IKEA's Marketing and Operations Strategy for Competitive Edge

This report provides an analysis of IKEA's marketing and operations strategies, examining how these contribute to the company's competitive advantage. It delves into IKEA's cost leadership, differentiation, and focus strategies, highlighting the company's approach to offering low-priced products, introducing new products based on consumer needs, and promoting existing products effectively. The report also explores IKEA's target market segmentation, marketing mix (product, price, place, promotion), and operations strategy, emphasizing efficient supply chain management and continuous monitoring of operational practices. Furthermore, it discusses the relationship between competitive, marketing, and operations strategies, concluding that a well-aligned marketing plan and operation design are crucial for IKEA's success in the market. The analysis draws from various sources and case study observations to support its findings.

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Introduction
Marketing strategy is a part of an organisation that plans the business to attain the customer.
A good market strategy helps the business to achieve the success in the market. An
organisation has to develop the strategies such as competitive strategy, market strategy and
operational strategy to grab the high market share. In this report, the discussion is made on
the market strategy as per external and internal analysis. IKEA has been taken into
consideration to analyse the competitive, marketing and operations strategy. IKEA is a
Swedish-founded multinational group that offers the kitchen appliances, and home
accessories (IKEA, 2019). In this report, competitive, operating and the marketing strategy
will be analysed to identify the support of market and operation strategy in competitive
strategy.
Competitive strategy
Competitive strategy is classified into the three factors such as cost leadership, differentiation
and focuses.
Cost leadership strategy
According to the case, it has been analysed that the company introduce the product with the
lower price. The company offers the low prices to consumers in order to become the best
retailer in the market. A lowest price attracts the large number of customer towards the
organisation and helps to gain the competitive advantage (Belton, 2017).
Differentiation strategy
As per the case study, it is observed that the organisation has to introduce the new products as
per the consumer needs and requirement. It opens the many store sites in the different places

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to grab the high market share. Many store sites of the organisation reach at the large number
of consumers.
Focus Strategy
It has been seen that the company also focus on its existing products so that they achieve the
success in the market. Promotion technique to promote the existing product is considered as
the useful source for the company (Dudovskiy, 2017).
Marketing strategy
Market strategy is long term approach which is planned to achieve the competitive advantage
in the market.
Target Market of IKEA
Types of Segmentation Segmentation criteria IKEA target customer
segment
Geographic Region Operate in different countries
such as Europe, Asia,
American, Australia
and Russia
Density Urban
Demographic Age 18 above
Gender Females and Males
Life cycle stage Young bachelor
New Married Couples
Parents with the dependent
children

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Retried Couples
Behavioural Loyalty Degree Soft core Loyals
Switcher
Benefits sought Cost Effectiveness
Personality Easy going and determined
Mind-set personality
Psychographic Social class Upper class
Middle class
Working class
Lifestyle Explorer
Mainstreamer
As per the case study, it is observed that the consumer of the company spends their huge time
on displays of furniture. They collect the components from the different places after
exploring the displays of furniture.
Marketing mix
Product It develops the different products such as
furniture, kitchen appliances and home
accessories.
 Designing the products that can be
flat packed efficiently
 Manufacturing the product according
to consumers demand
 Handle the fluctuation of demand of

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consumer by developing the different
products
Price It adopts the cost leadership strategy to gain
the competitive advantage in the market.
Low prices of excellent products as compare
to competitors
Low price of company attract the large
number of customer towards the company
Place It operates in many locations such as Europe,
America, Australia and many others.
Stores of the company is in the effective
place with the appropriate size
Supply chain management of the company is
effective, as it is delivers the products to
stores.
It maintaining the cleanliness and safety of
storage area
Promotion The company offers the low prices with the
high brand name brings the effective result
for trade and sale promotion.
It uses the statement to promote its sales and
trade such as “style without expense”.
Newspaper, televisions are the means of

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promoting the products of the company
(Duermyer, 2019).
Operations Strategy
This strategy is typically driven by the business strategy of the organisation and it is able to
design to maximise the efficiency of production (Ansoff, Kipley, Lewis, Helm-Stevens, and
Ansoff, 2019). In the case of IKEA, it is observed that the operation management is a vital
part of its success in the market. It allocates the resource and designs the infrastructure
according to market and its customer. The organisation is able to manage the network of
operations that designs, produce and deliver the products and services in different locations.
It also designs the infrastructure in the manner to effectively flow in the market such as:
Locate store of an appropriate size in the different places
 Arranging the products delivery as per the located stores which reflect the effective
supply chain management.
 Continuously examining and monitoring operation practices to provide quality of
services to consumers.
The designs help the company to gain the competitive advantage in the market by
competing with the competitors (Dudovskiy, 2017).
Relationship between competitive, marketing and operations strategy
Marketing strategy and operating strategy are effectively in a manner to achieve the objective
of the organisation. Marketing strategy states the target market of the company in the

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different terms such as geographic, demographic, and behavioural. The operation strategy of
the company is effective when it design in an appropriate way to achieve the organisation
objective. Operation strategy of the company is effectively design with the help of market
strategy. Marketing strategy of the company also include the 4P’s of marketing mix such as
promotion, place, people and prices. These 4 P’s helps to maintain the process of supply
chain and promotion campaigns.
Operation strategy and marketing strategy of the company helps to gain the competitive
advantage. The company develops the marketing strategy that includes the different market
segments such as prices, promotion, place and product. It is easy for the organisation to
operate smoothly in the market according to plan in order to achieve the objective. Operation
strategy is totally relies on marketing strategy because the operation design is prepared as per
the market targets and segmentation. The company gains the competitive advantage while the
marketing plan and operation design is appropriate. It has been seen that the operation design
and market targets of the company is appropriate that is why; it achieve the success in the
market (Madsen, and Walker, 2015).
Conclusion
From the limelight discussion, it has been concluded that the company have high scope to
gain the competitive advantage in the market. High market share is the result of operating and
market strategy of the company. The operation of the company is appropriately design in an
effective manner so that it gains the competitive advantage.

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References
Ansoff, H.I., Kipley, D., Lewis, A.O., Helm-Stevens, R. and Ansoff, R. (2019) Implanting
strategic management. Springer.
Belton, P. (2017) Competitive Strategy: Creating and Sustaining Superior Performance.
Macat Library.
Dudovskiy, J. (2017) IKEA Business Strategy and Competitive Advantage: Capitalising on
IKEA Concept. [online] Available from: https://research-methodology.net/ikea-business-
strategy-competitive-advantage-capitalising-ikea-concept/ [Accessed 20/3/19].
Dudovskiy, J. (2017) IKEA Segmentation, Targeting and Positioning: Targeting Cost-
Conscious Customers. [online] Available from: https://research-methodology.net/ikea-
segmentation-targeting-positioning-targeting-cost-conscious-customers/ [Accessed 20/3/19].
Duermyer, R. (2019) How to Develop the Marketing Strategy for Your Home Business.
[online] Available from: https://www.thebalancesmb.com/marketing-strategy-for-home-
business-success-1794314 [Accessed 20/3/19].
IKEA. (2019) Our Story. [online] Available from: https://seeacareerwithus.com/about-us/our-
story/ [Accessed 20/3/19].
Madsen, T.L. and Walker, G. (2015) Modern competitive strategy. McGraw Hill.