IKEA Corporation is known worldwide for its unique business concept, implemented with the help of hundreds of huge pavilions and a developed infrastructure network. IKEA differs from the furniture stores that existed before it, shifting part of the work to the buyers since they need to assemble the purchased furniture themselves. But thanks to these differences, the company established itself as a reliable manufacturer of cheap and stylish furniture.
Thus, the organization has several competitive priorities, achieving which it gets a significant competitive advantage over all other companies in the market. First of all, IKEA is aimed at a younger audience and, accordingly, at a lower price segment. Almost all of the company’s production is subordinated to the goal of creating a wide range of cheap furniture for all occasions, which at the same time will combine design, quality, and functionality (“Vision & business idea,” n.d.).
By targeting these points, IKEA can effectively compete with other furniture stores. In addition, IKEA strives to make the process of purchasing and delivering a product as easy as possible. For example, flat furniture boxes are used that take up a minimum of storage space. Thus, the main competitive priorities of the company are the price and quality of the product, the convenience of delivery and the services provided, and the flexibility in presenting a variety of products that meet the different needs of the buyer.
This is partly made possible by the established process of developing new products. First of all, practicality and functionality are at the core of IKEA’s aesthetics, which shape the sustainable image of the entire company (Baer, 2016). Although many may find the IKEA design boring and monotonous, these products combine maximum reliability at a minimum price. According to an interview with an IKEA designer, the process of developing a new product usually begins with a series of quick sketches aimed at finding the right idea (Baer, ​​2016). This is teamwork, and throughout the design process, there is a constant exchange of materials and prototypes between designers and suppliers, which allows for correcting most of the inconsistencies.
For the implementation of concepts, 3D modeling and printing technologies are actively used. Recently, IKEA is increasingly using various automated technologies, which allows the company to reduce its products’ prices further. In addition, the company actively follows popular trends, trying to improve and develop its products. Therefore, the latest IKEA collections are subject to two main directions: using more environmentally friendly materials and creating more flexible and lighter furniture. Finally, two more aspects that are considered when creating a design are the focus on mass production, combined with a modular design element that should be interchangeable (Yu, 2019). Thus, developing a new IKEA item goes through many stages to create an optimal final product.
The factors described above, both from the consumer’s and the manufacturer’s side, add up to a big picture of why IKEA products have such high value for the buyer. However, there are also several additional factors associated with the concept of a corporation. Firstly, IKEA stores provide an exceptional environment where the buyer can immediately find interior solutions and see precisely how the desired products fit into a particular context. IKEA provides customers with a wide range of services, including in-store childcare, so shopping turns from a necessity into a pleasant pastime.
Such actions are shaped by the vision of the business of the heads of IKEA, built on the enthusiasm and desire to make this world a better place. The company’s designers are constantly developing new concepts, which will make people’s lives more convenient. In addition, one of the main priorities of the business is the desire to leave a positive mark on the world (“Vision & business idea,” n.d.). Elements of such a policy can be traced in all company actions, which, among other things, is reflected in the purchasing side. By buying IKEA products, a person can be sure that they are made considering modern environmental requirements and will serve them for a long time.
That is why one can always find quite large crowds in IKEA stores. However, another essential factor in this matter is the location of stores, which are selected based on several factors at once. First of all, IKEA is located where people need inexpensive furniture, where the store’s target audience is. As a rule, these are large cities and regional centers with a lot of young people. Secondly, usually, IKEA stores are located near important transport hubs. Such placement allows achieving two goals at once: the convenience of delivering goods to the store and the convenience of consumers entering and taking out products from it. Striking examples, in this case, are IKEA stores located in New York: two stores of the chain are located on the coasts of the gulfs and next to major highways at the same time.
Thirdly, due to the specifics of building pavilions for IKEA stores, large areas are required. That is why stores are often built on the outskirts of cities or near industrial zones, where there are vast tracts of land, and not in the centers of residential areas. Thus, there is a clear pattern to which almost all IKEA stores are subordinate and provide the maximum convenience of working with the company.
References
Baer, D. (2016). A top Ikea designer reveals how to make furniture for the masses. Insider. Web.
Vision & business idea. (n.d.) IKEA. Web.
Yu, R. (2019). Core elements of IKEA’s successful product design. Journal of Physics: Conference Series, 1168(3), 16. Web.