Ikea's Process

Ikea’s process for developing a new product includes 5 steps. The steps are; pick a price, choose a manufacturer, design the product, ship it, and sell it. The first step includes determining what the company would like the product to cost in stores. By determining the price of the product in stores, the company can determine what the product will cost. Cost will help determine materials used, colors, or design. The next step, choosing a manufacturer is a step in which the company works with suppliers and manufacturers in order to produce the new product more efficiently. Next the company designs the product by writing a brief that explains the product’s price its function, the materials to be used, and fabricators capabilities. The brief is sent to the staff designers in which many designs are made and refined until settling on one design. The goal of the third step is to get maximum functionality at minimum cost. The shipping step of the process plays a large role in their goal of low cost products. IKEA calculates the right amount of goods to the right stores at the right time in order to reduce costs. Ikea strives to ship efficiently which created the concept of flat shipments. The last step in the process is selling the product. IKEA continues to reduce costs by selling furniture without the use of sales people and price reductions. In order to sell expensive furniture in a traditional store, IKEA strives to create a lush setting with child care facilities and food courts.

3) What are additional features of the IKEA concept (beyond their design process) that contribute to creating exceptional value for the customer?

There are several features of IKEA’s concept that help create exceptional value to the customer. Some of these features include the company asking the customer to assemble their own furniture and having no shipping to customers, they have to pick up their own products. IKEA is able