Analysis of Ikea's Competitive, Marketing, and Operations Strategies

This essay provides a comprehensive analysis of Ikea's strategic approaches, including its competitive, marketing, and operational strategies. It examines Ikea's competitive strategy, which combines low prices with product differentiation, allowing customers to customize and assemble their furniture. The marketing strategy is dissected, highlighting the target customer segmentation based on demographics, psychographics, and behavior, along with a detailed analysis of the marketing mix (product, price, place, and promotion). The operations strategy focuses on how Ikea manages its network and product design to effectively serve its customers. The essay also explores the relationships between these strategies, emphasizing how competitive advantage is maintained through effective marketing and efficient operations, ensuring that Ikea can effectively reach its target customers.

Running head: MARKETING AND OPERATIONS
MARKETING AND OPERATIONS
Name of the Student
Name of the University
Author Note

1MARKETING AND OPERATIONS
Introduction and about the company
Ikea is a Swedish multinational company that mainly designs and offers the ready-to-
assemble furniture, home accessories, kitchen appliances and many other occasional services
as well. Ikea has gained a position of the largest furniture retailer since the year 2008. Ikea
was established in the year 1943 by a carpenter of 17 years of age Ingvar Kamprad. The
founder of Ikea was listed by the Forbes magazine among top 10 richest people. The net
worth that has been developed by Ingvar Kamprad is greater than 40 Billion Dollars
(Ikea.com 2019).
The essay will be based on the strategies that have been implemented by Ikea in the
industry that includes, the competitive strategy, the marketing strategy and the operations
strategy. The relationship between the strategies will also be analysed in the essay in detail.
Competitive strategy at Ikea
The competitive strategy that has been implemented by Ikea in the industry is a mix
of low prices and differentiation. The customers of Ikea are provided with major options to
choose the desired furniture and assemble them according to their personal demands and
needs. The consumers need to visit the stores and collect the required furniture that can later
be assembled according to their requirements (Bang, Joshi and Singh 2016). The prices that
are set for the products are also lower in comparison to the competitors. This factor is able to
play a major role in the ways by which Ikea is able to maintain an advantage over the
competitors in the furniture industry. The products of Ikea are tailored in an effective manner
based on the demands and needs of the consumers. The differentiation of products is also
based on the ways by which the furniture is tailored according to the needs of customers
(Jackson and Ahuja 2016).

2MARKETING AND OPERATIONS
Marketing strategy at Ikea
Target customers - Ikea has implemented different types of segmentation strategies
that help in dividing the customers in various groups. The demographic bases are applied by
Ikea in order to decide the target market. Psychographic and behavioural segmentation
process is implemented by the organization in order to maintain its profitable operations in
the industry. The company aims at providing high value to the customers with the help of its
signature products and best prices. The major target customers of Ikea include the group of
people who provide importance to the attributes that are offered by the products (Jensen,
Cobbs and Turner 2016).
Marketing mix of Ikea –
Product – The furniture based products that are designed by Ikea are developed based
on the strategy of “Do It Yourself” or DIY. The products of the company are not pre-
assembled, on the other hand, they are designed with respect to the choice of consumers. The
flat-pack distribution based channel is implemented by Ikea Group for helping the customers
to transfer the products from the stores to their homes. Ikea has shown huge concern for
individual requirements of the consumers who are the most important part of its operations
(Shams 2016).
Price – The prices of the products of Ikea are kept within the affordable range in order
to face the competitors. The large-scaled economies have been used by Ikea in order to make
to long term contracts with the producers in order to lower the prices. The packaging of
products is done by Ikea with the help of recyclable cardboard based materials in order to
lower the costs based on production (Sinapuelas, Wang and Bohlmann 2015).

3MARKETING AND OPERATIONS
Place – Ikea provides limited amounts of products in the stores and the company is
heavily dependent on the suppliers in order provide the furniture to its consumers. The
distribution based structure of Ikea is also efficient and is able to adapt to the changes that
take place in the external environment (Walsh and Dodds 2017).
Promotion – Ikea has displayed its effective slogans in the advertisements that are
developed for various countries. The advertising methods of Ikea are based on the culture that
has been developed in the country. The high profile advertising campaigns that have been
formed by Ikea are based on the online and offline advertisements (West, Ford and Ibrahim
2015).
Operations strategy at Ikea
As discussed by Sinapuelas, Wang and Bohlmann (2015), operations management is
considered to be an important part of the success that gas been gained by Ikea in the industry.
The organization is able to understand the customers and its market in order to provide the
products to them. The proper management of the network based on operations and design of
the products is based on the ways by which the services and products can be developed to the
consumers.
Relationship between competitive strategy, marketing strategy and operations strategy
As opined by Jensen, Cobbs and Turner (2016), the competitive strategy of Ikea is
based on the low prices and high levels of differentiation of the products. On the other hand,
marketing mix is considered to be highly important for the ways by which the organization is
able to offer the products to its consumers. The promotions that are developed by the
organization and its distribution is significant for the ways by which Ikea has maintained its
competitive position. The operations management related activities of Ikea have also

4MARKETING AND OPERATIONS
provided major levels of support to the ways by which the distribution and promotions can
maintained and the products can reach the customers. The stores have played an effective role
in the ways by which the company is able to depict its products (Bang, Joshi and Singh
2016).
Conclusion
The essay can be concluded by stating that the position that has been developed Ikea
can be maintained by the promotions and proper distribution as well. The operations of Ikea
are considered to be highly important for the future of the company in the industry. Ikea can
maintain its customer base with the proper support that is provided by the marketing mix and
the competitive advantage that has been formed in the competitive industry. This will be able
to play a key role in developing the future of Ikea.

5MARKETING AND OPERATIONS
References
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Jensen, J.A., Cobbs, J.B. and Turner, B.A., 2016. Evaluating sponsorship through the lens of
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Shams, S.R., 2016. Capacity building for sustained competitive advantage: a conceptual
framework. Marketing Intelligence & Planning, 34(5), pp.671-691.
Sinapuelas, I.C.S., Wang, H.M.D. and Bohlmann, J.D., 2015. The interplay of innovation,
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Walsh, P.R. and Dodds, R., 2017. Measuring the choice of environmental sustainability
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West, D.C., Ford, J. and Ibrahim, E., 2015. Strategic marketing: creating competitive
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