The founder of IKEA, Ingvar Kamprad registered his firm 1943. In 1958 he opened his very first IKEA store in Älhult, Sweden. From that moment, IKEA have continuously expanded by invaded new countries and opening new stores. Today IKEA is one of the leading home furnishings brands in the world with more than 235 stores in more than 30 countries. From being a one man enterprise IKEA now have astonishing 110,000 co-workers and a turnover of over 20 billion Euros on a worldwide basis (IKEA website 2008).
In this assignment I will start by describing IKEAs competitive strategy and strategic fit before I look into the competitive environment and how IKEA have positioned itself in the market and achieved its business strategy. Finally I will critically discuss whether opening smaller “IKEA Lite” shops is a good idea for IKEA or not.
2. Competitive Strategy
A company’s competitive strategy (also called business strategy) determines what customer segments a company aims to serve by its products and services. Establishing a competitive strategy can be seen as an iterative process where the company make decisions on where they would like to position themselves in the market and what set of resources and capabilities they need to develop to successfully do that, and what kind of resources and capabilities they already possess and where these characteristic can give the company a competitive advantage (Beckman & Rosenfield 2008).
IKEA has targeted customers who seek stylish furniture at a reasonable cost. IKEA’s business idea is;
The company slogan – “Low price with meaning” refer to IKEA’s objective to offer tasteful, cleverly designed products at an affordable price without making the customer feel cheap. This clearly state IKEA’s emphasis ...