please explain the concept and provide the solutions Q4: You got some basic idea
ID: 335344 • Letter: P
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please explain the concept and provide the solutions
Q4: You got some basic ideas about IKEA's business strategies from the article 'What is Strategy?' and according to Michael E. Porter IKEA's strategic positioning can be described as need-based. Assume IKEA is going to market relatively expensive high class copies of 18th century furniture which is against their current positioning. What threats IKEA might face with the new product and briefly explain why? (Answer your question based on content of the above mentioned article)? (10p) 714 13p 1544 352pExplanation / Answer
Being on the lower end of the market, and providing the most affordable furniture to the people is the mainstay of IKEA. This, coupled with unique IKEA experience when the customer visits their facility and the self assembling of the furniture are some aspects which are unique to this company. Providing no frills service of highest standards alongwith an affordable and good quality product is something which exceeds the ecpectations of most customers.
If the company forays into copy of expensive 18th century furniture, the customer profile will be entirely different and surely they will have high expectations. To exceed their expectations will not be easy this time, because the company wil have hardly any experience of such type of product. The new set of customers will not assemble the furniture for sure, even if they want to ( due to complex construction). That will again call for comprehensive training of employees who might not only have to assemble it for the customers, but also attend it in case of part replacement, dissembling or repairs. Further, IKEA brings simplicity, affordabilty and elegance into its furniture by studying users' lifestyles and has expertise in this domain. The luxury furniture will be a new business and it will have to tread without any customer insights backing up.
All these factors pose a threat of failure of the new product for IKEA, which will not only deteriorate its image in the new target customers' minds, but also affect the cult status it enjoys in its existing customers' outlook.
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