IKEA operations management

Operations Management

Critical Evaluation of Relevant Issues - IKEA case

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TABLE OF CONTENTS

2Executive Summary �

2Introduction �

2Company profile and Situational Analysis �

3Growth and profitability �

5Culture �

5Goals �

5Competitors �

5SWOT analysis �

6PESTLE Analysis �

6Political Analysis �

6Economic Analysis �

6Technology Analysis �

7Sociological Analysis �

7Legal Analysis �

7Environmental Analysis �

7Input-Transformation-Output �

8Corporate Objectives �

9Quality �

10Speed �

10Dependability �

10Flexibility �

11Cost �

12Polar representation �

12Process Design �

12Process type �

15Cost �

16Flexibility �

17Quality �

17Process Design - Product Design �

18Recommendations �

19Conclusion �

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EXECUTIVE SUMMARY

Operations Management is how organizations produce goods and services (Slack et all, 2010).

Organizations must be able to align their processes to fulfill customer requirements and ensure they are satisfied, which leads to careful planning and if successful to a competitive lead.

This reports focus on IKEA, and how IKEA operations management has made them one of the leaders in retail in the world, with a deep analysis of IKEA corporate organization and operations management.

INTRODUCTION

IKEA is the most successful furniture retailer in the world. The product line consists of well-designed furniture at low prices. During 2011, IKEA has reported 25.2Billon Euro total revenue and 2.966Million Euro net income. This success was not achieve in one day; it took long time and careful planning in order to achieve customer requirements

COMPANY PROFILE AND SITUATIONAL ANALYSIS

IKEA's is global organization with sales in more than 250 own stores in 24 countries and 32 external franchisees in 16 countries. The stores are supplied through 31 distribution centers, or directly from the 2000 suppliers in more than 50 countries. IKEA's supply chain consequently has a global spread with both sales and purchasing in all major regions of

References: Baraldi, E. (2008), "Strategy in Industrial Networks: Experiences from IKEA", California Management Review, vol 50, no. 4, pp 99. Dolgui, A. & Proth, J. M. (2010), Supply chain Engineering: Useful Methods and Techniques, Springer Ikea (2010), The right quality for IKEA products. Available from http://ikea.com/ms/en_GB/about_ikea/press_room/rightquality.pdf [Accessed: April 8, 2012] Ikea (2010) , Welcome Inside. Available from http://ikea.com/ms/de_CH/about_ikea/pdf/Welcome_Inside_2010.pdf [Accessed: April 1, 2012] Koenig, W. (2000), Geschichte der Konsumgesellschaft, Franz Steiner Verlag. Schroeder, R. G. (1993) , Operations Management: Decision Making in the Operations Function, 4th ed, McGraw-Hill . Margonelli, L. (2002), How Ikea designs its sexy price Tags, Business 2.0. Available from : http://www.ise.ufl.edu/ein43333/articles/How_Ikea_Designs_Its_Sexy_Price_tags.pdf [Accessed: March 28, 2012] Slack, N., Chambers, S. & Johnston, R. (2010), Operations Management, 6th ed, Pearson Education.