Title: Making Strategic Trade-offs - Institute For Strategy And Competitiveness - Harvard Business School
Headings: Making Strategic Trade-offs
Making Strategic Trade-offs
IKEA vs. Traditional Furniture Retailers
IKEA, Sweden
Choosing what not to do
Why do Trade-offs arise?

Content: Making Strategic Trade-offs - Institute For Strategy And Competitiveness - Harvard Business School



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Unique Value Proposition
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Making Strategic Trade-offs
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Continuity of Strategic Direction
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Making Strategic Trade-offs
× Creating a Successful Strategy
Unique Value Proposition
Distinctive Value Chain
Making Strategic Trade-offs
Fit Across the Value Chain
Continuity of Strategic Direction
Making Strategic Trade-offs
Robust strategies typically incorporate multiple trade-offs. The very best have trade-offs at almost every step in the value chain. Consider IKEA, the Swedish home furnishings giant. IKEA’s value proposition is to provide good design and function at a low price. Its target customer is what IKEA calls the person “with a thin wallet.” In choosing its particular kind of value and the activities needed to deliver it, IKEA has accepted a set of limits: it does not meet all the needs of all customers. In every major value-adding step in the process of creating and selling home furnishing, IKEA has made different choices from the “traditional” home furnishings retailer. IKEA vs. Traditional Furniture Retailers
IKEA, Sweden
Choosing what not to do
A strategic position is not sustainable unless there are trade-offs with other positions. Trade-offs occur when activities are incompatible.