Consider your familiarity with either Home Depot or Walmart.Discuss how your chosen retailer succeeds with its Functional Strategy; e.g., illustrate at least two ways which the organization achievesefficiency(sections 4-2a through 4-2k in Ch.4).

4-2a Efficiency and Economies of Scale

4-2b Efficiency and Learning Effects

4-2c Efficiency and the Experience Curve

4-2d Efficiency, Flexible Production Systems, and Mass Customization

4-2e Efficiency, Automation and Artificial Intelligence

4-2f Marketing and Efficiency

4-2g Materials Management, Just-in-Time Systems and Efficiency

4-2h Research and Development Strategy and Efficiency

4-2i Human Resource Strategy and Efficiency

4-2j Information Systems and Efficiency

4-2k Infrastructure and Efficiency

Secondly, after reading the short Strategy in Action (p.152) on IKEA, how would you describe IKEA's Business-Level Strategy?Give an example from the writing to support your view.

IKEA: Value Innovation in Furniture Retailing

IKEA, the privately held furniture retailer, is a global colossus. The world's largest furniture retailer, in 2014, IKEA had 361 stores around the globe, 164,000 employees, revenues in excess of 30 billion Euros, and 861 million customer visits to its stores. The company started out with a single store in Sweden in 1958. The vision of the company's founder, Ingvar Kamprad, was to "democratize furniture," making stylish, functional furniture available at a low cost.

Kamprad's vision was a reaction to the existing market for furniture. Furniture was either seen as an expensive heirloom, which typically had to be ordered from the manufacturer after the consumer had made a purchase decision in a retail store, and might take 3 months to deliver, or was poorly designed, low-quaity, cheap furniture sold in discount stores. As IKEAs strategy evolved, its core target market became young professionals looking to furnish their first apartments or homes with stylish but inexpensive furniture that could be disposed of when they were able to buy more traditional, heirloom-style furniture.

Over the years, Kamprad assembled a world-class team that designed stylish, quality furniture that emphasized clean, "Swedish" lines. An important goal was to make IKEA offerings 30% cheaper than comparable items produced by rivals. To drive down costs, Kamprad and his associates worked out ways to reduce the costs of making and delivering this furniture. They cooperated closely with long-term suppliers to drive down material and manufacturing costs. They designed furniture that could be flat packed, which reduced transportation and storage costs. They pushed assembly onto the consumer but gave them lower prices as part of the bargain. They even made the consumer responsible for pulling inventory out of the warehouse, which was typically placed between the product-display areas and the cash registers. As a result of these actions, all taken at the functional level within the company, IKEA was able to offer more value to its target market than its rivals, and to do so at a lower cost. Through astute market segmentation and a well-thought-out strategy of value innovation, IKEA redefined the furniture market not just in Sweden but in countries around the globe, in the process becoming the world's largest furniture retailer and making Ingvar Kamprad one of the world's richest men.

Source:C. W. L. Hill, "IKEA in 2013: Furniture Retailer to the World," in C.W.L Hill, G.R. Jones, and M. Shilling,Strategic Management, 11th edition (Boston: Cengage, 2015).