CASE STUDY

Case Study Analysis

Case Study Analysis

Overview of the Case Study

The case study is related to the famous furniture company known as IKEA which has a title “Will we still love IKEA” written by Kevin Scholes. The factors related to the Products Strategy, Competitive Strategy, Sales Position and the Adoption of Sustainable Model during the Global Recession Period was covered in detail. Therefore, the questions related to the overall strategy adopted by the IKEA in improving their sales operatins and competiting with rivals would be answered in detail.

Question 1

The framework that would be used in defining the detail the aspects of IKEA strategy with reference to the Hybrid strategy is explained with a diagram. The diagram is:



The first element that would be used in the describing the competitive factors of IKEA Corporation is Five Forces Analysis. It is a part of the Generic strategy developed by the famous therorist known as Michael Porter.

Five Forces Analysis

Rivalry in Industry

Across the world, there are many companies in the furniture industry along with a large number of retailers in the market. There are also many retailers which import from countries like China and sell at low price in the market. This shows that the rivalry in the industry is very high.

Bargaining Power of Suppliers

The bargaining power of suppliers is low as it has a properly established relation with the suppliers across the globe. It also has a manufacturing company which shows that the company can threat the suppliers.

Bargaining Power of Buyers

There are many retailers that are involved in the price war with one another. The importers which import from China are also in direct competition. Therefore, the consumers have many alternatives and they can decide the manufacturer from which they will buy. Therefore, the bargaining power of buyer is very high.

Threat of New Entrants

The threat of entry entrants is moderate. It is because the initial investment is not very high. Any individual can open the retail shop but to become a main player in the industry, it is important to invest a large amount of money.

Threat of Substitutes

The style of furniture is changing with the time. As the market is more concerned about the environment, there are many firms which have decided to be green. However, the basic demand remains the same. Therefore, it is safe to say that the threat of substitute is very low.

The company has utilized the combination of the competitive aspect to develop a hybrid strategy. It has used the combination of differentiation through the design and the low cost. This hybrid strategy has resulted in achieving the low price and differentiation as compared to the competitors. This success strategy is based on the ability to provide benefits to the customer through a low price along with having the sufficient margins to develop and maintain the basis of differentiation of design. They focus on giving the customers higher values for the money by giving them more attributes of products as compared to the ...