Thus we see that the low cost leadership strategy of Southwest Airlines is a function of hundreds of related activities, all of which interrelate and contribute to a significant competitive advantage. IKEA, a global furniture retailer, based in Sweden also has a clearly defined market strategy and a host of supporting activities. IKEA's target market is young, working people of somewhat limited means who may have children and may prefer to shop after work. To insure low cost, IKEA designs its own furniture and then farms out production around the world to skilled subcontractors. To insure compliance with rigorous quality standards, IKEA takes an ownership position in its supplier firms.
Furniture is displayed in very large retail outlets with room-like displays.
In many cases the furniture has to be assembled by the purchaser. Operational effectiveness is a necessary, but not sufficient condition for achieving a competitive advantage in the marketplace. Achieving a competitive advantage means adopting the appropriate generic strategy and then implementing that strategy with a network of supportive activities. For the purpose of illustration, consider the example of a new, small distance education university that is privately owned. Nontraditional, distance education is estimated to be taking an appreciable share of the traditional higher education market.