Analysis for Cost Leadership Strategy and Core Competitiveness Points of IKEA CO.
Abstract
The achievement of IKEA CO. is a typical case of the cost leadership strategy, the study of which will play an important part in the development of China’s retail industry. The paper shows the outstanding achievement of IKEA in recent years and dissects the main points and the effect of cost leadership strategy through investigation. The results of analysis indicate that although it has been sixty years since the establishment of IKEA CO., the company still maintains sound development momentum in recent five years. The characteristic strategies of IKEA CO. mainly include four factors: design method modularization and standardization; differentiation design and Swedish design style; limited service and experiential marketing; global production management and logistics system. And the concept of design modularization has led the occurrence of the IKEA effect. There are three methods to reduce the transportation and storage cost: production modularization and standardization to cut the storage cost; global production management and logistics system to reduce the production cost; offering customers limited service to decrease the labor cost. There are three methods to improve the core competitiveness of IKEA CO.: design differentiation to satisfy the different demand of customers; Swedish design style to strengthen the brand effect; experiential marketing and brochures advertisement to promote customers’ satisfaction.
Keywords
IKEA CO.; Recent Achievement; Cost Leadership Strategy; The IKEA Effect; Core Competitiveness
Publication Date
DOI
10.12783/dtem/iceme-ebm2016/4157
10.12783/dtem/iceme-ebm2016/4157
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