What are IKEA’s competitive priorities?
IKEA’s competitive priorities basically fall into two major categories: price and design. It wants to have the greatest number of people afford, at the lowest cost possible, its good quality and functional products. They put logic in the design of their products which helps IKEA to price lower than competition while maintaining certain quality standard. 1. Describe IKEA’s process for developing a new product.
IKEA’s process for developing a new product is not just about changing the physical attributes of an item, say its Trofé mugs. What is crucial in the design is the cost to be incurred in producing one unit of mug. To determine this cost, a team is organized consisting of designers, product developers, and purchasers who gather to discuss how to make the product at the lowest cost possible. Setting the objectives and limitations of the product is defined here. In theory, this is described as a quality function deployment (QFD). 2. What are additional features of the IKEA concept (beyond their design process) that contribute value for the customer? Additional features of the IKEA concept that contributes to adding value to the customer includes its relationship with suppliers, distribution and logistics, and customer service in their stores. To maintain the quality of their products and keeping its costs low, IKEA’s relationship with suppliers is very crucial. Aside from rationalizing the production process, IKEA developed a code of conduct for its suppliers that include provisions for forbidding the use of child labor in the factory and heightened environmental awareness. Ethical consideration in manufacturing and operations is an essential element of businesses. Low cost does not mean that it can justify for poor manufacturing processes and abuse of sources of raw materials. With an excellent distribution and logistics system, IKEA is able to provide its customers with low...
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