The Ikea Case Critical Analysis

The IKEA Case Critical Analysis

An analysis of the corporate and market strategy of the IKEA company is presented in this document, emphasizing those aspects that have put the main elements generating competitive advantages, these aspects are strategic analysis, competitive strategy and marketing tools among others.

Its founder Ingvar Kampral, and the basis of the concept offered by Ikea, were born in Smaland, a city of Sweden. Ikea was founded in 1943 in Sweden, and obtained a marked social positioning and in the market, as an example in a society with social vocation, which did not differentiate or discriminate against rich and poor. Its founder, has as great objective and the objective of each company is to be leaders in the market in which they are, with what they market, Ikea is a decoration company, and remains focusing on its large part on furniture sales and other decorative articles.

The IKEA company knows how it implements the mission that is in mind and institutionalized, being the one that intends to achieve the vision of the business, having marked and defined priorities, which will be used at this time and finally clarify what are the points in which The allocation of resources will focus today and in the future. He could not be a worldwide decoration leader but expand to new markets, Ikea has always studied the entrance to new markets and has valued, in each case this opportunity, having a strategic performance, where he has been choosing the countries that can cause it large benefits and from that country expand the horizons, now Ikea is immersed in reaching emerging markets.

Competitive strategy

It is known for most of those involved in the middle, customers and others, that Ikea is a cost leader, when a person goes to Ikea the first thing he thinks is that he will find a cheap furniture and the second is that he is not going to Being able to find this cheaper type of furniture in another company, because yes, Ikea uses a cost leadership strategy, but this does not stay there, many people go to Ikea for their many services such as the restaurant and its famous meatballs Swedish or by the Smaland service, where children can be left in a game area with caregivers, for free, while the client can go to buy or simply take a look quietly. IKEA gives much importance to the cost structure and knows that a good cost structure is vital to market a product at a lower price. To do this, it focuses on the value chain:

• Input logistics
• Operations
• Output logistics
• Marketing and sales
• Services

The company to become leaders of the differentiation strategy, assumes the task of offering differentiated articles, articles with added value, Ikea does not give so much importance to the differentiation of the products, as of differentiating them from the competition, since they know that From the competition they can imitate it, they focus more on the added values ​​that can be given to the product so that it ends up differentiating.

IKEA products are developed and implemented in order to break through the market, based on the product, four fundamental criteria can be differentiated: Product line + additional services + brand + container.

Additional services provide IKEA products of additional value, demarcating in the face of their competitors in the furniture or decoration industry. Thanks to these additional services, which cause the product to differentiate, IKEA can implement a differentiation strategy and in turn services that are not included in the price of the OPACIONAL PRODUCT IKEA, help the implementation and effectiveness of the Cost Leadership Strategy

Therefore, in Ikea, as any company, to establish the price to its products, take the triangle as a reference: costs – customer value – competitors. It is evident that the main criterion that IKEA uses to establish the price to its products is the value for the customer, they are based on whether the customer buys such items to raise the price or on the contrary but he likes it, lower it.