Strategy

What Is Strategy

1. Strategy is the means to perform activities in a different way. Hence, with the use of strategy, a company can outperform rivals so long as it can maintain this established difference. Strategy is all about being different wherein it forms an edge over its rivals. It is finding a unique position to attract customers. What makes strategy different from operational effectiveness is that unlike strategy, operational effectiveness only performs the same activities better than the rivals. It is just about better utilization of resources and better implementations of its processes, which provide direct levels of differentiation. However, in spite of the constant improvement that operational effectiveness can bring such as superior profitability, it is still insufficient because rival companies can easily adapt to the practices of another company and attain the same growth. Still, operational effectiveness is necessary to effective strategy formulation and implementation because it is the continuous improvement of functional performance of a company. It is then the role of strategy to mold these functions into a coherent organizational whole that will succeed in the marketplace.

2. The case of IKEA chooses a position as low-cost provider within the furniture industry where customers are targeted under a self-service model. The combinations of functional design, streamlined manufacturing and a modular furniture system have been successful deployed to gain scale economies and a lower cost base. Those combined activities are different to established service oriented activities within this furniture industry. Targeted on do-it-yourself, young families that look for contemporary design and a possibility to combine various furniture into an individual style served as strategic position, taken into account that the service factor has been deliberately altered by choosing a value-cost model, large store displays and self delivery to fit the chosen...