IKEA expansion in India: infrastructure bottlenecks
In operation management, the bottleneck is the process or the particular phase that has the lowest capacity. It can be defined as a part of the process that impedes the successful implementation of the whole project. In other words, bottlenecks are the weakest links. The influence of bottleneck cannot be always foreseen. When one part is not working correctly, the whole process can be significantly hindered.
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The article under consideration entitled “IKEA may have to overcome infrastructure bottlenecks” was published on the website The Hindu Business Line in 2012. The author of the article is Bindu Menon. The author provides readers with information concerning the potential bottlenecks for the expansion of IKEA in the Indian market. Menon writes that IKEA is more likely to face difficulties with price policies, product variety, real estate, and infrastructure (Menon par. 1).
In the case under analysis, IKEA is ready to present its products to the Indian market. The target audience of the company is a middle-income stratum of residents. Although IKEA is popular worldwide and is ready to invest substantial financial resources to the development, the mentioned bottlenecks can impede the process. Thus, the problem with real estate and infrastructure refers to the fact that land is extremely expensive in the country.
IKEA will have to find ways to create an efficient infrastructure and remain its system of competitive prices. Besides, self-service is a distinctive feature of IKEA’s markets. However, it can be rather a challenge to educate potential consumers of the company’s “do-it-yourself” system. IKEA should pay particular attention to the problem of infrastructure and evaluate its competitive advantage in comparison to other Indian furniture retailers.
Capacity planning of General Motors in China
The notion of capacity is essential for operation management. Capacity can be defined as the maximum limit of products or services that can be offered or manufactured by the company within a particular time limit. Capacity planning is the process that aims at the identification of the product availability that is necessary to meet the demands of the consumers. When the production capacity and consumers’ needs are not equal, the discrepancy occurs, and it results in inefficiency.
The article that exemplifies the issue of capacity planning is entitled “GM to Put $12 Billion into China, Hike Capacity 65%” was published on the website Automotive News in 2014. Hans Greimel is the author of the article who dwells on the plan of General Motors to invest in the China market to meet the increasing demand. The demand refers to the luxury and crossover cars in China. General Motors plans to invest $12 billion by 2017. The primary goal of the company is to increase the capacity to 65% by 2020 (Greimel par. 1).
The article under consideration is an example of capacity planning that aims at not only meeting customers’ needs but expanding demand as well. Thus, General Motors should meet the increasing demand for luxury and crossover cars. Besides, the company plans to introduce more models of automobiles in the market and enhance output in such away. The primary principle of General Motors is that capacity is crucial for staying competitive. Although the pace of enhancement is slow, it brings substantial results. That is why the company’s capacity planning is mostly concerned with the intensive increase in market share.
Greimel, Hans. GM to Put $12 Billion into China, Hike Capacity 65%. 2014. Web.
Menon, Bindu. IKEA may have to overcome infrastructure bottlenecks. 2012. Web.