IKEA Strategic Review

Document Type:Thesis

Subject Area:Business

Document 1

The review of the strategies is mostly carried out with the intention of establishing whether there is any limitation in the strategic mechanisms practiced by the company. The outcome of the review comes in handy in fostering the improvement that should be done to boost the business performance. The review of company strategies is significant since it gives the management a clear picture of whether the strategies applied to fulfill the company goals and objectives as well determining how well the business has thrived based on the strategies applied (Campbell, Edgar & Stonehouse, 2011, 18). The review also helps in modifying new changes to the strategies to keep the business performance at par with the market competition and develop mechanisms for progression. The essence of strategic review is to explore new ways of attaining the consistency of a business in the market in addition to driving a transformative agenda cognizant of the competitive forces.

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Any weaknesses in these strategies should be identified and corrective measures are taken to enhance their competitiveness. The strategies should be constantly reviewed to ensure they are as effective as desired by the IKEA management because of the pivotal role they play in expanding and fulfilling the extensive consumer expectations. Consequently, based on the customers and the kind of products IKEA offers to the market requires the development of diversified product lines and customer oriented strategic measures. The creation of a unique strategy focussing on customer satisfaction will enhance its relevance and continued existence in the global market segments. The numbers of customers they serve are so many that they run the risk of experiencing dissatisfaction based on their varied tastes and preferences (Campbell et al.

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The economies of scale in IKEA can also be achieved through specialization as well as the integration of technology to boost the volume of production. Specialization will result in massive production while integrated technology facilitates enhanced value products resulting in high quality and quantity (Lynch, 2012, 7). The high quantity is what will be spread over the costs incurred during production in an attempt to lower the product cost for affordable pricing in the market. IKEA should also take the advantage of economies of scale and spread its internal costs such as administrative, establishment and marketing costs over a wide range of units it produces. The splitting of costs will allow the entity to lower the cost of products it offers the customers in the market.

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Competitive pricing acts as a strength that will ensure they eliminate the weakness of satisfying up to the last customer. Lastly, lower prices as illustrated explicitly facilitate the attainment of IKEA’s desire to ensure a better everyday life for many people as well as affordable sustainability. Strategic positioning is another tool that IKEA should apply in trying to penetrate the dynamic market. Positioning is a very essential aspect in business that should be considered by the management of any company aspiring to reach different market segments. It enables the business to gain popularity as well as serve its products across various platforms (Barney & Hesterly 2012, 22). The proximity, in this case, helps maintain the quality of the product since there is a great chance of the furniture getting to the customer's residence with less or rather no damage (Barney & Hesterly 2012, 22).

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The move to locate stores at convenient stores also promotes business awareness among many people who end up frequenting the stores and as a result increase sales volume. Additionally, strategic positioning will assist IKEA to handle urgent demands from customers due to the fact that furniture will be at convenient places. The flow of products is also boosted due to the diversified markets. Customers will have a wide range of products to choose from increasing the number of visits to the stores at convenient places. The entity’s products should be at every corner of the cities of various countries so as to discourage any desires of potential competitors trying to enter the market (Porter, 2008, 10). IKEA should emphasize on quality as much as they try to strategically place their stores so that position.

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Quality as well as lower prices gives them the strength that will enable them to drive competitors out of the market. The exit of competitors might give them the opportunity to expand their market niche and be able to rediscover their weaknesses for further improvement. The fact that strategic positioning recognizes the ease with which high-quality furniture and home accessories reach the customers at a lower price due to the reduced transportation cost boosts the performance of the business globally. The initiative will end up providing the business with the resources necessary to expand to other regions (Teece, 2011, 27). The lower prices enhance the awareness of business amongst customers. It will further enable IKEA to hire high trained staffs who will eventually continue with the production of high-end value furniture and home accessories.

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