rate. Fourthly, we have the branding image. Due to its growth, success and
customer satisfaction experience, IKEA has grown its brand image exponentially and therefore;
the company has managed to engage in new market development aggressively. Customer loyalty
among IKEA stores has grown tremendously. Lastly, we have focus. This strategy is particularly
different since it rests on the choice of narrow competitive scope (Salavou, 2015, pg. 84). In this
case, IKEA is focused on providing stylish furniture at affordable prices. This is daunting for
competitors since for them to trade cheaply, they must benefit from economies of scale which is
hard since IKEA has the advantage of purchasing high volumes of products globally from
suppliers.
Marketing strategy at IKEA. (Target market, marketing mix and positioning)
IKEA’s marketing strategy is highly sophisticated since the company evaluates different
metrics to ensure high performance and success rate. IKEA offers a broad range of functional
and well-designed home furnishing products at low prices to a broad target market (Bhasin,
2018). The company targets all individuals from different geographical locations, ages and sexes
through a differentiated targeting strategy. This form of targeting sets out to satisfy the wants and
needs of customers who are in search of value in exquisite furnishing solutions and other
products.
IKEA continually keeps on adapting to changes in the business environment. The
company controls its marketing mix in such a way that customers are highly attracted to the
products they offer at all times. Beginning with the pricing, IKEA has adopted a methodology of
selling fantastic products at affordable prices (Bhasin, 2018). This fact has increased customer
retention rate and loyalty. Besides, the pricing structure of the company gives it a competitive
advantage in terms of gaining more customers and higher profits. Secondly, we have place.