B207A: An Analysis of IKEA's Marketing, Operations, and Competition

This report provides an analysis of IKEA's successful business model, focusing on its marketing, operational, and competitive strategies. It highlights IKEA's competitive pricing, customer-centric approach, and efficient store layouts. The report examines how IKEA's low pricing strategy, coupled with a focus on customer preferences and efficient operations, contributes to its global success. It also discusses the company's marketing strategies, including the use of catalogs, online and offline advertising, and social media promotions. The effective alignment of these strategies is identified as a key factor in IKEA's revenue generation and overall financial performance. The document is contributed by a student and available on Desklib, a platform offering study tools and resources.

Running head: MARKETING
Marketing
Name of the Student
Name of the University
Author Note

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Introduction:
The competition in the modern business world is observed to be significant with notable
number of new organizations entering the business market. As the modern business
organizations are facing the impact of intense market competition, many of the organizations
are seen to formulate strategies which will be effective for them in terms of avoiding the
competition that has the potential to affect the survival and the growth or the organizations.
The success of the organizations are seen to be dependent on the merit of the competitive,
marketing and the operational strategies of the organization and there are few companies in
the modern business market that are able to show greater excellence in the formation of the
above mentioned strategies and generate larger amount of revenue as well (Daunfeldt et al.
2015). The paper is focused in the elaboration of one such company in the form of IKEA. It is
well known that the company is able to conduct such improved business due to the excellence
of their effective formation of the strategies. The paper assesses the impact of the operational,
competitive and the marketing strategies of the chosen organization on the business
conduction and on the generation of the revenue as well.
Competitive Strategy:
The organization is considered to be a market giant in the global retail industry. With the
excellence in the leadership of the Jesper Brodin, the chairman and the CEO of the INGKA
Holding along with the Chairman and CEO of the Inter IKEA group, Torbjorn Loof, the
company was able to generate a revenue of 40.906 billion US dollars along with an operating
income of 5.247 billion US dollars in the year 2016 (Ikea.com. 2019). The competitive
strategy of the chosen organization was considered to be the main base of the significant
generation of the profit where it was pretty visible that the application of the competitive
pricing policy from the part of the organization, was able to provide significant competitive

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advantage to the chosen organization over the competitor organizations. However, the
application of the low pricing strategy was not the only strategy that the chosen organization
implemented in an attempt to create the competitive advantage as they were able to
understand that the importance of the happiness of the customers is notably high in the
generation of higher revenue (Jin-Yuan, Miao and Xiao-Ming 2016). As a result the
organization was seen to be significantly focused in the achieving the preferences of the
customers so that they be able to design their products and the services in accordance to the
preferences of the customers. This was a major reason responsible for the significant long
term international success that the chosen organization was able to achieve. It was pretty
evident that the products and the services of the company with the reflection of the
preferences, lifestyle and the expectations of the customers were significant in the generation
of the customer satisfaction (McGrath 2013).
Along with that, the company was observed to use their in- store activities and the
expertise of the staffs in a significant manner for the generation of the much needed delight
amongst the customers. The implementation of the improved training and the developmental
activities from the part of the chosen organization was observed to be significant for the
organization in terms of the providing the desired quality in the management of the customer
demands (Noe et al. 2017). Along with that, the selection of the locations for the opening of
the stores with a precise focus on the catchment areas for the better communication of the
new products and the features of the products to the customers of the organization were seen
to contribute into the success of the organization in a significant manner.
Marketing Strategy:

