Ikea Operations

1. IKEA competes on function, price, design, and environmental considerations. Also, IKEA makes sure their products are manufactured and produced in ideal conditions ensuring customer and employee loyalty and safety.

2. IKEA's design process:

a. Step 1: Pick a Price – product designers are given a price point at which the item will be sold and their design must stay within these parameters.

b. Step 2: Choose a Manufacturer – the right manufacturer aids in tweaking the product to maximize the opportunity cost. For example, IKEA takes into consideration how much space can be saved in packaging and shipping as well as shelf space. These are considered throughout the design process.

c. Step 3: Design the Product – the selected designer produces a variety of designs from which the IKEA staff selects the best option.

d. Step 4: Ship it – IKEA has always strived to ship their products in flat boxes in order to save space and money.

e. Step 5: Sell it – IKEA sells products online, in stores, and through their catalogues. In stores customers browse displays to get an idea how to style their homes and IKEA maximizes their sales this way. Since IKEA competes on price and design, customers are drawn to their stores.

3. IKEA creates value by keeping their products accessible to customers. Over the past years, IKEA has continually reduced prices making it easier for a larger number of customers to purchase a larger amount of products. Also, customers are provided a unique shopping experience when in their stores through the displays. Because IKEA has strived to work with the same vendors over the years, a trusting relationship has formed; thus, all involved in the manufacturing process are aware of the needs and desires. Finally, IKEA stresses functionality in their design