Corporate & International Level Strategy

IKEA competitive advantage includes the following great range of products. In IKEA portfolio there are 9500 product as well as its product range about the company renews annually new products round about 2500 launched. In food and catering industries the company is also increases its presence. In 2016, for the company the slogan “it starts with the Food” as the main them. The IKEA group of companies has an ownership structure that ensures independence as well as long-term techniques. As we analyze the human resource management of IKEA. By their high quality the vision of IKEA is “creating a better everyday life for the many people” is reflected, in affordable prices and great variety well designed as well as functional products. IKEA Company there are many strategies utilize, such as diversification product. Outsourcing strategy also used by the IKEA for example for most of its products IKEA contract out manufacturing. From independent suppliers all products were sourced. From Eastern European IKEA was out sourcing some goods. Like market segmentation IKEA used different strategy that based on the culture to the nation.  The retail chain's officials say they intend to grow IKEA's sustenance business further as well as in coming years have independent eateries speck urban areas around the globe.

Corporate Level strategy of IKEA

IKEA concept is depending on the Corporate Level strategy. The IKEA Company gives the idea that IKEA provide the furniture that is affordable to every class of people. By combining function, quality, design as well as value is achieved and always sustainability in mind. In every part of the company, from design, sourcing, packing and distribution the IKEA concept exists through to business model. IKEA Corporate Level strategy has the following constitute element.

Lowest price offering

Variety of product increases

International expansion of market strategy

Financial Management

HRM Activities

Acquisition

Organization Wide Strategies of IKEA

Lowest price offering of IKEA

One of the solid bases of IKEA competitive advantage is the cost effectiveness. Into several business processes the global furniture retailer is capable to offer low prices this is because of the combination of economies of scale as well as technological integration (Moon, 2010).

Variety of product increases of IKEA

IKEA competitive advantage includes the following great range of products. In IKEA portfolio there are 9500 product as well as its product range about the company renews annually new products round about 2500 launched. In food and catering industries the company is also increases its presence. In 2016, for the company the slogan “it starts with the Food” as the main theme. IKEA Food turnover that consists restaurants, bistros, and food market Swedish, as well as co-worker restaurants amounted to EUR 1.7 billion, in FY 2016 (Economist & Kourdi, 2015).

International expansion of market strategy of IKEA

In new market development in an aggressive manner the home improvement as well as furnishing chain has traditionally engaged. Worldwide in 28 markets IKEA group has 340 stores, in 11 countries 22 pick-up and order points, in 15 countries 41 shopping centers as well as in 18 countries 38 distribution sites. In medium term perspective in India as well as Serbia the company is planning to open stores. IKEA business strategy contains a full analysis (Dudovskiy, 2017).

Financial Management of IKEA

From 2001 to 2018 this depicts the annual revenue of the IKEA group globally. 38.8 billion Euros the worldwide revenue is generated by the IKEA group, in 2018. To great collaborations with others much of this comes down, to create an even better product range that inspired and challenged us

HRM Activities of IKEA

The IKEA group of companies has an ownership structure that ensures independence as well as long-term techniques. As we analyze the human resource management of IKEA. By their high quality the vision of IKEA is “creating a better everyday life for the many people” is reflected, in affordable prices and great variety well designed as well as functional products. In a cost conscious this philosophy of doing things as well as also environmental activities included. Here is the work flow diagram of the human resource management.

Acquisition of IKEA

For Goodwill donations a long-time customer of Task Rabbit to long-term I have hired, to fix our plumbing when disposal garbage broke. Last year the Swedish furniture company generates the revenue of $35 billion this week the news came that the IKEA purchased Task Rabbi. To get jobs 60,000 workers used this platform as well as task rabbit has 60 full time employees. The current CEO Stacy Brown-Philpot would remain as CEO and the staff, independent of IKEA it was reported as. For IKEA this was an excellent move (Morgan, 2017).  To add services and technologies Ikea group will consider additional acquisitions as well as also expand its following reach the purchase of Task Rabbit Inc. this is a creative new idea of business (Economist & Kourdi, 2015).

