Strategies Used by IKEA: 1-‐ Low-‐cost leadership strategy: IKEA has a unique business model that connects the needs of our customers with the possibilities on the factory floor. With a deep knowledge about life at home and the challenges most of us have with limited space and wallets on one hand and big dreams on the other, IKEA often develops its products directly on the factory floor. The starting point for product © 2011 by Osama Albarrak. All rights RESERVED 10
developers and designers is always the price. Together with our very skilled suppliers, we make sure to get the most out of the possibilities in the production plants. We adapt the sizes and constructions of our products so we can produce, package and transport them in the most efficient way. We also put a lot of effort into developing materials, to improve them and save resources. A limited range of articles and big sales volumes make it possible for us to keep costs and prices down. On top of this, our customers contribute to the low prices by collecting, taking home and assembling the products themselves. Today, they can even design their kitchen or wardrobe themselves using our computerized planner tools. We do our part, you do yours – together we save money.