Introduction toIngvar Kamprad Elmtaryd Agunnaryd (IKEA) IKEA, founded in 1943, is a Swedish MNC that manufactures and saleshouse wares and office wares & goods. It was In the recent year it has dominated markets in 32 countries and thecompetitive market due to the factor “good quality at low price. IKEAs corporate mantra is “Low price with meaning.”
What put IKEA’s product at the top?1. Low price tag2. Function3. Modern design4. Environmental consideration5. Manufacturing under acceptableworking condition
IKEA New Product DevelopmentPrice picking :“The low price begins at the drawing board.”The IKEA’s product design team consists of designers ,productdevelopers, purchasers etc. should get together to contribute with theirspecial knowledge about :1. What willl be the design?2. Material to be used?3. Where, when and whom to supply?
Choosing a manufacturer:-Working with many factories IKEA led to develop a long term relationshipwhich help both parties to buildup a huge fund of knowledge about demandand expectation which helps to develop a product in close relationship withthe supplier and make product cost effective and saves time.
Designing the product:-IKEA uses internal competition to find a designer and select a design ofproduction.The designer should begin the designing process by writing brief explanationabout;1. Product’s price2. Product’s function3. Material to be used4. The fabricator’s capabilitiesThen it is to be send to IKEA’s staff designers and freelancers and need to beupdated until the targeted product sample is not produced.
Transportation of a product IKEA strives to deliver the right number of goods to the right store atright time. The goods are transported from Romania by rail ,road and sea to theIKEA distribution center. Many of the products are bulky so they decided to shipped assembledwhich reduces the cost effectively. IKEA employees ‘mantra is :“We don’t want to pay to ship air.”
Selling The Products IKEA sells a lot of expensive furniture and in a traditional store this isrelatively easy. To keep price low, IKEA sells furniture and other products without salespeople or conspicuous price reductions. The transportation packing are collected for recycling. They put the price tags on the goods which provide interior solution andhelp customer to select items. They provide assembling guideline with the product so that customer canbe easily able to assembled themself at home.
Strengths A low price tag Modern designs for more environment friendly products(e.g., light colour of mugs) Manufacturing under acceptable working conditions The product of IKEA are made in close cooperation with suppliers. Introduction of code of conduct governing working conditions andenvironmental awareness including health and safety. It has efficient transport and storage of products.
Some times to keep low price the company asks the customer to assemble theirfurniture them selves. Sketching for a new product & fixation of price take more time to implement. Salesman of this companies are less as compare to other companies. Many of the IKEA ’s products are bulky. For saving space simple products are redesigned repeatedly which use a lot of moneyand time. Making things flat is IKEA ’s obsession.Weaknesses
Opportunities:- Due to low price and good quality it can conquer the world wide market. Due to the flexibility in design it can enter into the millions of home and interiorplaces.Threats :- Shifting more of its buying from Europe to far east ,shipping time and costs havebecome an more critical concern. Transportation leads to an great impact on environment. Problem of saving raw material and ultimately the environment. Economic factors the recession slows down consumer spending and disposableincome reduces.
IKEA’s corporate mantra “ low price with meaning” to satisfy this IKEA worksnonstop to reduce cost to create a better everyday life for many people.IKEA products broadcast an ethos for living in the modern world :don’t buy anugly pitcher if you can get a stylish one for the same price.IKEA responds to both internal and external issues in a proactive and dynamicmanner by using its strengths and reducing its weaknesses. In order toimprove performance, it must assess its external and competitiveenvironment. Through this, IKEA is able to generate the strong growth it needsto retain a strong identity in the market.Conclusion