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Strategic Analysis of IKEA

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on 13 March 2014

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Transcript of Strategic Analysis of IKEA

Why is this strategy difficult for competitors to imitate?
Balance very difficult
Porter (1980) : « stuck in the middle »
Low cost: DELL
Differentiation: Apple
Very difficult to combine both aspects

Global presence
Built-up market share/knowledge/reputation

Dangers of a hybrid strategy
Too much emphasis on either low costs or differentiation
Getting "stuck in the middle" (Porter,1980)

Between low price & high differentiation

How to achieve the balance?

Thank you for your attention!
Strategic Analysis of IKEA
Unspecialised stores
Wide product range – appeals to rich and smart

Unique supply chain

Cost structure (30%-50% lower than competitors)
Buying in bulk

Certain KSFs needed:
Innovative strategy
Close orientation towards customer needs
Organisational learning
Consistent strategic decisions

The Strategy Clock
What makes IKEA’s strategy a hybrid strategy?
Low Price:
Cost cutting
Standardised design
Labour costs

The IKEA way
Target market
Guarding against Dangers
Globally dispersed supply chain
Continued investment in differentiation, i.e.Smart designs and the IKEA way
Full transcript