Strategic Advantages Of Ikea

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Introduction

“The IKEA story began in 1943 in the small village of Agunnaryd in Sweden, when founder Ingvar Kamprad was just 17. Since then, the IKEA Group has grown into a major retail experience with 123,000 co-workers in 25 countries/territories generating annual sales of more than 21.5 billion Euros. Today, IKEA is the world largest furniture retailer with its low prices and innovatively designed furniture” . (www.ikea.com)
The aim of this paper is to explain the strategic approach adopted by the firm to expand outside Sweden. This paper begins with an analysis of the home developed firm specific advantages (FSAs) and the strategic approach taken to transfer them to the host countries. Next I will explain the challenges faced by the firm in its internalization process. Further I will illustrate how IKEA responded to its competitors by achieving sustainable competitive advantage.
This paper ends with the study findings and recommendations.

FSAs Developed in the home country

IKEA relied on innovation and diversification to gain success in the foreign market. (Verbeke ,2013) Knowledge based FSAs were developed in the home country and later transferred to the subsidiaries in the host countries. IKEA not only transferred its existing FSAs but also created new knowledge and integrated them with the existing knowledge in the host country. (Verbeke ,2013) Listed are some of the main FSAs developed by IKEA.
Low cost products

The most important FSA for IKEA was

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