What is the competitive advantage of your top 2 global competitors in the market?
IKEA and Herman Miller are two global rivals. These are two companies that evolved with an excellent competitive advantage in the furniture manufacturing industry. For instance, IKEA has gained and sustained a competitive advantage due to its affordability. The efficiency of the supply chain has backed this affordability. The combination of a strong brand image and innovation is in the limelight, and these have been the primary competitive sources for the organization. Herman Miller, on the other hand, gets a competitive advantage due to its high-quality furniture products. The firm has concentrated on design and comfort, making it a little different from others. The firm has also gained an advantage due to excessive customization to meet the unique needs of customers. Both global competitors have multiple strategies to get a competitive edge, and it has been a major threat to the organization in the international furniture manufacturing industry (Kunc, 2018).
Provide a summary of the strengths, weaknesses, opportunities, and threats (SWOT) for each competitor.
IKEA Swot Analysis
Strengths: High brand image, affordability, high market share, and innovation are significant strengths in the internal business climate.
Weaknesses: There have been some quality concerns, as products have been perceived as less durable. DIY is challenging and complicated for customers. Sustainability issues, especially in terms of deforestation, are also in the limelight.
Opportunities: The organization can augment its e-commerce domain to boost sales. There is a need to concentrate on responsible sourcing to evade ethical issues. Mergers and acquisitions are good options to enter a new market and contain a larger market share. It is the best time to set the foundation for diversification within its affordable portfolio (Adnan, Khan, & Islam, 2019).
Threats: An economic downturn has influenced customers’ buying and consumption patterns. Supply chain disruptions, especially in the global business domain, are also apparent. Intense rivalry with evolving preferences has also threatened IKEA.
Herman Miller: Swot Analysis
Strengths: The firm has maintained its quality measures, which is the biggest strength. The firm has differentiated itself through ergonomics and design, which justifies progressive innovation. Customization is a great strength to integrate with the unique needs. The firm also has a good brand image due to its premium design and quality (Kunc, 2018).
Weaknesses: The firm has comparatively high prices, making it less affordable for an immense range of customers. It also has a limited product portfolio compared to IKEA and other rivals, indicating narrow targeting. Brand awareness needs to be better, which is leading to slow growth.
Opportunities: The organization can enter new markets through strategic alliances, mergers, and acquisitions. It is an excellent strategic option to enhance its targeting. It is a perfect opportunity to strengthen collaboration with global designers and architects to improve differentiation and innovation. The firm must strive for affordability regarding limited furniture products to be relevant with more considerable scalability (Dringoli, 2016).
Threats: There is intense competition at the global level, compelling the organization to keep moving in the presence of high-end brands. Economic decline in countries with the shift in regulations can influence the firm’s operations. Counterfeiting has also been a concern, which is impairing reputation and image.
What strategies could you use to build a competitive market profile?
Changing the business level strategy is one of the critical strategic interventions to build a competitive market profile. For instance, instead of just concentrating on cost leadership and affordability, the organization can come up with an integrated cost leadership and differentiation strategy to make a difference (Holt, 2022). New quality measures in the internal setting with an improved product portfolio can help differentiate the brand and give a competitive advantage. The firm can strive for a new strategic alliance to share people, processes, and technologies when it comes to product diversification. This related diversification is a competitive strategy which is enough to build a competitive profile (Kunc, 2018).
References
Adnan, A., Khan, A. N., & Islam, M. S. (2019). Competitive Position of Bangladesh and China in the Global Clothing Export Market: An Analysis of Revealed Comparative Advantage. Trends Economics and Management, 13(34). doi:10.13164/trends.2019.34.9
Dringoli, A. (2016). Merger and Acquisition Strategies: How to Create Value. Edward Elgar Publishing.
Holt, K. W. (2022). Differentiation Strategy: Winning Customers by Being Different. Taylor & Francis.
Kunc, M. (2018). Strategic Analytics: Integrating Management Science and Strategy. John Wiley & Sons.
Discussion Requirements
You talk with Mike and Tiffany at lunch. “You’ve done some great research and brought up some good ideas to implement in the presentation,” you say. “There is one element that we are missing.”
“One of the most important aspects of the strategy: our competitors,” Tiffany states.
“I’ve already done some analysis, and there are many in the global market. It seems like there are several office furniture companies thriving, but not as many custom furniture manufacturers,” Mike elaborates.
“Well, we need to provide the board with some solid competitors. I’ll work on finding our top two,” you say.
Complete the following:
What is the competitive advantage of your top 2 global competitors in the market?
Provide a brief summary of the strengths, weaknesses, opportunities, and threats (SWOT) for each competitor.
What strategies could you use to build a competitive market profile?
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