IKEA Case Study
What is IKEA’s Competitive Strategy?
-high quality goods at lower prices, minimizing costs (reducing costs of production), more
flexible and can either have higher prices and keep more profit or lower prices because of
reduced costs, self- assembly, strong bond with suppliers, a huge variety of goods, store layout,
produce high volumes of standardized products, good quality furniture at accessible prices
-they compete on: design, differentiation, variety, low cost, added value
How does outsourcing rug production to India fit this strategy?
-rug making expertise there (good quality), lower costs (low wages), take advantage of excess
rug making capacity (large population in rural areas, over supply of employees and production,
low demand for rugs at domestic levels)
What immediate action should IKEA take to address this issue?
-How should they deal with Rangan Exports? Options? Consequences?