Ikea

This morning I encountered an interesting article in the WSJ discussing furniture retailer Ikea (For those who are interested, it can be found here: http://online.wsj.com/article/SB10001424052970204301404577172282991870056.html?mod=WSJ_hp_LEFTWhatsNewsCollection).

The article states that although the retail environment has been rough, Ikea has succeeded and is gaining market share. Its success has been largely attributed to its low-cost strategy, which is effective in attracting cash-conscious consumers during hard times. The furniture is not custom, and in fact has to be assembled by the consumer, which allows Ikea to provide their product at such a low price. The furniture retailer is doubling-down on this strategy as it vows to continue slashing prices in order to pass on supply chain cost savings to its customers.  In terms of Porter's generic competition model, Ikea is definitely focused on cost leadership and is squarely in the NW quadrant. So far this strategy has proven to be quite successful for the retailer.