IKEA

Will we Still Love IKEA?



Will we Still Love IKEA?

Introduction

IKEA is a multinational company that provides consumers with domestic furniture and practical products for residential usage. The company has managed to garner significant popularity in the last few years on account of the maverick approach that it has adopted towards business conduction and operations management. The business has managed to make use of a business conduction approach. In which, it has made it possible for consumers to purchase reasonably priced products for domestic usage. IKEA was formed in 1940s and currently a subsidiary of the INGKA foundation from the Netherlands. The front end structure of the company is that which relates to the regular retail business. IKEA's product line comprises products from two sources (Johnson & Scholes 2011,p. 630). The first source is through third parties: IKEA purchases products from third parties and retails them under its umbrella.

The operational activities can be related to the theoretical concepts studied during the lecture. The fact that the organization's operational activities are aligned with an aim to reduce costs and increase productivity. One of the most important challenges that IKEA faces in the implementation of effective operations management is that which comes from the continuous development of the most common of household products. This creates a need to develop, implement and evaluate engineering developments at an increasing speed. The company is a well known multinational and this creates a scenario in which the company has to engage in a program for the integration of continuous development and improvement of processes. The company's sheer size and magnitude of operation places it in a position where it is vulnerable to a variety of external pressures. As a result, it is essential for the company to ensure extensive transparency and structure in its operations. Inefficiency in these areas can make the organization vulnerable to legal and operational challenges.

Task 01: IKEA Strategy That Make It a Hybrid Strategy

The front end structure of the company is that which relates to the regular retail business. IKEA's product line comprises products from two sources. The first source is through third parties: IKEA purchases products from third parties and retails them under its umbrella. These products are those, that are designer, products or those that designs for specialized purposes. IKEA's organizational structure falls under the direct control of the INGKA holdings group, which is then further divided into two categories: group support functions and expert functions. These refers to as inter IKEA systems (Xiaofei 2005,p. 57). The five areas of functioning that fall under these two categories are range, industry, purchasing, distribution & wholesale and retail.

The following discussion will begin by presenting a succinct description of IKEA, followed by a more detailed explanation of what IKEA does, and how these operational activities relate with the theoretical concepts covered in the lecture series. This will be followed by a critical examination of issues and challenges confronted by IKEA as well as a highlighting of the role engineers plays in meeting the operational requirements ...