Growth Strategies of IKEA

As we discuss the company product and sale. Retailer chain is seized by IKEA that sells flat pack of furniture, kitchen as well as other accessories across the worldwide. In order to reduce transportation cost the furniture designed to be self assembled. Although, in their stores the Company IKEA include the restaurant and served the traditional Swedish food, such things like meatballs Swedish, smoked salmon, berry tarts lingo as well as cream source. Therefore, the attractive strategy of IKEA is that in many stores they opened the play area for the children named as Smaland, this is the biggest advantage of the IKEA and parents feel easy to drop their children to playground while shopping as well as at another entrance pick them up.

Nowadays for most of the companies globalization is the current trend that is used. Especially in Asia market share gain in new entry countries, in future IKEA corporate as well as determine its sustainability of business strategy and competitive advantage between the competitors. Let’s take the example of IKEA cooperate strategy in Asia country, China consists of joint venture, localization along with the strategies of pricing. Primarily, in China with local companies IKEA do a joint venture, because of the impact of micro-environmental because this is the Chinese government policy in order to archieve the equality of principal as well as mutual benefits (Dudovskiy, 2017).

Secondly, to suit local Chinese cultural IKEA adapt strategy of localization, such as, because of the most of the Chinese population IKEA provides balcony section they stay in the apartment. Last but not the least the cooperate level strategy is the strategy of pricing allow the IKEA to compete against the rivals, such as, for some good IKEA cut the costs like in United States single-scat Ektorp armchair below standard price that is cheaper than it sold. IKEA characteristic business as well as the corporate strategy levels helps the Company to acquire the impressive growth in this field (Benson & Bugnitz, 2004).

Value chain is the main strength of the IKEA Company that helps to expand aggressively. This is the basic tool which helps to understand that how much value is added to the business. Value chain are divided into two categories porter illustrates business. To creating and delivering products the primary activities are directly related, while in production process the other activity is not involved directly but both the categories help in increasing the business effectiveness as well as the efficiency. To mobilize the supplier the IKEA modified.

Diversification of IKEA

There are three types of corporate diversification strategies named as limited diversification strategies, related diversification strategies, as well as unrelated diversification strategies. The limited diversification is described as within one industry as well as market when a firm stays and most or else within a single business all of its business activity is focused otherwise dominant the business. Within that industry IKEA’s main business is home furnishings as well as it has largely stayed. Through the IKEA concept Ikea continuously encourages diversification. Ikea usually made that type of item which every one fond of. As you should know that the IKEA is not only the food store they realized that when people visit their stores and shopping they get hungry while shopping. In late 2015 IKEA also teamed up with DreamWorks back to introduce an animation series on YouTube to introduce the new collection

By IKEA Company there are many strategies utilize, such as diversification product. Outsourcing strategy also used by the IKEA for example for most of its products IKEA contract out manufacturing. From independent suppliers all products were sourced. From Eastern European IKEA was out sourcing some goods. Like market segmentation IKEA used different strategy that based on the culture to the nation.  The retail chain's officials say they intend to grow IKEA's sustenance business further as well as in coming years have independent eateries speck urban areas around the globe. As of now IKEA has opened transitory independent eateries in Paris, London and Oslo."It's difficult to work with hungry clients," Diewald included. "When you feed them, they remain longer, they can talk" about that closet, couch or bed as well as settle on a choice to purchase there and after that. As the IKEA is failed in the USA because there is many retailer shop that is very famous in the USA like Wal-Mart. IKEA doesn’t meet the customer’s expectation of the USA. They couldn’t find the cultural demand. As the Wal-Mart provide the   low prices and give quality same like the other retailer. In USA the IKEA faced very difficulties and couldn’t succeed in launching a company there (Spender, 2014).

International Strategy of IKEA

The products that Ikea provide to its customer are quite unique and differentiate the corporation from rest of the retail corporations. Ikea provides training to its staff members so that their skills can be enhanced and they can provide quality services to their customers. Ikea is huge brand and can influence its suppliers. Ikea has strong relationship with its suppliers which allow Ikea to bargain with Suppliers. The products of Ikea have differentiated it from the rest of retailers that is why this is a major capability of the organization which is required to go international. Ikea Corporation provides its services in different countries by keeping their preferences in mind. It means that in international market Ikea has adopted localization strategy.

