Competitive advantage of IKEA

INTRODUCTION

In this modern hyper belligerent marketplace, a union must be a powerful competitor to survive. A community must take a powerful schema in order to develop a powerful competitor. But what makes a good strategy for the company?

A good business strategy would be that to take in a competitive advantage over other competitors. So what is a competitive advantage? And how company can be capable to have a competitive advantage over other competitors? This essay would now discuss what a competitive advantage is and how a company can build a competitive advantage over other competitors in the selfsame(prenominal) industry by using two furnishing stores, Ikea and Courts as examples.

COMPETITIVE ADVANTAGE

Definition

A company is said have competitive advantage over its competitors when the company earns profits that are above the normal average in the industry where it competes.

Types of competitive advantages

According to Michael Porter, there are two introductory types of competitive advantage, namely:

Cost Advantage- A cost advantage is the magnate of the firm to deliver the same product or service at lower cost than competitors. This can be achieved by means of using economies of scale, production efficiencies, low labor cost or better access to raw material and etc.

Differentiation advantage- A specialism advantage is the ability of the firm to deliver products or go that are different from the product mix of competitors.



Due to the added cost in achieving differentiation for the product or services, differentiated products or services are often marketed at premium prices.

Model of warlike Advantage

Source: www.quickmba.com

Competitive advantage derives out of value a firm is able to create for its buyers that exceeds the firms cost of creating it. Value is what buyers are willing to pay, and top-hole value stems from offering lower prices than competitors for equivalent benefits or...

Its actually a good essay about IKEA on how it uses cost lead strategy to remain competitive in the market, personally I find it is very useful.

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