Coursework | Taimoor Asif |
MISIS # | M00338502 |
Module Number | MBA 4641 |
Module Professor | Mr. Okan Geray |
Submission Date | 27th November 2011 |

IKEA Case Study

  1. Explain, in detail, the aspects of IKEA strategy that make it a Hybrid strategy.

  * IKEA’s strategy is based on selling high-quality, Swedish designed, self-assembly furniture products at low price.

  * The IKEA business idea is: ‘We shall offer a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.’ IKEA targets price-conscious young couples and families who are willing and able to transport and assemble furniture kits.

  * The low-price strategy, seeks to achieve a lower price than competitors while maintaining similar perceived product or service benefits to those offered by competitors.
Low price is not appealing unless, it represents good value for money. This is where IKEA is able to make a real difference. IKEA is committed to having a good relationship with their suppliers and so they are able to purchase good quality, economically produced designs that are bought in bulk to keep costs down. By making all their furniture’s flat packed they cut down on transportation and assembly costs as well. Besides, the packaging allowed shoppers to haul their own stuff home, another saving.
  *  The company has been able to sell its standardized products across Europe, and as a result was able to build considerable economies of scale into its operations and maintain a price advantage over its competitors.


  * The next option is a broad differentiation strategy providing products that offer benefits different from those of competitors and that are widely valued by buyer. The aim is to achieve competitive advantage by offering better products or services at the same price or enhancing margins by pricing slightly higher.

  * The...