This paper is an analysis of IKEA’s business structure and plan per the operations management book page 65 and page 66. Four questions were presented at the end of the case. I answered the questions below. 1. What are IKEA’s competitive priorities?
[To the consumer] IKEA’s competitive priorities include: overall attractiveness to the price sensitive consumer while maintaining a level above ‘cheap’ products, trendy modern design element, and overall company frugalness. The opening paragraph in the case study states that IKEA’s battle plan is to: “Keep making its offerings less expensive, without making them cheap.” This is proven by IKEA’s actions in manufacturing and design. Many of their products are made different ways to minimize raw material use in order to lower cost enough for that price sensitive consumer. That consumer typically is frugal but not cheap. They want a high quality product but not a cheap product like at Wal-Mart where no design, quality materials, or thought went into it. An example is the $ .50 coffee mug. Another example is on page 66 where the IKEA says: “Why buy an ugly pitcher when you can buy a stylish one for the same price?” Another one of IKEA’s competitive priorities is their shopping experience. IKEA has a funky store that attracts their exact consumer they are trying to bring into the store… a 18-30 year old who is likely educated, lives in a good neighborhood, who doesn’t have much money yet but likely will in the future. They have a taste for the designed goods but on a budget. Additionally, IKEA’s stores are set up in a logical fashion with large directions so they are very easy to navigate. They put their products installed into mini-rooms that portray a house. This allows the consumer a clear visual idea of how it’ll look. IKEA’s minimum waste goal is described on page 66 as waste in the manufacturing proves to be a “Deadly sin.” They don’t like to even waste money by shipping air… so...
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