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The chosen organization is seen to sell products such as the living room furniture,
office furniture, Tables, Beds, Lounge-ware, Outdoor furniture, Swingsets, Patio sets,
Kitchen Cabinets along with the wardrobes (Ikea.com. 2019).
The chosen organization is seen to use the low pricing strategy with the motive to
attract larger number of customers. The application of the lower pricing strategy proves to be
significant for the organization in creating a competitive environment in the business
industry. However, the organization has faced considerable amount of criticism for the price
discrimination in Canada (Ikea.com. 2019).
The chosen organization is seen to use their business catalogue for the effective
communication of the products and the services that they design for their customers. Along
with that, the organization is seen to focus on the online and the offline advertisements for the
better communication regarding the features of their new products (Armstrong et al. 2015).
Adding to this, the company was seen to implement exceptional offline promotional
strategies such as one that the company conducted in the Paris Subway. Adding to this, the
organization conducts the online promotional strategies with the application of the Facebook
and other social media platforms (Ryan 2016). Apart from that, the organization is seen to
focus on the video advertisements in a notable manner.
The company is seen to serve the customers across the globe and adding to that, the
improved store locations of the organization has the potential to improve the financial
condition of the organization. The considerable number of departmental stores across the
globe will provide the physical base for the organization to conduct their business operations
apart from the joint ventures and the acquisitions that the company conducted.
Target Market:

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The target market of the chosen organization is seen to be the people with the
intention of purchasing the furniture products and the houseware products. Along with that,
the impact of the customer segmentation from the part of the organization is pretty evident
with the formation of the IKEA family where the organization is able to create a community
for the products and the services. With the application of the low pricing policy, the
organization is able to penetrate in the market in a significantly efficient manner.
Operations Strategy of the organization:
The chosen organization’s operations strategy is seen to be notably efficient for the
smooth conduction of the business operations. The application of the effective layout of the
stores for the effective flow of the goods and the customers, the application of the improved
design techniques for the stylish products that can be efficiently flat packed, effective
arrangement of the delivery of the products to the sores, effective management of the
demand, the application of the appropriate mechanism for the safety of the store operations,
efficient avoidance of the running of the products for the sales, improved management of the
quality along with continuous evaluation of the operational practices with a precise focus on
the scope of improvement is seen to be of great significance from the part of the company in
improving their operations (Maylor, Turner and Murray-Webster 2015). The main motive of
applying the above mentioned aspects of the operations strategy is seen to be the higher
achievement of the revenue along with the improvement of the business reputation that
enables the organization to improve the quality of the products even with the application of
lower pricing strategy.
As a result, the organization is able to improve their business operations with effective
alignment of the above mentioned three strategies. In addition to this, the effectiveness of the
operational strategy enables the organization to better implement the resources of the

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organization for the achievement of the competitive advantages over the competitors. The
competitive strategy of the organization allow it to find the base for the efficient management
of the marketing and the promotional activities of the organization so that the new products
of the chosen organization achieve maximum limelight.
Conclusion:
On a concluding note, the chosen company’s success is seen to be dependent on
effective management of the activities in accordance to the strategies of the organization. The
effective alignment of the competitive, operational and the marketing strategy of the chosen
organization is seen to be a crucial factor for the organization in the increment of the revenue
and in the improvement of the financial condition of the organization.

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References:
Armstrong, G., Kotler, P., Buchwitz, L.A., Trifts, V. and Gaudet, D., 2015. Marketing: an
introduction.
Daunfeldt, S.O., Mihaescu, O., Nilsson, H. and Rudholm, N., 2015. When IKEA enters: Do
local retailers win or lose?. HUI Research.
Ikea.com. 2019. IKEA.com - International homepage. [online] Available at:
https://www.ikea.com/
Jin-Yuan, Y.U.A.N., Miao, W.A.N.G. and Xiao-Ming, Y.U.A.N., 2016. Analysis for Cost
Leadership Strategy and Core Competitiveness Points of IKEA CO. DEStech Transactions
on Economics, Business and Management, (iceme-ebm).
Maylor, H., Turner, N. and Murray-Webster, R., 2015. “It worked for manufacturing…!”:
Operations strategy in project-based operations. International Journal of Project
Management, 33(1), pp.103-115.
McGrath, R.G., 2013. The end of competitive advantage: How to keep your strategy moving
as fast as your business. Harvard Business Review Press.
Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M., 2017. Human resource
management: Gaining a competitive advantage. New York, NY: McGraw-Hill Education.
Ryan, D., 2016. Understanding digital marketing: marketing strategies for engaging the
digital generation. Kogan Page Publishers.