Portfolio Brief for the case of IKEA
According to the case of IKEA, we will evaluate their operation by using 4P / Ansoff’s and Business Integration Strategy.
Core Competency by using the Product Strategy
A broad product line, including multi function and different style, can provide strong product uniqueness and help IKEA building up a good competitive advantage among the market. Besides, durable household is another main feature of IKEA, for example, the sofa can reach the number of pressure in hundreds thousands times and keeps the doors of cabinets to switch on and off in several decades which they will have the demonstration to prove the testing method and result to customer.
IKEA provides the product in modular system, the design of each product is in high flexibility which can be ride opened the DIY (Do It Yourself) concept to customer. On the other hand, IKEA can let the customer bring all the furniture to home at the same time, customer can save the delivery cost and transit time. Also, IKEA can save the logistics and the warehouse cost which can achieve the win-win situation significantly.
Core Competency by using the Price Strategy
IKEA will base on the low-cost design philosophy and method in order to design the product in lowest cost and let all range of people is affordable to buy. And they are using the flat packaging and continuous innovation on various products in order to reduce the cost. Flat packaging can save the warehouse area and reduce the defect rate. Moreover, it can greatly save the transportation for all parties.
Core Competency by using the Place Strategy
IKEA will choose a large area to present their products and they are always through the unique Scandinavian style for presentation. Moreover, the showroom will be according to each theme or design style to divide each room within the shop. Besides, IKEA provides both of the Catering Services and Children Play Facilities which are the added value to the existing core business, it can be increased customer satisfaction and support the sales department.
Core Competency by using the Promotion Strategy
Build up a good brand perception to customer in both price and quality range. IKEA is not only providing the various products to customer, but also offer a total solution for home furnishing and a package of home decoration including design and construction. On the other hand, IKEA changes its catalogs every year which is another important element to let them promote their product in the fastest and easiest way to greatly increase their sales volume.
Ansoff’s Product-Market Matrix
By using the Ansoff’s Product-Market Matrix to the case of IKEA, we found out that IKEA can expand their international design team in order to maintain the various products in Scandinavian style. On the other hand, they can reserve the flexibility for local adaption for diversified tastes, preference and requirements across the continental markets.
As a result of Ansoff’s Product-Market Matrix, IKEA is able to create a strong competitive advantage over the home decoration and furnishing market through offering unique and high differentiated products. “Unique Scandinavian Style, Local Taste Meets”
Further Diversify – Business Integration strategy
Backward Integration – IKEA has to control the manufacturing partners by means of various strategic collaboration including Merge and Acquisition or Strategic Alliances in order to primarily secure the production coherence and efficient supply.
Forward Integration – Remove the intermediates at the forward side of supply chain by directly establishing own-controlled retail outlets is the way to maintain a high level of margin resources through manipulation of a major share of supply chain.
Market Development in future
IKEA continues to develop the new markets at international level in order to increase the quantity supplied. Therefore, facilitation an adjustment of economic production scale towards an optimal point
IKEA can be also upgrade to the global brand that strengthens its market position of which any rivals are difficult to imitate and compete.