Wyatt Earp

MBA 660 Production and Quality Management IKEA Case Sonal Gadre 05/04/10 1. What are IKEA’s competitive priorities? IKEA’s competitive priorities are price and design. They want to develop products that are cheap in price, and yet good in quality. They apply logic from the way they develop their products, to the way it is presented to the customers. 2. Describe IKEA’s process for developing a new product. IKEA’s process for developing a new product is to produce cost effective products that are good in quality and the information about the way the Trofe mug was developed conveys that. A team consisting of designers, product developers and purchasers get together to discuss ways to manufacture the product at the lowest cost possible. 3. What are additional features of the IKEA concept (beyond their design process) that contribute to creating exceptional value for the customer? Additional features of the IKEA concept that contributes to adding value to the customer includes its relationship with suppliers, distribution and logistics, and customer service in their stores. IKEA keeps costs low and offers good quality products. IKEA tries to reduce their prices every year. Going green is the mantra adopted by the company along with ethics which believe in no child labor. The logistics and the way their products are packed to the way they are stored is remarkable. Providing an on-site day care and a cafe makes the shopping experience good for children and their parents, to the way they display their products. The products are packed in such a way that customers can load them in the cars or u-hauls and transport them to their homes or offices. A customer is satisfied after viewing the product they have assembled. 4. What would be important criteria for selecting a site for an IKEA store? The important criteria for selecting a site for an IKEA store would be easy access to the store not just for the customers, but also for suppliers and transporters. The close proximity to ports, roads and rail transport could also be important criteria.