Ikea: Design and Pricing

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Case 1
IKEA: Design and Pricing

Submitted by

Roger Manning

Prepared for
Jeff Peterson
BUSN 6110
Fall II, 2008
Webster University


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Executive Summary

In the first four chapters of the textbook, IKEA was an example for operations and supply management (OSM). Operations and supply management is defined as the design operation and improvement of the systems that create and deliver the firm’s primary product and services. The IKEA case study outlined the framework IKEA uses to improve product design and consumer satisfaction. The IKEA vision is to create a better everyday life for people. IKEA attempts to do this by offering a wide range of well-designed, functional home furnishing products at prices everyone can afford. The IKEA Concept began when Ingvar Kamprad, an entrepreneur from southern Sweden, had an innovative idea. In Sweden, the soil is thin and poor, the people have a reputation for working hard, living frugally and making the most out of limited resources. Ingvar started his furniture business in the late 1940s, he applied the lessons he learned to the home furnishings market. Ingvar's innovative idea was to offer home furnishing products of good function and design at prices much lower than his competitors did by using simple cost-cutting solutions that did not affect the quality of products. Ingvar used every opportunity to reduce costs. He scraped and saved in every way possible except on ideas and quality, this is how the IKEA Concept began (IKEA’s Corporate Web site 2008). Through the answers to the questions below, we can see how IKEA uses...
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