Essays on IKEA Company Positioning Strategy Case Study

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The paper 'IKEA Company Positioning Strategy" is a great example of a management case study. Competitive positioning is one of the greatest concerns of many organizations today. As the number of business organizations operating in an industry increases, the need arises for the management team to come up with outstanding strategies. These strategies should enable the concerned organization to gain a competitive advantage over its competitors. Today, there are various strategies applied by organizations to gain a marketing edge (Wright et al. 1990, p. 23-28). In developing an effective, competitive strategy, an organization is required to carry out various generic marketing analyses including SWOT, marketing mix, and PORTER’ S five analysis.

This literature provides an overview of IKEA Company’ s competitive strategy models. IKEA Company IKEA Company was founded in 1943 in Sweden by Ingvar Kamprad. The name IKEA is an acronym that comprises the initials of the name of the founder, Ingvar Kamprad, the name of the firm where he was brought up (Elmtaryd), and the home parish of Agunnaryd. IKEA Company is a privately-owned worldwide furnishing company. It operates in more than 42 countries and has more than 70,000 employees most of whom work in Europe.

The company sells and designs ready-to assembles furniture like desks, beds, home accessories, and appliances. IKEA Company is regarded as the largest furniture repair in the world. Company Mission and Philosophy For a company to achieve its objectives, it must have a mission and philosophy which forms part of the culture of the company. IKEA’ s mission is to present a wide range of furnishing items of good function and design, excellent quality, and durability at low prices.

This will enable the majority of people to afford and buy products from the company. The main target for the company is a customer who looks for value and is willing to work a little bit in serving themselves, transporting the furniture home and assembling the furniture at a considerable price (Nag, Hambrick & Chen 2005, p. 935– 955). IKEA customers mainly come from low to middle-income families. IKEA’ s business philosophy can be explained best using the four goals of the IKEA stores. The first goal is to act as an efficient and staffed sales mechanism.

The second goal is to demonstrate the home furnishing solutions with home furnishing ideas. The third goal of the company is to serve as a qualified home furnishing specialist. The fourth aim is to offer a day out for the family. SWOT analysis   SWOT analysis assists to establish the strengths, weaknesses, opportunities, and threats of a company (Johnson & Scholes 1999, p. 55). The strengths of a company are advantageous positions, which companies have developed in their strategy. IKEA as a retail outlet and a multinational has several strengths.

First, it has a prominent brand known all over the world, with numerous numbers of loyal customers. Secondly, its capital and financial strengths are essential for the company’ s expansion and financial undertakings. Thirdly, has a well-motivated team of employees with corporate citizenship. In this case, the employees are devoted to organizational objectives and needs. There are two weaknesses facing IKEA Company. First, the company outlets are located in major cites which limits its market coverage in the middle and small-sized towns. Secondly, the company advocates for standardized products across the world where it operates (Xiaofei 2005, p.

84-85). There are different preferences and styles preferred in various markets and hence some products may not be acceptable in some markets. On the other hand, IKEA has the opportunity of expanding its market in the unexploited market across the world. In addition, the company may advocate for product differentiation depending on market demand instead of concentrating on standardization. IKEA is faced with two threats in its operations. First, there are other competitors dealing in different lines of products while IKEA concentrates on furniture.

Such competitors can attract a large number of customers who make their shopping activities under one roof (Mintzberg, Quinn & Ghoshal 1999, p. 69-90). Secondly, IKEA has been in spotlights concerning the number of lawsuits by some of its employees on the violation of labor laws across the world. This likely to lead to a high rate of employees’ turnover.


List of References

Wright, P, Kroll, M, Kedia, B & Pringle, C 1990, ‘Strategic Profiles, Market Share, and Business Performance’, Industrial Management, Vol. 32, No. 3, pp. 23-28.

Johnson, G, Scholes, K 1999, Exploring Corporate Strategy. Prentice Hall, Hemel Hempstead, Europe.

Mintzberg, H, Quinn, JB & Ghoshal, S 1999, The Strategy Process, Pearson Education Ltd, Harlow.

Woo, C & Cooper, A 1982, ‘The surprising case for low market share,’ Harvard Business Review, Vol. 60, November–December, pp. 106–113.

Gronroos, C 1994, ‘From marketing mix to relationship marketing: towards a paradigm shift in marketing’, Management Decision, Vol. 32, No. 2, pp. 4–32.

Mulcaster, WR 2004, ‘Three Strategic Frameworks,’ Business Strategy Series, Vol. 10, No. 1, pp. 68–75.

Nag, R, Hambrick, DC, Chen, MJ 2005, ‘What is strategic management, really? Inductive derivation of a consensus definition of the field,’ Strategic Management Journal, Vol. 28, No. 9, pp. 935–955.

Markides, C 1999, ‘A dynamic view of strategy,’ Sloan Management Review, Vol. 40, No. pp. 55–63.

Daqian, L 2005, ‘The model of IKEA in China: the leader of home culture,’ Economic Tribune, Vol. 3 pp. 57-59.

Xiaofei, Z 2005, ‘The dilemma of foreign furniture company in China’, New Economy Weekly, Vol. 16, pp. 84-85.

Benshun C 2003, ‘Analysis IKEA China attack strategy’, Modern Business Trade Industry, vol.15 No. 7, pp. 28-30.

Zhi, L 2011, ‘The Competitive Advantage of IKEA and IKEA in China,’ Thesis in logistics and innovative management, pp. 1- 34.

McGuirk, J 2011, Habitat’s Identikit crisis: on design, viewed February 29, 2012


Czinkota, MR & Ronkainen, IA 2007, International marketing, Cengage Learning, Mason, OH.

Ferrell, OC & Hartline, M 2010, Marketing Strategy, Cengage Learning, Mason OH.

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