BUSI22640：Managing the Global Supply Chain
Tutor’s Name：Pallavi Singh
Work counts：2750 words
For more than decade, IKEA is gaining attention from public, starting point is how IKEA getting remarkable success, how product can be delivered on time and throughout various development stages, it starts with sourcing for IKEA from Swedish forest Swedwood, it is describe as “Birthplace of IKEA” towards delivery to customers through transportation system to arrive at stores and then placing it on shelves：Often important for multinational firm that can signify key turning points towards success, creating customer value and competitive advantage. However, preliminary conditions to determine key success for IKEA is that this report must examine interaction between supply chain and other management functions such as operations, marketing, and finance. Eventually, conducting an investigation against how IKEA is providing roles for others to follow aimed to achieve performance management.
Being a successful multinational firm, IKEA’s product range comprising over 9,500 home furnishing articles, IKEA is significant relies on logistic network based on distribution centre, trading agents, retail stores, purchase offices and headquarters (Baraldi,2010).
1. This report need to specific nature of product, and strategies is conducted by IKEA aimed to create customer value. Indeed, strategies can be studied at few segments： market differentiation, product differentiation and cost leadership are important not only for IKEA’s product, but also for creating competitive advantages ahead of its competitors. For instance, when IKEA is promoting their product between Asia and Europe, considering the basis of the nature of particular market, for example, IKEA’s product in Europe be known as high quality, low price, functional product, however, IKEA’s product in Asia identified as middle-income product, providing modifications and fitting with local apartment size, IKEA is also aware of potential difference deriving from sourcing strategies (Chu,Girdhar & Sood, 2013). The IKEA in Europe is significantly relies on global sourcing, but in Asia is dependent on local sourcing so it is the reason why this factor is influencing IKEA (Chu,Girdhar & Sood, 2013).
Figure 1：Different strategies and approaches between distinct geographical areas (Chu,Girdhar & Sood, 2013).
Also investigating details of such how strategies in response to its consequence, IKEA is looking into customer needs and classified as three key segments - form of product, providing efficient function by affordable price regarding customer needs, it is also concern with ensuring efficient product identification where customers come in contact with IKEA and its product, IKEA conceived appropriate selection criteria matched to product and classify as functional product (Showing as Figure 4 – Market and product orientation) – (KPIs) IKEA’s criteria is relative to product quality (product frequently be designed by IKEA’s product designer based on effective design and practical knowledge) , flexibility (Highlights as they are willing to be market winner based on cost leadership through supply chain process) (IKEA Case Studies). It is creating customer value towards IKEA attributes to cost...
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