IKEA Case Study: Key Drivers of Innovation and Competitive Strategies

This case study provides a comprehensive analysis of IKEA's business strategy, focusing on key drivers of innovation, including broadcasting, brainstorming, and expert teams. It evaluates the approaches undertaken by IKEA, such as continuous product and process improvement, upgrading the business model, and the use of new technologies. The study also examines IKEA's competitive strategies, including low prices, brand image, and cost efficiency, as well as marketing, supply chain management, international presence, and product design. Furthermore, it explores the application of the Blue Ocean Strategy, offering insights into how IKEA can maintain its competitive advantage in the market. The analysis covers various aspects of business development, providing valuable insights into how IKEA can enhance its performance and achieve its future goals and objectives.

Case Study

Contents
INTRODUCTION...........................................................................................................................................3
MAIN BODY.................................................................................................................................................3
Key drivers of Innovation.........................................................................................................................3
Evaluation of approaches undertaken by IKEA........................................................................................4
Competitive Strategies............................................................................................................................5
Application of Blue Ocean Strategy.........................................................................................................6
CONCLUSION...............................................................................................................................................8
REFERENCES................................................................................................................................................9

INTRODUCTION
Business Strategy refers to the use of specific approaches and methods which can be
helpful in ensuring that the Businesses are able to attain a specific advantage in the future in the
right manner (Bhattacharyya, 2020). Therefore, In this way it can be said that it is quite crucial
for the Businesses that they are able to make use of the appropriate approaches and methods so
that the attainment of the overall goals and objectives can be made quite effectively and
efficiently. This report will focus on IKEA. It is a company which provides its customers with a
lot of products and services in the market. It has to develop its Business Strategy for the future so
that it is able to attain the future goals and objectives. Therefore, in this assignment a detailed
and specific focus will be made on the different parameters of Business Strategy which can be
used in the future. A discussion on all of them will be made as a part of this project.
MAIN BODY
Key drivers of Innovation
There are different types of key driver of innovation which are present within a particular
organization (Cavus and et.al., 2020). Therefore, it is quite important for IKEA that detailed
discussion of these key drivers can be made. An explanation of these key drivers is as follows-
Broadcasting- It is an important driver of innovation. Through its use the organization
are able to make sure that they can effectively and efficiently search for the innovations which
can be brought in the new products and services and which can be quite useful for the various
types of customers which are present within the market. Therefore, it is quite important that the
management of IKEA is able to ensure that the use of this particular driver can be made so that
the opportunities for bringing innovation can be used quite appropriately in the right manner.
Brainstorming- It is also an important driver of innovation. By making its use, the
organizations tend to make sure that they are able to give some employees the responsibility of
thinking over new ideas which can be used in order to make sure that the customers can be
targeted with new products and services which will be helpful in ensuring the enhancement of
the overall level of profitability (Heshmatisafa, 2020). IKEA therefore needs to make sure that it
provides some of its employees to Brainstorm which will help it a lot in ensuring that the
employees are able to develop new ideas which can be useful in the future.
Licensing out- It is another important driver of innovation. Therefore, by making its use
the firms can make sure that they are able to identify the scope through which they are able to
target a higher-level of growth effectively and efficiently in the right way (Jelassi and Martínez-
López, 2020). IEKA therefore needs to make sure that it can make use of this strategy as it will

provide the appropriate ideas of innovation so that the attainment of the future goals and
objectives can be made in the right manner.
Connecting- It is also an important driver of innovation (Kitsios and Kamarioto, 2021).
Thus, by making its use the organizations are able to make sure that their employees are able to
connect through using effective communication skills and thus this will be quite helpful for them
to be able to attain the goals and objectives in a right way effectively and efficiently. IKEA has
to make sure that its workers are able to connect with the different types of opportunities so that
the attainment of a higher-level of efficiency and effectiveness in the development of new
products can be achieved.
Expert teams- It is also an important driver of innovation in the organizations. Thus, it is
quite important for the firms that they are able to make the use of these teams so that the new
ideas can be developed and can be applied appropriately. In the context of IKEA, it is quite
important to make sure that the development of these particular teams can be done which will be
quite helpful in ensuring that the development of the overall level of efficiency and effectiveness
can be carried out.
Thus, these are the main drivers of innovation through which IKEA can make sure that it
can bring in new products and services within the market which will be quite helpful for it to be
able to ensure that the attainment of the goals and objectives in the short-term, medium-term and
long-term can be carried out. This will be quite important in order to make sure that the
improvement in the specific processes can be made and the functioning can be made better. This
will be crucial in ensuring that the overall level of efficiency and effectiveness can be managed
in a proper manner within the different companies.
Evaluation of approaches undertaken by IKEA
There are different types of approaches which can be undertaken by IKEA which will
help it in ensuring that the innovation can be brought in the Businesses. The approaches which
can be used by IKEA are explained as follows-
Continuous Product and Process Improvement- It is important for the Businesses that
they are able to use it as an approach which will help in providing better products to the
customers (Koh, 2020). Therefore, its use can be made by IKEA for the purpose of ensuring that
it is able to bring Innovation by launching new products and bringing new processes.
Improving the Product Design- It is quite crucial for the Businesses that they are able to
bring substantial improvements in the Product Design which will help in attracting the attention
of the customers. Therefore, for an organization like IKEA it is quite important that it can be
used so that the attainment of the overall goals and objectives can be carried out in a proper
manner. Thus, it is quite crucial for the companies like IKEA that they bring substantial

