The paper "Reasons for IKEA Greatness" is a perfect example of a management case study. IKEA is a multinational company with its headquarters in the Netherlands. It designs and sells the home and office furniture that is ready to assemble together with home accessories as well as kitchen appliances. Since it was founded, the company has been competitive in this industry to be the largest furniture retailer in the world. It has branches in more than twenty-five countries with revenue of more than forty billion Canadian dollars. Its success has been attributed to its business strategies which include cost leadership, differentiation as well as its marketing mix which has included successful market segmentation (Chopra, 13).
The company's competitive advantages have also come from its ability to outdo its competitors in this industry by being cost-conscious and innovative. This essay will analyse IKEA's competitive advantages and the reasons for its greatness. IKEA has been able to achieve a value proposition through the delivery of some benefits to its customers. The company has been able to offer fashionable furniture and other home appliances at an affordable cost.
This is a strategy where the company reduces its costs to attract more customers and at the same time maintain its profitability. IKEA has been able to perform above average in this industry due to the command it has in the industry. Selling their products at a lower cost than rival businesses makes the company make more sales and greater returns in the long run (Bartlett and Ghostal, 13). This does not mean that the business should reduce its prices lower than the production cost but reduce the production cost for it to be able to reduce the price of the product the strategy helps the company to give its customers good value for money.
IKEA has been able to reduce the production cost by providing ready to assemble furniture and therefore becomes greater than its competitors (Askalany, 2017). The company has designed its products to offer quality products that are affordable to all classes of buyers. Differentiation is another strategy for making a business unique compared to others in the same industry. The uniqueness should be along a line that is valued by the customers.
This means that the business should conduct considerable research to know some attributes that are perceived as important by the buyers. Differentiation can be based on the company's products as well as the approach to marketing and the systems of selling the products (Byun, 146). IKEA has been able to produce peculiar furniture which can be assembled at home. This is a form of differentiation as other companies in this industry have not been able to do so (Gimé nez, 150). It has also been producing new products to cater to the changing lifestyles of its customers, therefore, attracting more customers and become more profitable.
These products range from upholstered furniture, rattan furniture to coffee tables. They also sell wardrobes, beds as well as hall furniture. Products that are offered by IKEA are always different from its competitors and increase its competitive advantage than rival businesses making the company greater. This has been achieved through more efficiency and continued innovation with the help of customer engagement than their competitors.