IKEA’s Hybrid Strategy :
IKEA’s Hybrid Strategy IKEA’s cost reductions are available outside its differentiated activities
Achieve cost leadership through
multi level competitive advantage on supply side
Low cost logistics
Large retail units in suburban areas
“ProSumers”
IKEA’s Hybrid Strategy :
IKEA’s Hybrid Strategy IKEA concentrates on building its differentiation on the basis of its:
Marketing
Product Range
Logistics
Store Operations
IKEA’s Hybrid Strategy :
IKEA’s Hybrid Strategy Marketing
Target the global middle class
localisation strategy in global markets
Consumer tastes are merging
Product Range
9,500 lines
Carry Basic product range in each store
Place great emphasis on product lines that appeal to local tastes
IKEA’s Hybrid Strategy :
IKEA’s Hybrid Strategy Logistics
Furniture is flat packed
Stack more, reduce storage space
Customer transports it home and assembles it
Store operation
Accept low Margins in return for high volumes
Shopping Experience
Efficient Processes, JIT,own global....
Modified Value Chain :
Modified Value Chain Value Value
Value Value Supplier Customer
IKEA’s Hybrid Strategy :
IKEA’s Hybrid Strategy IKEA’s customer expectations of service levels are low allowing for cost reductions as customers are prepared to transport and build their products
A unique cost structure flat pack gives IKEA as low cost distribution channel
A global retail giant such as IKEA can achieve greater volumes than competitors so margins may be better because of its lower cost base
This allows IKEA to sustain a low cost high quality advantage.