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How Can Porter's Value Chain Model Help Explain the Source(S) of Ikea's Competitive Advantage?

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How can Porter's Value Chain model help explain the source(s) of IKEA'S competitive advantage?

Ikea is a Swedish global furniture retailer, established in 1943 by Ingvard Kampard. It is well known for it’s wide range of functional, uniquely designed, low-priced home furnishings that has 330 stores across 40 countries. With its annual turnover reaching 140billion USD many are wondering what the stores secret to success is.
This report will take a strategic approach into analysing IKEA’s competitive advantage through Porter’s value chain model, which divides the actions of a firm into two categories: support activities that can assist businesses to become successful in the marketplace, in Ikea’s case these are Human Resource Management, firm infrastructure, procurement and technology development. The second category, which this essay will look closely at, are the primary activities such as inbound logistics, operations, and outbound logistics, marketing and sales and service.
IKEA’s supply chain management has gone from decentralised to centralised planning of its network of suppliers, distribution centres (DCs), stores and forwarders. This has taken them from a fragmented management to a coordinated, centralised supply chain planning (Jonsson, Rudberg and Holmberg, 2013). With IKEA’s stakeholders demanding to know the origins of the supplier’s ethics towards their workers and the environment, IKEA are recognising that their supply chain must be sustainable, transparent and not opaque, creating a fundamental competitive advantage within its market (The Guardian, 2016). With over 300 stores in more than 30 countries and 42 distribution centres worldwide, Ikea try to control the vast majority of its supply chain, from designing, manufacturing and warehousing all the way to its retail stores in order to sustain control and low costs. Ikea have 1,400 suppliers of

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