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Corporate strategy refers to a situation where the selection and development of markets or industries are done. This selection involves the environment where firms compete. A strategy, on the other hand, refers to a plan that turns both the mission and vision of a company, guided by the company's values, into a set of actions that give the company a competitive advantage and a cutting edge in the market. The success of any company or business organization is based on the strategic plans the company adopts and implements. These strategies help the company to remain in business even when the competition is at a cut-throat. This essay aims at looking at the goals and the corporate strategy f IKEA (Rugman & Verbeke 2017).
IKEA is the world's largest furniture retailer that designs and sells self-assembly furniture, kitchen, bathroom, home furnishings as well as home accessories. In the financial year 2016, the company made revenues of 35 billion Euros. This was attributed to one of the company's key competitive advantages which were extensive knowledge about its customers. The company designers constantly design new products that are stylish and attractive in the eyes of the customers. The products are easy to transport and assemble.
IKEA objective is to provide a wide range of home furnishing products of good design and function, excellent quality, and durability, at prices that a low so that all customers can afford to buy them. This objective has been the driving force towards the company's success in the years IKEA has been in operation. The innovative products at low prices keep the company a notch higher above its competitors in the market. IKEA has a mission statement which is to offer a wide range of products that are well designed, functional furnishing at low prices that as many people as possible will be able to afford them. The mission statement explains what IKEA aims at achieving which is to produce long-lasting products at low prices. The mission statement also outlines how the company's vision which is to create a better everyday life for the majority of people will be achieved. The mission also highlights IKEA value which is to offer good products at a low price. IKEA goal is to be a beacon of sustainability and affordability in the home as well as the countries the company opens branches (Ghaur et al., 2016).
A look at the strengths of IKEA shows that the company is a charitable company, offers low prices for its products, is a one-stop furniture shop as well as offering access to food and beverage services. The company is also environmentally friendly and offers child care facilities.
IKEA has always been driven by the desire to design and develop products that are based on the consumer's everyday needs. IKEA is a company that is known for its modernist designs in various types of appliances and furniture. The company's interior design is always associated with eco-friendly simplicity. This is in line with the ever-changing customer tastes and preferences in the modern world. There is increasing demand for homes as people acquire mortgages as well as putting up their new homes. This, therefore, means the more expanded market for IKEA products. This has made IKEA innovation team move with the increasing demand by creating products based on the needs of the customers. Customer needs come first in IKEA Company.
The second strategy at IKEA is keeping prices of its products low. For the many years IKEA Company has been in operation, cost control has been the driving force. In fact, the company lowered its product prices to between two to three percent up to the year 2010 when the company was on a global expansion program. There is nothing as satisfying to a customer as acquiring a product at a pocket-friendly price and still keeping the desired quality and design. This is what IKEA Company has for decades done. It has been observed that the self-assembly nature of IKEA cuts the company's operational and functional costs.
The third strategy adopted by IKEA is providing functional, attractive and reliable furnishings and products. The products IKEA Company offers for sale are very attractive to the eye and have smart furnishings. These products range from ready to assemble furniture and homeware.
The year 2012 saw IKEA adopt another very crucial strategy of people and planet-positive sustainability strategy. This strategy outlines the company's approach towards achieving a positive social and environmental impact. IKEA is in the forefront in protecting the environment by producing products using methods that don't pollute the environment. The methods used in production are also socially acceptable. This sustainability strategy helps to bring the vision, mission, and the company values to drive innovation and keep the innovative nature of IKEA business (Ghazzawi & Palladini 2014).
The other very important strategy at IKEA is the company's financial stability, independence, and flexibility. This strategy has helped the company in its growth and expansion strategy where it has been able to open doors to over 49 countries.
Reports from IKEA indicate that as of November 2017, the company had opened 415 stores in 49 countries. In the financial year 2016, the company recorded a sales turnover of 6.4 billion euros. This was a 7.6 percent increase compared to the 2015 turnovers. IKEA has over twelve thousand products on its official website. In the year 2015-2016, over 2.1 billion people visited IKEA website. One of IKEA's flagship products is furniture which the company sells in a pre-assembled manner. This is to reduce shipping costs. IKEA is at the forefront in offering sustainable approaches to diverse consumer culture. The company employs an integrated approach to its manufacturing and design approaches (Sharan & Prasad 2017).
As can be seen, it is clear that the success of a company is based on the strategy the company adopts to attract and maintain customers. IKEA has kept the customers on the front line and has continued to design products that are stylish and still maintained the prices low.
Rugman, A., & Verbeke, A. (2017). Global corporate strategy and trade policy. Routledge.
Ghauri, P., Wang, F., Elg, U., & Rosendo-Rios, V. (2016). Market driving strategies: Beyond localization. Journal of Business Research, 69(12), 5682-5693.
Ghazzawi, I. A., & Palladini, M. E. (2014). The shift from economic to social responsibility: the tale of two arguments. Journal of Legal, Ethical and Regulatory Issues, 17(1), 15.
Sharan, S., & Prasad, S. K. (2017). Evolution of Brand Culture: A Post-Industrial Revolution Story. Holistic Approaches to Brand Culture and Communication Across Industries, 107.
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