Chapter 2: Strategic Planning for Competitive Advantage

The key reason why many people have chosen IKEA's products is that IKEA has competitive advantages.

Cost Competitive Advantage
IKEA products are affordable for most of people to buy. A year ago, I was looking for cheap desk and found out that IKEA's desk was the cheapest but also durable. Its top panel was so sick and wide that I could study with two books, a desk top computer, a cup of coffee, and ice cream. Also, it was stable. I could not believe that it was only $39.99. 
 The biggest reason of its affordable price is because IKEA decides retail price of product at first. After that, it designes and makes product that fits the price. In addition, its designers and developers directly communicate with suppliers in order to reduce the price at factory level. They make adjustments on factory systems to maximize efficiency and use of raw materials. Moreover, one of the most famous IKEA characteristics, the flat package also helps to decrease the cost and price because transporters are able to convey more products at one time with flat packages, and , in addition, IKEA can store more products efficiently with less space.


Product/Service Differenciation Competitive Advantage

One of the most distinct product differenciation competitive advantages is its wide range of products. At first, IKEA products are wide in function. IKEA offers everything we need at home from basics like beds, desks, chairs, curtains, and cabinet, to something we do not usually see in furniture store like plants, toys, and whole kitchens. Also, its products are wide in style. For example, IKEA offers simple carpet as well as colorful or romantic ones. Customers can choose furnitures that fit their house and their preferences.

In addition, IKEA has competitive advantage about its package. As I explained earlier, IKEA's flat-pack allows its customers and transporters bring products home easily. Additionally, IKEA products are designed for most of customers to easily build the products by themselves. Personally, I have ordered a lot of IKEA products and built them all by myself. It usually takes about 30 minutes at most with no difficulty. When I assemble non-IKEA products, I usually need some help from my friends or family, but IKEA products are so easy to assemble that I do not need help at all.

Those IKEA's competitive advantages are attributed to its vision. According to IKEA home page:

At IKEA our vision is to create a better everyday life for the many people. Our business idea supports this vision by offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.

Setting clear vision is very important but more importantly, applying the vision to every products is the key to succeed.