Disadvantages Of Ikea's Competitive Advantage?

Competitive advantage can be defined as the benign position a firm is searching for the sake of being more lucrative than its competitors in the market ("Definition of Competitive Advantage", 2012). It involves being able to communicate a greater recognized value to a target market than its rivals can provide ("Definition of Competitive Advantage", 2012). Competitive advantage can be successfully established by offering a better-quality product or service, lowering prices and increasing marketing efforts. In order to ensure a company is able to gain profits in the long run, a company has to sustain its competitive advantage. Sustainable competitive advantage pertains to preserving the company’s benign position over the long run, which can further enhance a company’s image in the marketplace, its valuation and its future

There are five competitive forces that can intimidate the profitability and the market share of the organization which are the entry of new competitors, the threat of substitutes, the bargaining power of buyers, the bargaining power of suppliers, and the rivalry among the existing competitors (Porter, 2008). Firstly, we know that the bargaining power of suppliers is tenuous and IKEA has 1002 suppliers in 51 countries and lack of discrimination between products conveyed by suppliers’ increases IKEA’s bargaining power (The competitive advantage of IKEA). Furthermore, IKEA has exercised its enormous bargaining power to promote its CSR programs to its suppliers along with purchasing the products and supplies for a low price (The competitive advantage of IKEA). Resulting in the support provided by IKEA, their suppliers ameliorated their energy efficiency by 19% in year 2014 compared to 2010 (The competitive advantage of