The business sells its product on low price which means that it using cost leadership strategy. In large cities many people today live in apartments or high rise buildings. Therefore people are looking for more compact furniture which not only looks elegant and modern but also according to the needs of the customers. The customers today look for such furniture which looks modern and contain stylish design. The organization can focus on the customer needs and can provide such products which the customers need the most. Ikea should thoroughly analyze the culture, traditions and value of Kuwait so that it can provide best services to the customers.

Today in the international market the competition is quite higher and there are many retail corporations which are huge competitors of Ikea. The competitors such as Carrefour, Tesco, Walmart and Amazon all of these corporations provide retail services to the customers and become major competitor if the corporation does not differentiate itself from the rest of the retailers. The localization strategy has allowed organization to become successful in the international market. However in the future various issues can arise for the Ikea Corporation because there is a need to provide variety of products to sustain in the long run.

It is good thing that Ikea has kept its focus on its major product that is furniture however there is a need for diversification and provide such products which the customers need. Ikea is the world largest furniture retailer in the world and it has achieved this success through focusing on innovation and need for furniture in the different regions of the world. However this strategy might not work in the future because the corporation has only focused on the furniture and home related products. If the organization wants to cater huge amount of customers it would be appropriate that the organization should divert its attention on other products as well. The organization can done value addition by providing after sales services which might help the organization to expand in various countries.

The organization can focus on the customer needs and can provide such products which the customers need the most. Ikea should thoroughly analyze the culture, traditions and value of Kuwait so that it can provide best services to the customers. As discussed earlier that the furniture market is growing in Kuwait so the company should realize the profit potential and change its strategy to meet the needs of the market.

Recommendation for International Strategy of IKEA

It would be a challenge to keep growing at such a fast pace although the Company IKEA is growing day by day. The company should focus on their strategies and think about that where they should give more focus. In the US presently, in most major cities IKEA, in smaller rural areas to build it might be recommended that. At a low US economy, from IKEA there are many consumers that want to purchase the product but can’t afford to drive to shop the major cities. It is also recommended that the company spirit is keeping by the company faces. In being different IKEA prides itself as well as among other countries maintain a Swedish feel. As the stores age and the product becomes old news in the future this becomes the large problem for the IKEA. It is also recommended that to preserve this spirit management will have to continue while making the decision of business that is helpful for the strategy of company.

One of the solid bases of IKEA competitive advantage is the cost effectiveness. Into several business processes the global furniture retailer is capable to offer low prices this is because of the combination of economies of scale as well as technological integration. Ikea is huge brand and can influence its suppliers. Ikea has strong relationship with its suppliers which allow Ikea to bargain with Suppliers. Ikea have targeted customers which focus on cost effectiveness and different variety of products under one roof. The customers like variety of products and when they get their desired product they become loyal customer and an image of the brand build in the mind of the customers.

The organization publishes catalogues and customers can see the furniture in Ikea show rooms. The customers can see the furniture and other products before buying them. The atmosphere of the stores is friendly and the employees provide high quality customer services. In recent years the organization is trying its best to target new customers by providing huge variety of products at their stores or show rooms. It is recommended that corporation should improve its catalogue even further to attract customers. In international market it can customize its catalog according to local preferences.

References of International Level Strategy of IKEA

Benson, R. J., & Bugnitz, T. (2004). From Business Strategy to IT Action: Right Decisions for a Better Bottom Line. John Wiley & Sons.

Dudovskiy, J. (2017, september 4). IKEA Business Strategy and Competitive Advantage: Capitalising on IKEA Concept. Retrieved from https://research-methodology.net/ikea-business-strategy-competitive-advantage-capitalising-ikea-concept/

Economist, T., & Kourdi, J. (2015). Business Strategy: A guide to effective decision-making. PublicAffairs.

Moon, H.-C. (2010). Global Business Strategy: Asian Perspective. World Scientific.

Morgan, B. (2017, september 30). CMO netywork. Retrieved from https://www.forbes.com/sites/blakemorgan/2017/09/30/3-lessons-learned-from-ikeas-acquisition-of-gig-economy-start-up-taskrabbit/#43d12f1837a8

Spender, J.-C. (2014). Business Strategy: Managing Uncertainty, Opportunity, and Enterprise. OUP Oxford.

statista. (n.d.). Annual revenue of the IKEA Group worldwide from 2001 to 2018 (in billion euros)*. Retrieved from https://www.statista.com/statistics/264433/annual-sales-of-ikea-worldwide/