improvements in this manner for the future so that the efficiency and effectiveness can be
developed in a proper manner.
Upgrading the Business Model- Business Model is required to be updated by the
Business Organizations (Kong and et.al., 2020). By doing so they will be able to ensure that they
are able to manage the different types of operations in a proper manner in the firm. For an
organization like IKEA, it is quite crucial that it is carried out so that it is able to find out
innovative opportunities and can implement them. This will thus help it a lot in ensuring that the
higher-level of efficiency and effectiveness can be managed in a proper manner.
Use of new technologies- Through the use of new technologies the Businesses can make
sure that they can bring in new products and services for the purpose of innovation. In the
context of IKEA, it is necessary that their use can be made so that the company is able to ensure
that it can create new products and services according to the changing needs and requirements of
the various types of customers in the market. This will thus help in increasing the level of
profitability and will also lead towards ensuring that a strategic edge can be obtained over the
various types of competitors in the market.
Competitive Strategies
An organization has to make sure that it is able to make the use of various competitive
strategies in the market (Kristinae and et.al., 2020). This is helpful in ensuring an attainment of a
strategic edge over the different types of competitors in the market. Therefore, it is quite
important that the use of the following competitive strategies can be made by a company like
IKEA-
Low prices- It is the most effective strategy which can be used by the organizations (Lin
and et.al., 2021). Through the use of this strategy, an organization like IKEA can make sure that
it is able to set low prices for its goods and thus can attract the customers so that they are able to
purchase its goods. Therefore, in this way this will help the company a lot in ensuring that it is
able to attain a much-required strategic edge over the competitors in the market.
Brand image- It is another effective strategy which the firms can use in order to gain an
edge over the various types of competitors in the market. In IKEA, it is crucial that the Brand
Image can be enhanced which will thus be quite useful for the company in ensuring that it is able
to become successful in the implementation of its strategies in the market quite effectively and
efficiently.
Cost efficiency- It is also an important strategy which the organizations use for the
purpose of ensuring that the management of the costs can be done (Misra and Sharma, 2020). For
a company like IKEA, it is quite crucial that the use of this strategy can be made for ensuring
that it is able to reduce the costs which are being incurred by it to produce the goods which will
help a lot in ensuring an attainment of the future goals and objectives.

Marketing- It is also a strategy which can be used by the organizations to attain a
strategic edge over the competitors in the market. In IKEA, its use is quite helpful in ensuring
that the marketing activities can be executed appropriately for attaining the future goals and
objectives.
Supply chain- It is quite important for the Businesses that they are able to use their
supply chains in a better manner by bringing substantial improvements in it so that the
management of the work can be done appropriately. Therefore, IKEA can make its use so that it
is able to increase the overall efficiency and effectiveness of its Business so that it can attain a
competitive edge over the various types of competitors in the market.
International presence- It is very necessary for the Businesses that they can identify the
opportunities to target an expansion abroad (Moktadir and et.al., 2020). This will help them in
expanding their market and enhancing the level of profitability. Therefore, for an organization
like IKEA it is quite important that it can identify the various types of opportunities which are
present abroad and make use of the appropriate strategies and methods so that it can mark its
presence in the foreign countries. This will thus be quite helpful for the company in ensuring that
it is able to ensure that it can mark its presence in the International Countries and thus make sure
that it can expand its range of operations there. This will lead towards attainment of a much
required strategic edge over the competitors in the market.
Design, quality and range of products- It is essential for the organizations to put their
focus at Design, quality and range of products which are provided by them to the different types
of customers in the market (Rosolen and Comini, 2020). Thus, for the organizations like IKEA it
is quite important that it can focus on these aspects which will thus help in ensuring that the
relevant improvements can made in the products so that the competitive edge is obtained over
the various competitors in the market.
Using aggressive marketing and promotion methods- For the organizations, it
becomes quite essential that they are able to make the use of aggressive marketing and
promotion methods so that they can ensure that they are able to secure a competitive edge over
the wide range of competitors in the market. In the context of IKEA, it is very important that the
use of these methods can be made which will thus lead towards ensuring that the different types
of improvements can be made and implemented so that the profitability level can be enhanced.
Thus, these are some of the strategies which can be used by IKEA for the purpose of
obtaining a much-required strategic and competitive edge over the different types of competitors
present in the market. For an organization like IKEA, it will be quite helpful to make sure that it
is able to attain its future goals and objectives quite effectively and efficiently in a proper
manner.

