3 case of ikea(全英宜家案例)

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2020年08月18日 03:28
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CASE: IKEA
The Swedish retailer dominates markets in 32 countries, and now it’s poised to conquer North
America. It’s battle plan: Keeping making its offering less expensive, without making them cheap.
Above all else, one factor accounts for IKEA’ success: good quality at a low price . IKEA sells
household items that are cheap but not cheapo, at price that typically run 30 to 50 percent below
the competitions. While the price of other competitions’ products tends to rise over time, IKEA
says it has reduced its retail prices by a total of about 20 percent during the past four years . At
IKEA the process of driving down costs starts the moment a new item is conceived and continues
relentlessly throughout its production run. The price of a basic Poang chair,for example,has fallen
from $$149 in 2000 to $$99 in 2001 to 79 today. IKEA expects the most recent price cut to
increase Poang sales by 30 to 50 percent.
IKEA’s corporate mantra is “Low price with meaning .”The goal is to make things less
expensive without ever making customer feel cheap Striking that balance demands a special kind
of design, manufacturing, and distribution expertise. But IKEA pulls it off in its distinctive way:
tastefully, methodically, even cheerfully, and yet somehow diffidently than any other company
anywhere. Here ‘s a step-by- step guide to how IKEA designs, builds, and distributes the items that
the entire world wants to buy.
The Trofe mug is one of the most popular IKEA products. The story of mug is an example
of how IKEA works ,from a coworker’s bright idea through to production and sales. It is also a
story about all the demands that we and our customers place on IKEA. A low price tag is the
obvious one, but other requirements include function, modern design, environmental
considerations, and making sure products have manufactured acceptable working conditions.
Both customer and coworkers must be able to rely on IKEA.

A PRICE
PRODUCT DEVELOPMENT—A sketch for a new product? Yes, but it’s also a calculation of what
that product will cost. The low price begins at the drawing board.
The team behind each product consists of designers, product developer, and purchaser
who get together to discuss design , materials, and suitable suppliers. Everyone contributes with
their specialist knowledge. Purchaser, for example, use their contacts with supplier all over the
world via IKEA Trading Service Office. Who can make this at the best quality for the right price at
the right time?
When product developer Pia Eldin Lindsten was also told how much it should cost in the
stores. In the case of Trofe, the price had to be incredibly low—five Swedish kronor! This mug had
to have a real knock- out price.
To produce the right mug at the right price, Pia and he colleagues had to make into
account materials, colors, and design. For example, the mug is made in green, blue, yellow, or
white as these pigments cost less than other shades, such as red.

Step 2,CHOOSE A MANUFACTURER
Suppliers and Purchasing –The task of developing products never ends. Working with suppliers,
the mug was shortened and the handle changed so it stacks more efficiently, saving space for
transport, warehousing, and store display-and, not least, in the customers’ cupboards at home..


IKEA is always keen to banish as much air as possible from its packaging. Packages should
preferably be flat for efficient transport and storage.
One supplier, a factory in Romania, has worked with IKEA for 15years. Long-term relationships
help both parties to build up a huge fund of knowledge about demands and expectations. That is
why products are often developed in close cooperation with suppliers. In the case of Trofe, for
example, the new size has rationalized production by making better use of the space in the kiln
during the firing process. That’s cost-effective and saves time.
IKEA has introduced a code of conduct governing working conditions and environmental
awareness among supplier. This deals with matters such as health and safety in the workplace
and forbids the use of child labor. The practical work of implementing this code of conduct is
carried out by coworkers in IKEA Trading Service Offices worldwide. Many suppliers already meet
the demands; others are working together with IKEA also works closely with external quality
control and audit companies who check that IKEA and its suppliers live up to the requirements of
the code of conduct.
The low price tag is crucial to the vision IKEA has of creating a better everyday life for many
people. That is why IKEA works nonstop to reduce costs. But it’s also a question of saving raw
materials and, ultimately, the environment. The low-cost mug is one example of how
environmental considerations can influence the development of products. For example, the new
mug is lighter in color-a move that cuts costs and is more environmentally friendly. The less
pigment that is used, the better. The mug is also lead and cadmium free.

STEP 3. DESIGN THE PRODUCT
With a price point and a manufacturer in place, IKEA once again uses internal competition to find
a designer and select a design for production. The designer begins the design process by writing a
brief that explains the product’s price, its function, the materials to be used, and the fabricator’s
capabilities. The designer then sends the brief to IKEA’s staff designers and freelancers, and
refines promising designs until settling on the one to produce. The designer wants products to be
like Swiss Army knives—to get maximum functionality at minimum cost.

