It was impressed upon his young mind that the most should be made out of the limited resources and that the essentials of modern living may be acquired at reasonable cost. From the time he set up his first business in the 1930s and registered as IKEA in 1943, Kamprad’s overriding strtegy was to adopt every cost-cutting solution that did not compromise quality and innovative ideas (Ikea.com, 2012). The diagram that follows shows IKEA’s key strategic thrusts by which it seeks to flesh out Kamprad’s vision. Central to the strategy is the simple and creative design which is well-received by the market; it is distributed through large stores with a wide range of products, all priced inexpensively, designed in flat packs, and requiring customer assembly. IKEA’s Strategic Direction (http://sites.google.com/site/faizahmadali/IKEA.JPG) The manner by which the stores provide customer accessibility to a wide selection of useful products, and the manner by which the products are inexpensively priced, easily stored and transported through flat packed boxes, and engage end-user participation in their assembly all contribute to customer engagement through low cost, durable quality, and aesthetic appeal. 2. Three organizational tensions, and how the strategic direction addresses them. The diagram on the next page shows a strategic map of the company, identifying in blue the central goal of providing furniture and accessories for the home, the four principal strategic objectives arranged in a square around the goal, and the elements that support the goal and objectives. http://www.monografias.com/trabajos89/strategy-michael-porter/image011.jpg The elements that contribute to the realization of the objectives or goals provide clues to various organizational tensions between the firm and its stakeholders, due to factors both internal and external to the organisation. By tension is meant the existence of clashing interests between stakeholders and the company. For IKEA, some customers have taken issue with (and even ridiculed) the manner by which IKEA products presume the customers’ adequate capability in assembling the product. This creates tension in the need to design easy-to-assemble units vis-a-vis the need to engage customer participation in the assembly process. Internal IKEA store layout featuring products’ flatpack design (Facenda, 1999) A second source of tension is the need to create a variety of designs, which clashes with the need to reduce manufacturing costs. Ordinarily, cost reduction is best achieved through product standardization, rather than product diversification needed to produce a variety of products . By seeking to diversify but at the same time mass-produce, tensions are created between the production unit of the firm and the marketing unit which identifies the variety of product lines offered in IKEA stores. Finally, a third source of tension is in the size of IKEA stores and its repercussions upon the community. The size of IKEA stores are as a rule large enough to enable customers to access all possible
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IKEA 1. The strategic direction of the organization “The IKEA vision is to create a better everyday life fo rthe many people. We make this possible by offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.” – IKEA These words greet the visitors to IKEA’s corporate website and introduces them to the central inspiration behind the company – that rather than create expensive furniture that only a few can afford, the company finds greater challenge in creating products that enable more ordinary people to live a better life…
Critical reflection : p.16 3. References : p.18 Part A: Analysis Introduction Ikea is one of the most prominent home furniture manufacturers in the world. Headquartered in Sweden, Ikea company was founded by Ingvar Kamprad. In the 1940s-1950s, Ingvar Kamprad shaped the development of IKEA into a furniture retailer.
Included in operations management are the determination of the location of the firm’s facilities such as its plants and stores, and the design of the layout of these facilities. There are general factors that must be taken into consideration in deciding upon the location and layout of facilities in general, and specific factors that are at play when the location and layout pertain to retail distribution facilities such as stores and outlets.
Effective leadership is the most important determinant and driver of success within a company or organization.Through proper leadership and a positive organizational culture employees are motivated to achieve high performance. As a result, the company is able to meet its objectives of providing quality to its customers and hence becoming competitive and successful within the market.
This is done to ensure free feedback from clients, and to enable the staff or colleagues to understand the store’s policies, goals and objectives in order to be more motivated and enthusiastic about the store leading to increased output and profits. Asda also focuses on transparency of its activities both to stakeholders and colleagues.
Ingvar Kamprad has founded IKEA during the year 1943 and the Swedish furniture retailing giant has established its presence over 33 countries across the globe (IKEA PS, 2012). IKEA’s Marketing Place or expanded distribution is probably most important marketing mix element for IKEA.
Overview of IKEA Define IKEA In this age of stiff economic condition and tough competition, IKEA is one of the recognised brands of Sweden, dealing in the segment of ready-to-assembled furniture’s, fittings, appliances, and many others stylish accessories of the residence.
Employees that are motivated will enhance the productivity of the firm. On the other hand, employees that are not motivated will have a negative effect on the productivity of the organization. For instance, IKEA is renowned for production of quality products. This is directly proportional to the motivation it gives its employees.
Consequently, the minimization of the stock movement is crucial in the success of operations and subsequently saves on time and operational costs. The industrial plant layout should be in such a way that the movement between the working centres are