Operations Management IKEA Case Study

The IKEA Operation Plan

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Table of Contents

Introduction. 2

The dissimilarity between the IKEA Operations Plan and the most Furniture Retail Operations. 2

Major Problems in running an Operations like IKEA.. 3

Operations Function in IKEA and the difference from Sales Purpose. 4

Conclusion. 5

Reference list 7

Introduction

Operational management plays a significant role in the corporate sectors of IKEA as well as retail operation. This management helps to utilise new strategies and thought to enhance business. Through this operational management, IKEA achieves strategies to develop its business pattern. IKEA groups enhance their business based on furniture products, kitchen appliances, and many more all over the world. IKEA groups follow some unique operations plans to present their business and those patterns help the organisation to develop their business techniques. Through this operational management, the IKEA group achieved huge success in their retail background and influenced others companies through their business strategies and brand value.

The dissimilarity between the IKEA Operations Plan and the most Furniture Retail Operations

Figure 1: Graph regarding the increasing rate of IKEA operation plan

Source: (House & Kádár, 2020)

Major Problems in running an Operations like IKEA

Operation management is one of the most difficult factors in the business or any organisation. Operation management helps an organisation to enhance its key factor to provide better services for the customers. This management system influences the effective and efficient process of the production system and also provides design and management thought to provide better services (Vico, 2021). IKEA companies also follow this management process to achieve growth in their business pattern.

IKEA is a multinational group that provides well-designed and ready to assemble furniture to the customers. IKEA mainly sells a variety of beds, tables, bookshelves, sofas, chairs, kitchen appliances, bathroom articles, and many more. This group enhances their business worldwide. Nowadays, this group of companies is facing many problems in their operation. Those problems are –

• Inventory storage- This group faces a huge problem with storage products. Expanding their business, companies need to display their products in the stores. The company needs to display its various kinds of products to attract customers. But warehouses are so costly. This company cannot afford the price of thousands of products from each store (Vico, 2021). It’s not only the cost, but this also creates a problem in the products which can be wasted. If the company cannot display all products, those will not be sold. This has an effect on the business structure.
• Customer awareness- This company does not use an e-business culture in this current situation. Nowadays all furniture companies follow social media to regularly connect with customers. Through this issue, the company does connect properly. They are not able to present their new products to the customers. This affects the company’s profit structure.
• Product value and offers- According to customer view, this company sells its products in high value according to other furniture companies (Burt et al., 2021). IKEA also does not create discount offers for the customers. Those things affect customer interest and business structure also.

Operations Function in IKEA and the difference from Sales Purpose

Operation function is a major part of the business or organisation. It provides services and products to the customers. IKEA manufactures mostly furniture, sofas, kitchen appliances, bathroom appliances, and many more (Sund et al., 2020). Operation function describes company planning process, marketing and various services. Ikea uses its operational functions to monitor its volume, variation, varsity and visibility. Operation functions provide the operation strategies and monitor their work. IKEA operates its services and it helps to understand the markets. It helps IKEA to achieve its productivity and its goals.

Figure 2: Graph regarding the purpose of the average sale

Source: (Thomsen, 2018)

IKEA’s operation functions are different from sales purposes as it also plans to design the furniture as per the choice of the customers and also keep their price low so the customers can easily buy IKEA products and get attracted to their products (Burt et al., 2021). It provides the company’s furniture at a low cost. Operation function helps IKEA to manufacture more products and make them available at the store better than other brands. It’s different from the purpose of the sale because sales purpose is something that generates more sales without making any marketing efforts. If the company increases its sales then it can gain more revenue and profit for it (Thomsen, 2018). However, the operation function always makes plans and monitors their processing and employees’ performance for IKEA. There are two different things to discuss if the IKEA company wanted to make their company more popular than they needed to maintain two differences in their company.

Conclusion

After analysing the questions it has been concluded that IKEA companies create unique products for their customers and their products also attract them. It also describes how IKEA company operation management does their work and how important it is for the company. It shows how IKEA services attract their customers and make them buy their product. It also describes that IKEA companies also face many problems in their operation services but they overcome their problem and provide better service for their customers. It provides the company’s furniture at a low cost. It provides the company’s furniture at a low cost. Following all those losses and achievements then they can improve themselves in future.

Reference list

Burt, S., Dawson, J., Johansson, U., & Hultman, J. (2021). The changing marketing orientation within the business model of an international retailer–IKEA in China over 10 years. The International Review of Retail, Distribution and Consumer Research, 31(2), 229-255. DOI: https://doi.org/10.1080/09593969.2020.1857294

House, J., & Kádár, D. Z. (2020). T/V pronouns in global communication practices: The case of IKEA catalogues across linguacultures. Journal of Pragmatics, 161, 1-15. DOI: https://doi.org/10.1016/j.pragma.2020.03.001

Sund, T., Lööf, C., Nadjm-Tehrani, S., & Asplund, M. (2020). Blockchain-based event processing in supply chains—A case study at IKEA. Robotics and Computer-Integrated Manufacturing, 65, 101971. DOI: https://doi.org/10.1016/j.rcim.2020.101971

Thomsen, S. (2018). Foundation Ownership at IKEA. Available at SSRN 3243347. Retrieved from: http://www.tifp.dk/wp-content/uploads/2011/11/Foundation-Ownership-at-IKEA.pdf

Vico, E. P. (2021). When Average Joe met the Inexperienced Superstar—a case study of the consequences for a university of a partnership with IKEA. Higher Education, 81(4), 795-813. DOI: https://doi.org/10.1007/s10734-020-00577-4