Pts 1 dif hard ref differentiation strategy 6

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PTS:1DIF:HardREF:Differentiation strategy6.Describe the risks of a differentiation strategy.
PTS:1DIF:ModerateREF:Competitive risks of the differentiation strategy7.Describe a focus strategy and its risks.
PTS:1DIF:ModerateREF:Focus strategies8.Using Ikea as an example, demonstrate how the focused cost leadership strategy can be well implemented.
ANS:Ikea, a global furniture retailer, follows the focused cost leadership strategy. Young buyers after style at a low cost are Ikea’s market segment. For these customers, the firm offers home furnishings that combine good design, function and acceptable quality with low prices. According to the firm, low cost is always in focus. This applies to every phase of their activities. Ikea emphasises several activities to keep its costs low. For example, instead of relying primarily on third-party manufacturers, the firm’s engineers design low-cost, modular furniture ready for assembly by customers. Ikea also positions its products in room-like settings. Typically, competitors’ furniture stores display multiple varieties of a single item in separate rooms and their customers examine living room sofas in one room, tables in another room, chairs in yet another

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