IKEA: DESIGN AND PRICING

Case Study
 IKEA’s competitive priorities
1. Good quality items at affordable prices are at the top of IKEA's competitive priority list.
There's a strong emphasis on cost-cutting and cost-pass-through for their customers in
their tagline, "low price with meaning." IKEA is one of the rare companies that has been
able to keep its product pricing stable or even decrease over time. Because of their unique
design, production, packaging, and distribution processes, they're able to keep their
pricing low. IKEA's methods for offering products at a discount of 30 to 50% off the
competition's prices. IKEA also has a competitive edge in that they work closely with
their suppliers throughout the entire process. As a result, their suppliers are more likely to
employ ethical labor practices and environmentally sound techniques. The designs are
aimed at a market of people who wish to advertise that they are up to date while also
being frugal with their money.
IKEA’s process for developing a new product
2. According to the case study, to create a new IKEA product, the company goes through
the following steps: decide on pricing, find a manufacturer, design the item, and then sell
it. IKEA's competitive priorities and outstanding value for its customers, as well as shop
positioning, can be understood by comprehending each phase. IKEA's product
development process begins with a preliminary design and an estimate of the item's
anticipated cost. It is decided on the ideal techniques to produce the item by a team of
designers, product developers, and purchasers, each of whom contributes from their areas
of expertise. After that, a manufacturer is selected based on a wide range of criteria,
including the product and the company's business practices. To reiterate, IKEA is deeply
involved in every step of the process. If you know how much something will cost and
who will be making it, you can use a competitive internal process to come up with a
design that is optimal in terms of functionality, cost-effectiveness, and quality. Ultimately
to make the product as space efficient as possible, IKEA packages and distributes it
through a network of strategically located stores and distribution hubs.
Additional features of the IKEA concept (beyond its design process) that contribute
to creating exceptional value for the customer
3. In their stores, IKEA takes great pride in giving and letting customers live the whole
product experience. Similarly, the innovation that results in the creation of a wide range
 of products and lower manufacturing costs has improved the development of value for
customers by the company. This is since it provides a wide range of complementary
product mixes to its clients. The independence and power of choice are two more
advantages of innovation in the production of a wide range of items. They don't want to
focus on selling a single item. You can spend a lot of time in their stores because they are
designed to be interactive. They display 'chic' or ‘modern' areas of the store to
demonstrate to customers how they can use IKEA furniture and its excellent utility or
efficient use of space. As well as functional and multipurpose products, IKEA strives to
give their customers a wide range of choices. Customers don't mind buying IKEA's
products in a box and putting them together themselves because they're so inexpensive.
Because of this, moving furniture to a client's house does not need locating a large truck.
In addition, IKEA offers step-by-by-step building instructions as well as most of the tools
required to complete the project. It's easier to resell and buy new materials for rebuilding
because these items are so reasonably priced. Finally, IKEA relies on knowledgeable
personnel rather than "pesky" salespeople to accost customers. Because they want to
serve EVERY customer, they print their catalogs in 34 different languages, making it
easier for customers to communicate.
Important criteria for selecting a site for an IKEA store
4. IKEA should concentrate on rapidly growing and already heavily populated places where
there is a strong development rate. The location must allow for easy movement of goods
into and out of the company. Young to middle-aged families are more likely to make an
IKEA purchase. One of the criteria of IKEA stores in selecting a location is that it should
be large enough to have room for their products and showrooms. The company should
also make an effort to locate its stores at busy junctions and major highways so that they
are easy to spot by passing motorists. There should be considerations for issues such as
cost, availability, and quality of human resources while making a decision and for land,
infrastructure, as well. Lastly, a concentration on a location that is as close to a
distribution center as possible, but not as close as their rivals.