Assignment #6 IKEA

Topics: Cost, Price, IKEA Pages: 2 (537 words) Published: April 6, 2014
Assignment #6 IKEA Operations and Technology Management

1. What are IKEA’s competitive priorities?
In order for IKEA to achieve and maintain competitive priorities, they need to have a cost advantage leadership and differentiate their manufacturing, products, and services with high quality. IKEA’s battle plan is “keep making offerings less expensive, without making them cheap. IKEA’s prices are on average 40% less then their rivals. In addition to that, while IKEA’s rivals’ prices tend to rise over time, IKEA reduced its retail prices by a total of 20% during the years 2009 to 2013. That allowed IKEA’s sales in some products to increase by an average of 40%. The reason behind IKEA’s success on maintaining “high quality at a low price” is their smart focused operation strategy. Starting from developing to selling their products, IKEA always use and follow smart Ideas that reduce their operation costs without lowering the quality, thus, reduce prices, increase sales, and increase their market share. Examples of IKEA’s smart Ideas are demonstrated on the answers of the following questions.

2. Describe IKEA’s process for developing a new product.
Again, IKEA’s icon “high quality at a low price” is considered from the first step of the operation process. IKEA is very carful and pay a lot of attention to cost. Cost is their main first priority on purchasing materials, choosing suppliers, and discussing design. Their developing team are professional, specialized, and understand IKEA’s main priority very well. They work to the hardest of their ability to make the highest quality for the lowest price at the right time for the right costumer. For Example, they choose one basic color (green, blue, yellow or white) for their products because they are less expensive then other mixed complicated colors. 3. What are additional features of the IKEA concept (beyond its design process) that contribute to creating...
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