IKEA: Goals And Strategy

1804 Words8 Pages
Question 1: Structure
Goals and Strategy IKEA’s goal is to “create a better everyday life for the majority of people,” (Armstrong & Daft, 492). Ingvar Kamprad created this goal as he was aware there were a large group of people who wanted fine-looking furniture but whose needs could not be met by the expensive products often found in the home furnishing industry, (Armstrong & Daft, 492). Kamprad stated that IKEA’s strategy is, “to offer a wide variety of home furnishing items of good design and function at prices so low that the majority of people can afford to buy them,” (Armstrong & Daft, 492). IKEA’s strategy explains how they plan on achieving their goal; through offering furnishing items that everyone can buy and take into their living
…show more content…
Besides their inventive distribution method their use of unassembled products that come with IKEA assembly tools and instructions are wildly different from the norm. IKEA uses e-commerce to expand their customer reach, as IKEA stores may be too far for some customers to travel to. IKEA also has a catalogue which is another avenue that they take to secure customers in different ways that appeal to different age groups, (Armstrong & Daft, 492). IKEA Family Club is also a means for IKEA to gain access to customer feedback on a wide range of things, which aids to improve products themselves and service both in store and online.
Question 2: Strategy
Porter’s Competitive Strategies Ingvar Kamprad created IKEA to offer furnishing items that could be afforded by a majority of people, (Armstrong & Daft, 492). This idea held by Kamprad, has transcended throughout the organizations seventy five years of operations and still continues to be a fundamental piece of IKEA. It also offers insight into the strategy used by IKEA; in terms of Michael Porter’s Competitive strategies, IKEA uses a low-cost leadership
…show more content…
As described by the textbook, organizations using a low-cost strategy “seek efficient facilities, pursue cost reductions, and use tight controls to produce products more efficiently than its competitors,” (Armstrong & Daft, 63). IKEA embodies this strategy through outsourcing manufacturing to keep their overhead costs low and through their continuous effort to work with supplies to find ways to cut costs while maintaining quality, (Armstrong & Daft, 491). Low cost is one of the main way that IKEA has been able to insulate themselves from the attacks of their competitors, as competitors are unable to come close to competing with IKEA’s
Open Document