Step 4. Ship IT
Distribution and logistics are the lifebiood of IKEA and important pieces of the puzzle on
their road to a low strives to deliver the right number of goods to the right stores at
the right calculate the goods requirement and make sure that delieveries are efficient.
Each pallet holds 2,024 mugs,which are transported from Romania by rail,road,and sea to
IKEA distribution centers around the otationdoes,of course,have an effect on the
environment,but IEKA is working toward reducing environmental impact.
Many of IEKA’s products are bulky,for example,tables and pioneered the
concept of company’s eureka moment occurred in 1956,when one of IKEA’s first
designers watched a customer trying to fit a table into his was only one way to do
it:Remove the that day forward ,most IKEA products have been designed to ship
disassembled,flat enough to be slipped into the cargo hatch of a station wagon or safely tied
down on an auto’s roof rack.
In IKEA’s innately frugal corporate culture ,where waste has been declared a “deadly
sin”,the flat package is also an excellent way to lower shipping costs by maximizing the use of


space inside shipping company estinates transport volume would be six times
greater if its items were shipped the designed studio to the warehouse
floor,IKEA employees’ mantra is always the same: “we don’t want to pay to ship air.”
Making things flat is an IKEA many times can you redesign a simple
fired-clay coffee mug?IKEA’s mug was redesigned three times—simplely to maximize the number
of them that can be stored on a ally,only 864 mugs would fit.A redesign added a rim
such as you’d find a flowerpot,so that each pallet could hold 1,280 mugs .Yet another redesign
created a shorter mug with a new handle,allowing 2,024 to squeeze onto a the
mug’s sales price has remained at 50 cents,shipping costs have been reduced by 60
percent,which is a significant savings,given that IKEA sells about 25million of the mugs each
better ,the cost of production at IKEA’s Romanian factory also has fallen because the
more compact mugs require less space in the kiln.

As IKEA has shifted more of its buying from Europe to the Far Eest, shipping time and
costs have become an even more critical concern . Last year China tied Sweden atop IKEA’s list
of supplier countries. The company has responded by creating a global network of distribution
centers, most of which are 18 IKEA distribution centers worldwide—which handle about 70
percent of IKEA’s total product line—and 4 more are under construction. The other 30 percent of
IKEA’s products travel directly from supplier to store.

Step 5. Sell It
IKEA sells a lot of expensive furniture, and in a traditional store this is relatively easy: Put a piece
in a lush setting, let the customer fall prey to visions of wealth and comfort, then offer plenty of
easy credit. But to keep prices low, IKEA needs to sell furniture and other products such as the
mug without salespeople or conspicuous price reductions. The company asks customers
assemble their furniture themselves. And IKEA doesn’t want to ship it to you either. By any
conventional measure, these are formidable hurdles to overcome. Yet they also explain why IKEA
has worked so hard to create a separate world inside its stores—a kind of theme park
masquerading as a furniture outlet—where normal rules and expectations don’t apply.
The Trofé mugs arrive at IKEA stores packed on pallets. Any transportation packaging is
collects for recycling. Price tags have already been placed on the mugs at the supplies. In-store
display is important. It’s not just a question of displaying mugs and other products. It’s also about
providing inspiration for smart interior solutions. Customers contribute to the low prices at IKEA
by selecting and collecting the products from the self-serve area, taking them home, and using
the instructions enclosed to assemble them. Many will have already chosen the products from
the IKEA catalogue. Of which 110 million copies are printed in 34 different language versions.
When you walk through the door of an IKEA store, you enter a meticulously constructed
virtual Sweden. The first thing you encounter is a company-sponsored child-care facility. Hungry?
Have some of those Swedish meatballs and lingonberries. The layout of an IKEA store guides
shoppers in a predetermined path past several realistic model homes, which convey an eerily
live-in impression but are open for customers to sit in.. Information kiosks provide advice on
home decor. Color-coordinated cards offer plenty of suggestions on offbeat uses for products.
But the emphasis is always on price. Low-priced products that IKEA calls BTIs
(“breathtaking items”) are often perched on risers, framed by a huge yellow price tag. Nearby,
shoppers will find other products-pricier, more design-oriented——as substitutes for the BTI.


The model homes suggest cheerful young people throwing dinner parties in hallways, using
mismatched office chairs and narrow side tables. These aren’t the aspirational images you’ll find
at Pottery Barn or Crate & Barrel. These are people who are living well in modest circumstances
—frugal folks who know the value of a comfortable place to sit.
IKEA says its biggest selling point is the price tag, but it can’t hurt that getting through one of
IKEA’s huge stores takes a lot of time. The layout is blatantly manipulative—though in friendly,
knowing way, not unlike at Disneyland—but when customers finally arrive at the checkout
counter, they’ve had plenty of time to fully consider their purchases.
IKEA products broadcast an ethos for living in the modern world: Don’t buy an ugly pitcher if
you can get a stylish one for the same price. If you organize your plastic bags, you’ll feel more
control of your life. It’s left-brain logic applied to the right-brain art of living well. And if happiness
involves dragging a cumber-some flat package off the shelf, standing in line at checkout, hauling
the box home, and spending hours assembling a kitchen cabinet, well, 260 million customers a
year are willing to make that trade-off.
And, of course, next year it will be even cheaper.

QUESTIONS
1. What are IKEA’s competitive priorities?



2. Describe IKEA’s process for developing a new product.(Design)



3. What are additional features of the IKEA concept (beyond their design process) that
contribute to creating exceptional value(意外的价值) for the customer?



4. What would be important criteria for selecting a site for an IKEA store?


Background
 SWOT

1. Design
1.1 Product design development
 4 typical phases
1.2 Designing for the Customer
 QFD: house of quality
 VAVE
1.3 Design for Manufacture & Assemble (DFMA)


2. Price
2.1 How to price?
 6 steps
 Pricing methods
 Marketing mix

2.2
2.3







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