1. Assignment 1
Please answer (maximum 2 pages, EXCLUDING REFERENCE) the following two questions with
regards to the following IKEA Mini-Case
1. How is the IKEA operations design different from that of most furniture retail operations?
2. What do you think might be the major problems in running an operation like IKEA?
With over 300 stores operating throughout the world, IKEA has managed to develop its own special
way of selling furniture. Customers often spend around two hours in the store – far longer than in
rival furniture retailers. This is because of the way it organizes its store operations. IKEA´s philosophy
goes back to the original business, started in the 1950s in southern Sweden by Ingvar Kamprad who
was successfully selling furniture, through a catalogue operation. Because customers wanted to see
some of his furniture, he built a showroom in Stockholm, Sweden. Not in the centre of the city
where land was expensive, but on the outskirts of town. Instead of buying expensive display stands,
he simply set the furniture out as it would be in a domestic setting. Also, instead of moving the
furniture from the warehouse to the showroom area, he asked his customers to pick the furniture
up themselves from the warehouse, an approach that is still the basis of IKEA´s process today.
IKEA offers ‘value for money’ furniture with a wide range of choice, usually designed to be stored
and sold as a ‘flat pack’ which the customer assembles at home. The stores are all designed around
the same self-service concept – that finding the store, parking, moving through the store itself, and
ordering and picking up goods should be simple, smooth and problem-free. At the entrance to each
store are large notice boards which proclaim IKEA´s philosophy and provide advice to shoppers who
have not used the store before. Catalogues are available at this point showing product details and
illustrations. For young children, there is a supervised children’s play area, a small cinema, a parent
and baby room and toilets, so parents can leave their children in the supervised play area for a time.
Each child is attired in a yellow numbered top while in this area and parents are recalled via the
loudspeaker system if the child has any needs. Customer may borrow pushchairs to keep their
children with them.
Parts of the showroom are set out in ‘room settings’, while other parts show similar products
together, so that customers can make comparisons. IKEA likes to allow customers to make up their
minds in their own time. If advice is needed, ‘information points’ have staff who can help. Every
piece of furniture carries a ticket with a code number which indicates the location in the warehouse
from where it can be collected. (For larger items customers go to the information desk for
assistance.) After the showroom, customers pass through the self-service warehouse where they can
pick up the items they viewed in the showroom. Finally, the customers pay at the checkouts, where
a ramped conveyor belt moves purchases up to the checkout staff. The exit area has service points,
and often a ