IKEA Furniture Production Company Competitive Strategy Competitive Forces

IKEA Furniture Production Company Competitive Strategy Competitive Forces

Competitive forces provide a very critical environment where it is possible to achieve a greater level of understanding where it is possible to integrate important elements, which help in defining the underlying level of organizational success based on existing competition within the business context. The furniture industry although is not flooded, the existing companies offer similar products in the market which make it difficult for consumers to select from the existing companies (Hinterhuber & Liozu, 2014).

Strongest

Force

BOI Example Force Strength BOI Response
The level of competitive rivalry IKEA has a very competition from companies who have specifically focused in strategic focus within the market. Major Furniture companies such as Ashley have created a very difficult operational environment for IKEA in areas where they share the market.

The battle for market share has been significant and thus it is crucial to ensure that the business integrates strategic measures, which are aimed at creating a highly transformed business environment where it is possible to integrate critical elements, which define business development.

IKEA is a strong brand, which has been significantly developed due to its quality products and service across different markets.

The company has also diversified its operations in creating a higher level of understanding where it is possible to integrated strategic focus within the industry

The company has sought to produce high quality products at affordable prices targeting diverse market in order to embrace the needs of all its customers.

The company has also integrated a flexible production strategy where it is easier to create a customized product from customer’s imagination.

Competitive Strategy Identified

Ikea is one of the well-integrated companies in the world and thus it operates a very unique strategy, which has ensured that it remains with a large market share despite the increasing level of competition due to ease of entry into the furniture business. The IKEA competitive strategy is developed based on diverse products in the market, which are affordable to many customers. It has been able to achieve a greater presence in the market through combining function, design, values and quality with a critical focus on sustainability in place. Therefore, the diverse engagement within the market creates a strategic business environment where it is possible to achieve a greater level of customer satisfaction (Laszlo & Zhexembayeva, 2017).

Developing a creative brand identity has been one of the major positive developments that IKEA has been able to achieve over the years it has been operational. A key issue in the current business environment has been the changing customer preferences. The changing customer perspectives and the market environment requires quick decision making where the company can still manage to achieve its target in a very difficult business environment. Customization has been a key strategy that has been adopted by IKEA going forward and thus it is developed on a strong fundamental basis where success is crucial (West, Ford & Ibrahim, 2015).

IS for Competitive Advantage

The basic organizational strategy is aimed at creating a clear environment where the company can be well engaged and ensure that it is able to have a higher focus and influence in the diverse furniture market. Sustainability and environmental design have formed key part of the company development process and remained on course to achieve its long-term objectives. The ideas of the company and its development strategy have been customer centered and thus they strive to provide a perfect home that is a reflection of the owner through production of furniture that suits different and diverse tastes of customers. It is not an easy task to ensure that there is a broader focus on the underlying assumption regarding the success of the company. Customer satisfaction is derived from a feel good factor that one is able to have when is having a higher level of engagement and focus on the company products and services from highly qualified IKEA personnel and its subsidiaries (Laszlo & Zhexembayeva, 2017).

Business Processes

An important business distribution process that is crucial within the company is the Wholesale distribution division, which has integrated business intelligence, and performance management systems, which have focused on improving the company performance levels across its markets. This process provides a crucial focus on key elements within the company development strategy and thus it has created a flexible setting where it is possible to achieve a high level of organization commitment (West, Ford & Ibrahim, 2015).

Whole sale distribution process

Image result for IKEA whole sale distribution process

Opportunity for Process Improvement

Improving this process requires critical focus on implementation of a strategic supply chain management where all these processes will be reviewed with key focus on the need to improve company performance levels. Supply chain management requires critical focus on important elements, which are critical in improving business operational environment (West, Ford & Ibrahim, 2015).

open source

The distribution strategy that the company has integrated in this case is aimed at creating an improved environment where it is possible to achieve a greater level of understanding on the processes that have been put in place (Lebherz & Hartmann, 2017).

Opportunities to Use Open Source

Using open source in company management system provides a unique functional environment where it is easy to integrate positive organizational development.

References

Hahn, Y. (2015). Ikea And Corporate Social Responsibility: A Case Study. Science, Technology And Humanities For Business And Economic Sustainability, 2015 International Conference On Business And Economics (Icbe2015)10, 341–346.

Hinterhuber, A., & Liozu, S. M. (2014). Is innovation in pricing your next source of competitive advantage?. Business Horizons57(3), 413-423.

Ikea. (2011). Ikea Group Approach To Sustainability. Environment, 23.

Ikea. (2013). Place Ikea Furniture In Your Home With Augmented RealityYoutube.

Laszlo, C., & Zhexembayeva, N. (2017). Embedded sustainability: The next big competitive advantage. Routledge.

Lebherz, M., & Hartmann, J. (2017). Applying the value grid model to the furniture industry: the example of IKEA.

West, D. C., Ford, J., & Ibrahim, E. (2015). Strategic marketing: creating competitive advantage. Oxford University Press, USA.

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