Arab Open University: IKEA Marketing and Operations Strategy Report

This report provides an in-depth analysis of IKEA's marketing and operational strategies, focusing on how these strategies contribute to the company's competitive advantage and overall success. The report begins with an introduction to IKEA, a Swedish furniture company known for its unique approach to customer interaction and product design. It then examines IKEA's competitive strategy, highlighting its focus on product quality, customization, and affordability. The marketing strategy section analyzes the 4 Ps (Product, Price, Placement, and Promotion), target market, and positioning. The operations strategy section explores IKEA's operational management, emphasizing its focus on flexible roles, efficient processes, and customer satisfaction. The report then examines the relationship between these strategies, demonstrating how they work together to achieve organizational efficiency and customer loyalty. Finally, the report concludes by summarizing the key findings and emphasizing IKEA's ability to sustain its value proposition for customers in the future. The report also references relevant academic sources to support its analysis.

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

1MARKETING AND OPERATIONS STRATEGY
Introduction
The essay is focused towards understanding the marketing and operational strategies
implemented by the company IKEA. It is a furniture company founded in Sweden. The
various competitive, marketing and operations strategy that are implemented by the company
is analysed and evaluated through the study. The company is known for its unique
approaches involving exceptional customer interaction and participation in the production
process. The study focuses on finding how the marketing and operation strategy helps the
company to form effective competitive strategies. Their importance in determining the factors
that can drive the present and future performance of the organization are evaluated
subsequently.
Competitive strategy
It is evident that the competitive strategy implemented by IKEA revolves around the
product quality and unique customization process that is provided to the customers. The
company ensures that all kinds of customers are able to afford their products. Their product
offerings are not just for the few but appeals to all customer segments. The design of the
products are done keeping in mind sustainability and quality at the same time. The focus is
also towards effectively maintaining functional aspects of the products (Laurin and Fantazy
2017).
Firstly, IKEA offers the lowest prices to the customers. The cost effectiveness of the
company is better than the competitors. The company uses economies of scale and integration
of technology to take effective cost advantage of the market. Secondly, the product variety
offered by the company also gives it significant competitive advantage over its rivals. The
company provides more than 9500 products to the customers. Moreover, around 2500

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products are launched annually by the organization. The company has also ventured into the
food industry for further expansion of business. Thirdly, the company takes part in
international market expansion strategy (Foray 2018). It currently has around 340 stores in
more than 28 worldwide markets around the globe. It has been able to garner a strong global
presence due to its long business reputation.
Marketing strategy
The marketing strategy of any significant business consists of the 4 Ps. These are
Product, Price, Placement and Promotion. IKEA implements the same towards optimizing its
marketing strategy. The mentioned aspects are part of the marketing mix. The other
significant aspects are target market and positioning.
Target market- The Company sells furniture to a large number of customers worldwide. The
company does not have any distinct target market that it appeals to. Rather the company is
focused towards reaching a wide number of customers encompassing all sexes, ages or
geographic areas. However, the common criteria for attracting all these customers is price
preference.
Marketing mix- the pricing strategy of the organization is to sell large volumes and
implement flat packaging to save costs. The company uses a mechanism through which the
inventory functions are done through the various stores that are partnered with the
organization. The company also focuses on reaching customers that are more inclined
towards customizing their product offerings. The company also focuses from changing their
product offerings from time to time in accordance of market and customer demands.
Positioning- The company uses the positioning statement of “We Do Our Part” (IKEA.com
2019). This implies the commitment of IKEA towards production of quality goods for the

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customers. The products are positioned in a way to deliver good quality product to customers
by utilizing lesser expensive resources. Self-service is also an important aspect promoted by
the company.
Operations strategy
The management of operations is an essential part of IKEA and determines much of
its operational effectiveness. The operations of the company are focused towards matching
the expectations of the customers. The organization has a large network that needs to be
managed. Hence, the company focuses more towards flexible roles and responsibilities of its
management. Operations managers are involved in activities such as, designing easy to
package products, guiding staffs to contribute, locating effective stores, delivery arrangement,
monitoring quality and continuously examining and improving operations. These are
multifaceted responsibilities that require the management to be divided into many parts. A
large number of operations managers are hence required to help the effective running of the
operations. There are other essential responsibilities that the operations managers are also
required to take apart from the above mentioned points. This necessitates the effective
commitment of the mangers towards the productive functioning of the organization. The
strength of the operations lies in the various levels of identified operational areas. This makes
it easier to assign dedicated roles to the operational managers and their teams. There is an
operations team to take care of the responsibilities associated with every area of operation.
This makes it easier for the organization to monitor the operations process.
Relationship between the strategies
A smooth connection between the competitive, marketing and operational strategy is
required for the effective functioning of businesses. At IKEA the strategies are optimized in
accordance of their significance in achieving essential productivity of the company. The

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various operational managers tend to look after all the identified areas of operations to
enhance the quality and volume of production of the organization. This compliments the
marketing strategy of the organization. The target customers can be reached more effectively.
The products can be more effectively placed in the market. The positioning of the product
becomes important in this context as the operational effectiveness of the company can mean
that they are really doing their parts (Larsson and Schiehle 2016.). In essence, the operational
efficiency helps to improve the products and the services that the given to the customers. This
helps to earn better competitive advantage for the organization. The company lives up to the
expectation of the customer base as all three of the functional strategies are optimized
towards maintain organizational efficiency.
Conclusion
It can be said that IKEA have been able to perform successfully in the market due to
its multifaceted functional efficiency. The company has been able to garner a huge customer
base and maintains the same through its effective operational standards. The unique feature to
let customers decide and customize their products helps the organization to connect better
with the target market. The company is effectively poised to sustain its value for the
customers in the future.

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References
Bilsland, K. and Cumbers, A., 2018, July. Organizational Control and Autonomy in Retail
Work Spaces: Evidence from a UK IKEA Store. In Academy of Management
Proceedings(Vol. 2018, No. 1, p. 12455). Briarcliff Manor, NY 10510: Academy of
Management.
Carlsson, M., 2015. Strategic sourcing and category management: Lessons learned at IKEA.
Kogan Page Publishers.
Foray, M., 2018. Understanding the Management Control System Used by Hybrid
Companies: A Case Study of IKEA and MIO.
IKEA.com, 2019. IKEA.com - International homepage. [online] IKEA. Available at:
<https://www.ikea.com/>
Larsson, A. and Schiehle, S., 2016. The Effects of Diversity on Multinational Organisations:
An exploratory case study investigating the cross-cultural management and organisational
culture of IKEA.
Laurin, F. and Fantazy, K., 2017. Sustainable supply chain management: a case study at
IKEA. Transnational Corporations Review, 9(4), pp.309-318.