Application of Blue Ocean Strategy
Blue Ocean Strategy is a strategy in which the focus is on ensuring that there is a
simultaneous pursuit of differentiation and low cost which can open up a new market space and
therefore can create a new demand within the market. Therefore, the use of this strategy is
recommended for IKEA so that it is able to make sure that it can attain the future goals and
objectives in an appropriate manner. The application of this particular strategy can be made by
IKEA so that it is able to get ahead of its competitor in the market. Therefore, in this way it will
be able to make sure that it can enhance its overall profitability level to ensure that the strategic
edge can be obtained over the competitors in the market. The application of this strategy can be
done in the following manner-
Product Differentiation- IKEA has to make sure that it is able to differentiate its
products from its different types of competitors which are present within the market (Sadjiarto,
Hartanto and Octaviana, 2020). Therefore, it is highly necessary that the use of this particular
strategy can be made for the purpose of ensuring that the company is able to attain its goals and
objectives in the market in the future.
Low Prices- IKEA needs to make sure that by setting up low prices it is able to ensure
that it is able to identify the wide range of needs and requirements of the customers and meet
them out in a proper manner (Suoniemi and et.al., 2020). Thus, it is quite crucial for the
organization that it makes the use of this strategy in order to make sure that the prices which it
has set for its products are able to attract the customers and thus the level of revenues and
profitability can be enhanced.
Segmentation of the market- IKEA has to carry out a proper segmentation of the market
through which it will be able to ensure that it can target the potential customers in these segments
which will help in leading towards increase in the revenues and the level of profitability
(Vardarlier and Zafer, 2020). Therefore, in this way the company will be able to ensure that it
can attain its wide range of goals and objectives in the future which will help it to raise the
overall level of efficiency and effectiveness in a proper way.
Innovation- IKEA needs to make the use of Innovation in the market which will help it
in introducing new products and services for the various types of customers and thus ensuring
that it is able to ensure that the use of these products and services are able to attract the attention
of the customers (Verma and et.al., 2020). Thus the managers of the company are required to
create a strategy for this purpose which will help them in ensuring that overall level of efficiency
and effectiveness can be enhanced so that the attainment of the future goals and objectives can be
done in a proper manner. Thus it is important for the management to focus here.
Value creation- IKEA needs to make sure that it is able to focus at Value Creation
because it will be quite helpful in ensuring that the appropriate value can be created for the
different types of customers quite effectively and efficiently (Yang, Li and Lorenz, 2021). Thus,

in this way it can be said that the use of this particular strategy will be helpful in ensuring that the
customers are provided with those products which are useful for them and offer the right value
for their money. This will thus help them in ensuring that they are able to attain the future goals
and objectives and obtain a strategic edge over the competitors in the market.
Assessment of demand- In this strategy, IKEA needs to make sure that it is able to
assess the level of demand in a proper manner (Yuan and et.al., 2020). Therefore, in this way the
company will be able to make sure that through the assessment of demand it is able to identify
the particular needs and requirements of the customers so that they can be fulfilled. This will be
helpful in ensuring that the companies are able to meet out these needs and requirements in a
proper manner. Therefore, for the attainment of sustainable level of success in the future it will
be necessary for the organizations like IKEA that they can successfully implement this particular
strategy so that the level of overall efficiency and effectiveness can be raised.
Identification of opportunities for growth- It is quite important for the companies that
they are able to identify the opportunities for growth because in this way they will be able to
attain a strategic and competitive edge over the competitors in the market. For an organization
like IKEA, it is thus quite important that it is able to identify these opportunities and thus ensure
that the overall efficiency and effectiveness level within the company can be raised so that these
opportunities are used and the company is able to get ahead of its competitors in the market. It is
therefore the role of management of IKEA to identify the areas where it can grow in the market
in the future so that the attainment of sustainable success can be done quite appropriately in the
right manner effectively and efficiently. This will help the company in the long-run.
CONCLUSION
From the above report, it can be concluded that Business Strategy refers to the use of
methods and techniques through which the Businesses are able to make sure that they can
identify the way of attaining sustainable success in the future. It is crucial for the managers of the
company that they put their focus on the execution of Business Strategy so that they are able to
make sure that the attainment of the overall goals and objectives can be carried out which will be
essential for the management to be able to attain a higher-level of efficiency and effectiveness in
a proper manner. Thus, it is quite important for the different types of Businesses to make sure
that they are able to apply their strategies in a proper way.

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