Question

PLEASE USE DETAILS AND EXAMPLES, SOMETHING THAT HAS NOT BEEN USED BEFORE.

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:

• Who are your top 2 global competitors in the market?
• Provide a strengths, weaknesses, opportunities, and threats (SWOT) analysis for each competitor.
• Why are they direct competitors?
• What is their competitive advantage?   
• Could you form a cooperative strategy with any of the competitors?
  • If so, how?
  • If not, why?
• What strategies could you use to build a competitive market profile?
• What is balanced scorecard?

Answer 1

Top two global competitors:

Mike was completely right when he said that several office furniture companies are thriving. Indeed there are hundreds competing only in the U.S. market. That gives an idea of the count in the global context. A detailed research has led me to the conclusion that the same applies to custom furniture manufacturers as well. To be a leader in the market, it is important to compete with the best.

Our top two global competitors in the market are IKEA and Steelcase. IKEA, a Swedish company, is best known across the globe for designing and selling ready-to-assemble furniture, home furnishing items, and kitchen appliances. It is also recognized as the largest furniture retailer in the world since the year 2008. Steelcase, a U.S. based company, on the other hand, is the manufacturing leader of furniture designed for office use, hospital use, and even schools. The company is driven by the belief that their furniture is the result of inventive research. They seem to be the biggest competitors, as they are leading the major segment of the global market.

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SWOT Analysis of IKEA:

The SWOT Analysis of IKEA is as follows:

Strengths:

• The company considers the use of key performance indicators to identify and measure its strengths.
• It has been able to build a strong brand image across the globe.
• It is consistently implementing innovative ways to cut costs.

Weaknesses:

• In recent times, it has become difficult to maintain standards and quality considering its huge size spread across the globe.
• There is a major problem is maintaining a balance between fine quality and low prices.

Opportunity:

• The business has a significantly growing demand for its products sold at low prices.
• There is a growing demand in the market for environment-friendly products.

Threats:

• There are many competitors entering the market with their low-pricing strategy.
• There has been a decrease in consumer spending due to reduced jobs and rising inflation.

SWOT Analysis of Steelcase:

The SWOT Analysis of Steelcase is as follows:

Strengths:

• The company has a significantly strong brand portfolio. It has invested billions to build this image.
• It has a comparatively successful track record in the implementation of new ideas and projects and earning high returns on capital expenses.
• It has been able to maintain a strong cordial relationship with dealers and distributors, which have helped promote the company’s products.

Weaknesses:

• The company has loopholes or lack of choices in the range of products they sell in the market. These loopholes can easily allow new entrants in the market.
• There is a lack of efficient and proper financial planning. The company can utilize its liquid asset ratio and current asset ratio more efficiently as compared to its current scenario.

Opportunity:

• The company can enter new emerging markets worldwide because of the government’s recent initiatives to open up new markets, which takes into account other factors like new technologies and free trade agreements.
• The government’s environment-friendly initiatives open up the opportunity for Steelcase to tie up with government contractors to provide environment-friendly products.

Threats:

• The rising isolationism in the U.S. economy can result in parallel reactions from other governments where the company is selling. This would affect its international sales significantly.
• There has been a decrease in consumer spending due to reduced jobs and rising inflation.

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Direct competitors:

The direct competitors of IKEA in the global context are Walmart, Amazon, Wayfair, American Woodmark, Pepperfry, and other private label brands.

The direct competitors of Steelcase in the global context are Haworth and iMovR, Avery Dennison, Humanscale and Keilhauer, Herman Miller, and Knoll.

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Competitive advantage:

IKEA’s low-cost strategy has been the actual reason behind its success in the international market. It promises quality goods to its customers at low prices. This strategy has been a competitive advantage for the company over its competitors. The company states that it has been able to stick to this through rigid cost control and consistently efficient productivity.

Innovation and design is a strong competitive advantage of Steelcase. Its innovative edge has led to its success over the years. Through a variety of services it provides, the company continues to focus essentially on innovative goods and it has been capable of doing this by developing its research abilities.