Operations Management Case Study Ikea
10. Opportunities abound, aware of pitfalls
Poneman, Baum & Eisman (2007) argued that there was a worldwide expansion of the strongest operators and formats in the globalization of retailing. There came the natural result of the victory of value when American consumers had to settle for average value in low to moderately- priced furniture for several years. Many manufacturers’ assortments were low quality items, many specialty stores were highly markup even though they were in low price ranges. Many manufacturers were inefficient, and product development capability was necessary to deliver unbeatable value (King, Oakes & Furrow, 2013). At this point, no one was actually satisfying with the large markets for their great value, high quality, and contemporary furniture at low to moderate prices. Then, Ikea entered into the field, it was one of the world class Swedish company. Ikea was very successful in Canada and Europe, and now it can be found in most of the countries in the world.
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There were two main dimensions which were managerial dimension and technical dimension. Managerial dimension was about encompassing concepts, systems and policies while technical dimension was about the techniques employed such as site selection, store layout, buying, and merchandise planning (Kacker, 2008). For example, the well-known specialty retailer “Toys R Us” had developed a unique retailing formula which blended the concepts of self service and discounting with specialty retailing. The store also used a grid layout because the store not only offered a variety of merchandise, most importantly, it allowed customers to move freely along the aisles. As a chain-store organization, it involved in large-scale buying operations, which literally lead to cost savings and lower
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Why Ikea Go International Case Study
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2051 Words | 9 PagesFounded in Sweden at 1943 by Ingvar Kamprad, IKEA is a value-driven company with the vision “To create a better everyday life for the many people”. As of January 2009, the company became the world’s largest furniture designer and retailer. Currently, IKEA owns and operates 351 stores in 43 countries across Asia, Europe, North America and Australia. The company’s product range consists of 9,500 home furnishing articles, of which they are known to be well-designed, functional and inexpensive.
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