IKEA is regarded as the largest furniture retailer in the world as per the records of 2008. It is a Swedish company, which is registered in Netherlands and sells appliances, customized furniture and home accessories. The company was founded by a 17 years old boy, Ingvar Kamprad, who now happens to be the richest person in the world, in the year 2013. The company is well-known because of architectural designs that they provide their customers for all kinds of furniture and appliances. They also provide interior design work, which is attached with eco-friendly simplicity. Its cost control techniques, details of operational process and incessant product development, along with the corporate attributes, have aided the company to maintain a lower price for customers. During the period of global expansion, it has lowered price of products on an average of 2%-3%. As of January 2014, the company owns around 349 stores across 43 countries. It has been recorded that the company had sold products, amounting to $23.1 billion, in 2010. It is identified that sales of the company has increased by 7.7% from the previous year. The company website displays over 12,000 products to customers, along with clear pictures of IKEA range of products, in order for the latter to gain interest in the company products. The number of visitors, who visit IKEA’s website every day, has been recorded to about 470 million in 2013. It has been identified that in 2013, IKEA has been the largest user of wood, as the company has been noted to use about 1% of the total wood available on the earth.
IKEA concentrates on selling wide range of products. The company sells nearly everything, which are required for furnishing a home, including furniture, plants, toys, kitchens and many more. The products, which are provided by them, have unique styles and the function of good quality and style is complimenting products to become most attractive and satisfy customers need. The company accepts the challenge of producing products at a lower price. Any company can make higher quality products at a high price, but IKEA provides its customers with the best quality, along with the lowest price possible, on the product. To provide high quality products at low prices, the company has undertaken cost effective and innovative techniques, which have made them strong enough to rule the retail market with confidence. The whole production process has been reviewed by designers, which has brought in new packing methods and such, thereby reducing cost of manufacturing.
The main customers of the company are the households and businesses. However, the company has tried its best to transform the whole mass into their customers. Customers of the company are offered the lowest price that is prevalent in the industry.
The companies are operating in highly demanding market place and are competing against each other to retain their respective customers. They are also interested in increasing their client base by attracting customers of their rival brands. Thus, companies invest a lot of effort to understand their unique position in the market, where they are operating in. They also spend a lot of time in creating new customer value, so that increasing number of customers are attracted to their products and services and remain loyal to the brand. The business uses the understanding for aligning processes, actions and resources, in accordance with strategies taken by the companies. Thus, these company strategies include the impact of the order qualifier and order winner and also, ways to manage the process design, human resources, supply chain, capacity, quality and innovation (Heung and Ngai, 2008).
The order winner is the specific attributes that helps a company to attract more customers for their products and services. They are also regarded as competitive advantage of the company. The order winners actually concentrate on strategic initiatives, which relates to quality, delivery, speed and reliability of the delivery.
The order winners of IKEA can be elaborated as the following:
2) Lowest price
3) Product packaging
4) Brand name
Order qualifiers are identified as those competitive attributes, which a firm foregrounds to remain competitive in the market place. The following are order qualifiers of IKEA:
1) Service level
2) Delay in the services
IKEA have concentrated on their operation management for success. The company understands its customer and the market as a whole. The way of controlling the network of operation and delivery of products are very important for the company, so that they can rightly position their product in the market, at the right time. The operations of IKEA consider the following activities:
1) The stores’ layout is arranged in such a way that it can manage smooth and efficient flow of customers, which is also known as the process design.
2) The company stresses on designing their products in a stylish way, so that customers are attracted by the packaging. This is known as product design.
3) The company ensures that all employees contribute equally in the success of the company. This is known as job design.
4) The company locates its stores in places close to their target market in order to easily supply their goods to suppliers as well as customers. This is otherwise known as supply network design.
5) The company focuses on the delivery of products to their stores and this is also known as the supply chain management.
6) The company emphasises on the fluctuations of demand. The method is known as the capacity management.