Analysis of IKEA's Competitive, Operations, and Marketing Strategies

Q1: Aligning competitive, operations and marketing strategy

If you look at a range of management textbooks, you will notice that a very high proportion have IKEA, the Swedish furniture company, as one of the prime examples of a successful organization. Everyone who has visited IKEA, in almost any country, has noted the unique approach to self-service, whereby the customer spends potentially many hours viewing displays of furniture and then collects the modular components from the warehouse next to the tills before leaving, taking home their purchases to assemble them themselves. There is no doubt that the business model applied by IKEA is regarded to be one of the most successful for a retailer in the past 20–30 years. Consumer demand remains strong and when IKEA opens a new store, it tends to generate much interest. A few years ago, IKEA opened a store in Edmonton in Greater London. On the day an estimated 6,000 people tried to attend the store opening and the panic to obtain sales bargains became so intense, one customer was stabbed in a ?ght over a discounted sofa.

Academics are always keen to highlight IKEA’s success, but it is interesting to note the unintended functional bias in these perspectives. In their introductory text to marketing, Dibb and Simkin (2013,p.42) use IKEA in their ?rst chapter, stating:

Low prices have been the key to IKEA’s success, but price alone cannot create an international long-term marketing success story. Products are updated consistently to match consumers’ expectations and lifestyles. In-store service and staff training are integral to the IKEA shopping experience. Store sites are chosen to maximize catchment areas, to make access easy for shoppers and to bring the brand name to the attention of the whole community … Promotion emphasizes the ‘style without expense’ philosophy and the IKEA name … IKEA has a forceful, well-directed marketing strategy actioned through primarily one tightly developed marketing mix for the core superstore operation. The result is a successful, expanding company, satis?ed target customers, highly motivated personnel and unhappy competitors.

Importantly, these activities are only a small part of IKEA’s total operations management effort. But they do give an indication, ?rst of how operations should contribute to the business success and, second, what would happen if IKEA’s operations managers failed to be effective in carrying out any of its activities.

Q1: Aligning competitive, operations and marketing strategy (35 marks, (300 words)

A-Discuss IKEA’s competitive strategy, operations strategy and marketing strategy.

B-Is the operations strategy aligned with the competitive strategy? Discuss in terms of the four key areas of operations strategy.

C-Is the marketing strategy aligned with the competitive strategy? Discuss in terms of IKEA’s target market.

Q2: The five performance objectives (30 marks, 300 words)

A-The 4Vs of operations influence the operations design. Discuss the 4Vs of operation at IKEA 

B-discuss the impact that these dimensions have on the cost of operations. 

Q3: IKEA’s supply chain (35 marks, 300 words)

A-Discuss the meaning of supply chain management.

B-As completely as possible, discuss the supply chain for IKEA from raw materials to consumer purchase.