Business Competency in IKEA Term Paper

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IKEA is a Swedish company that is well-known for its brightly colored furniture and among the largest furniture retailers in the whole world whose specialty is modern and competitively priced furniture that is Scandavian designed. The company boasts of having about 270 stores in 24 countries. The company's mission is to ensure that they offer their customers a value for their money. Their typical customers are young families of low to middle class income. IKEA's success in the retail industry is due to the vast experience the company has in the retail market, cost leadership and global differentiation. On a global platform, the company is among the world's most successful retailing firms as a result of its unique concept of selling the furniture in kits which require to be assembled by the customers at their homes.

IKEA's Core Competencies

IKEA's capabilities have come up from its unique resources and its core competencies which revolve around a successful retail strategy. IKEA does not carry out its own manufacturing of the products they sell but it works through a network of suppliers all over the world in order to help in maintaining the low-cost position of the company. The company provides the manufacturers with financial and technical assistance hence it has been able to establish lasting partnerships with the producers and suppliers of furniture.so as to secure as well as help the suppliers develop the company has went ahead to launch partnerships as joint ventures in countries like Russia, Poland and China. The research and development activities are all carried out in Sweden due to the typically Swedish style in the furniture whereby the materials to be used and manufactures to do the assembly work are determined.

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The company uses high volume runs so as to cut costs and believe that costs should be kept under control from the design level of this value added chain (Wordpress.com, 2013).

The company designers work together with suppliers in order to build savings into the finished product through designing products that can be availed at low costs. They pack knock-down kits in flat boxes that ensure there is no wasting of space and transport them and store them in an efficient way in the logistics process. With increased fierce competition, IKEA is making attempts of not only to integrate its operations globally and design its products centrally but is also looking to effectively combine technology, low costs and quality all together. IKEA noted strong in-stock position whereby most popular design trends and style were anticipated correctly is something crucial when it comes to keeping their customers satisfied. This is the reason why they have applied just-in-time concepts when it comes to decision making. These are definitely IKEA's core competencies since we have established that it is so successful as a company in fact it is termed as "World's largest retailer of home furnishings."

Entering a strategic alliance

Strategic alliances can be very tricky if a company that is entering one is not careful on how to go about it. This are different from partnerships since partnerships foster mutual benefits while alliances are in place as long as they are of advantage to the parties involved. Regardless of this the concept of….....

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