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IKEA’s Competitive Priorities, Product Development, and Site Selection Case Study

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IKEA’s Competitive Priorities

One of the essential competitive priorities is to provide cheaper products compared with other companies. At the same time, IKEA ensures its customers do not feel cheap about buying these products. Thus, it can also be said that the main competitors are high quality at low prices. Chase and Robert (2018) state that the central concept under the reduced cost is flat shipping. The idea of creating furniture that can be constructed manually allows us to reduce costs drastically. Finally, it reduces shipping costs but tries to maintain the design outlook of the product.

IKEA’s Process for Developing a New Product

The process is to choose the low price for the product and then find the most suitable manufacturer that can meet this demand. After the right manufacturer is completed, it is essential to find the appropriate design that will consider the cost, shipping, function, and materials to be used. As the design is adopted by the company, it is important to consider the storage of the product to maximize the utility of space. That also goes in accordance of the code of conduct given for each supplier (Chase & Robert, 2018). Lastly, the product is being sold in IKEA stores that consider multiple features of entertainment and showroom design to fit the product to the whole concept.

Additional Features of the IKEA Concept

One of the additional features is being eco-friendly. Trendafilov (2018) states that one of the leading corporate values of IKEA is sustainability, that is, maintaining the shipping and manufacturing procedure environmentally friendly. No waste concept is used among most manufacturers and stores to minimize the raw materials used in the process. In addition, increasing cost efficiency also reduces the waste of production for manufacturers.

Site Selection Criteria for IKEA

As all IKEA stores require large space, it is vital to be located in the suburbs or other scarcely populated parts of the city. Still, the city should be big enough to maintain the demand for the store. In addition, the size of the store is justified by several facilities located inside, like the restaurant or child-care facility (Chase & Robert, 2018). If the country is economically developing, IKEA stores can be located only in the most significant cities and those that are growing at faster rates. Lastly, it requires the city to undergo massive construction or be populated with a population that can afford IKEA products, primarily in countries with middle and upper numbers GDP.

References

Chase, R. B., & Robert, F. J. (2018). Operations and Supply Chains management. McGraw Hill.

Trendafilov, D. (2018). . Punctum, 4(1), 165–178. Web.

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IvyPanda. 2024. "IKEA's Competitive Priorities, Product Development, and Site Selection." November 16, 2024. https://ivypanda.com/essays/ikeas-competitive-priorities-product-development-and-site-selection/.

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