“In the current market you have two options: differentiate or
disappear”. Those were the words of Ingvar
Kampard, founder of the furniture company Ikea.
Since 1943 (year of its foundation), Ikea knew that one of the keys of
success was to apply a business strategy in order to differentiate from the
competitors. At this point, a new concept of selling furniture was born: the
low-cost furniture.
The company’s objective is clear: “Families with medium and low budget
should have access to design and quality furniture”. However, a question
arises… ¿How should Ikea decrease prices? Easy, by decreasing costs.
In order to achieve it, the intermediaries were removed in the production
process. For this reason, the customers play an important role because they
have to pick up, carry and build up the furniture. The motto of this strategy
is clear: “The more you do, the less you pay”.
Apart from
that, Ikea has created its own brand image in the customer’s mind, who perceive
Ikea as a place to spend the day with the family.
One of the keys to achieve this is the Ikea’s restaurant. There you can
have a low-cost meal, which has been specially created for those families who
do not want to spend much money.
A business
strategy should include every department in order to involve the employees in
its way to success. In the light of this, Ikea’s executives refuse a high
salary, because it doesn’t make sense with the firm’s philosophy. Instead of
that, they want a fair salary.
The business strategy of Ikea goes ahead, but as every strategy, it should
be flexible and adaptable to the environment. Nobody knows if this strategy
will be sustainable in the future, but until then, only one thing is sure:
people will enjoy the design and low-cost furniture of Ikea.
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