Introduction
IKEA is a multinational home furnishings retailer founded in Sweden in 1943. It is now the largest furniture retailer in the world, with over 400 stores in more than 50 countries. IKEA’s competitive advantage lies in its ability to provide stylish, modern furniture at affordable prices. It focuses on customer value by offering low-cost contemporary furniture, taking advantage of its global purchasing power and supply chain management. IKEA’s competitive advantage strategies include self-service, flat packaging, and cost-effective production (Ozturkcan, 2021). Self-service allows customers to browse and pick up items in the store. Flat packaging ensures customers can easily transport their purchases home. Finally, IKEA keeps its production costs low by using low-cost materials and operating its manufacturing plants. In addition to its competitive advantage strategies, IKEA also focuses on sustainability initiatives, such as using renewable materials in its products, reducing waste and emissions, and supporting local communities. IKEA has become a successful global brand by emphasizing customer value and sustainability.
IKEA’s Competitors
IKEA’s main competitors include furniture retailers such as Ashley Furniture, Wayfair, and Pottery Barn. It is essential for businesses to understand their environment to obtain the correct inferences for decision-making (Campbell and Craig, 2005). Ashley Furniture is one of the largest home furnishing companies in the United States. It offers a wide range of furniture items, including bedroom, living room, dining room, and home office items. Ashley Furniture’s products are known for their high quality and affordability. Wayfair is an online furniture retailer that offers a variety of home furnishings and decor. Wayfair offers free shipping and low prices on all its products, making it an excellent option for budget-minded shoppers (Ford, 2020). Pottery Barn is a subsidiary of the Williams-Sonoma company and is known for its high-end furniture and decor gaining popularity through timeless and classic home pieces. These companies offer competitive prices and a wide selection of furniture pieces, making them an excellent option for those on a budget. However, IKEA is unique in that it offers customers a wide range of customizable furniture options, which allows them to design their pieces to suit their tastes and needs.
IKEA’s Competitive Advantage Strategies
IKEA’s competitive advantages are essential to its performance as a global brand. Self-service, flat packaging, and cost-effective production allow them to offer stylish, quality furniture at low prices. This appeals to customers looking for affordable yet stylish pieces and encourages them to purchase from IKEA. Their wide selection of furniture styles, accessories, and promotions enables customers to remain loyal to the brand (Wu, 2020). Additionally, IKEA’s focus on sustainability initiatives helps them stand out from competitors and attract customers looking for environmentally-friendly products. These advantages are essential to IKEA’s success and its ability to remain competitive in the global marketplace.
IKEA’s primary competitive strategy is to offer stylish, quality furniture at low prices. They have achieved this by streamlining their operations and focusing on cost-cutting measures. IKEA has adopted a flat-pack delivery system, where customers can save money by assembling their furniture. They have also opened huge stores with a large selection of furniture, allowing customers to browse and compare before making a purchase. This large-scale operation will enable them to benefit from economies of scale. By keeping costs low, IKEA can offer furniture at a fraction of the cost of competitors (Burt et al., 2021). IKEA’s second competitive strategy is to provide a wide selection of furniture styles. They have a range of modern and traditional products that appeal to various customers. IKEA’s design team is constantly innovating and creating new products. This allows them to stay ahead of the competition and attract new customers. They also have a large selection of accessories, such as lamps and rugs, which add to the appeal of their furniture.
Another competitive strategy that IKEA uses is building solid relationships with customers. They have several loyalty programs and promotions that reward customers for their loyalty. They also have a robust online presence, with a website that allows customers to purchase and compare furniture online. This will enable them to reach a wider audience and build a solid customer base. IKEA’s fourth competitive strategy is to focus on sustainability. IKEA has several initiatives to reduce its environmental impact (Sin et al, 2021). They have implemented energy-saving measures in their stores, used recycled materials in their products, and committed to using renewable energy sources. This allows them to appeal to customers who are looking for environmentally-friendly products. IKEA is committed to reducing its environmental footprint and creating a sustainable future.
Conclusion
IKEA is the world’s largest furniture retailer that operates globally. IKEA’s competitive strategies include self-service, flat packaging, and cost-effective production, allowing them to offer stylish, quality furniture at low prices. Their competitors include Ashley Furniture, Wayfair, and Pottery Barn, but IKEA stands out with its customizable furniture options. IKEA also focuses on sustainability initiatives such as using renewable materials, reducing waste, and supporting local communities. They have a loyal customer base and a solid online presence and have committed to reducing their environmental impact. IKEA is an example of a successful brand emphasizing customer value and sustainability.
References List
Burt, S. et al. (2021) ‘The changing marketing orientation within the business model of an international retailer–IKEA in China over 10 years,’ The International Review of Retail, Distribution and Consumer Research, 31 (2), pp.229-255. Web.
Campbell. D. and Craig, T. (2005) Organizations and the business environment. Elsevier Butterworth-Heinemann.
Ford, J. (2020) ‘Q&A: The next dimension,’ The Engineer, 300(7918), pp. 32–35. Web.
Ozturkcan, S. (2021) ‘Service innovation: Using augmented reality in the IKEA Place app,’ Journal of Information Technology Teaching Cases, 11(1), pp.8-13. Web.
Sin, L.G. et al. (2021) ‘A case study of the factors that affect consumer behavior in IKEA’, Asia Pacific Journal of Management and Education (APJME), 4 (2), pp.20-28. Web.
Wu, Y. (2020) The marketing strategies of IKEA in China using tools of PESTEL, five forces model and SWOT analysis. In International Academic Conference on Frontiers in Social Sciences and Management Innovation (IAFSM 2019) (pp. 348-355). Atlantis Press.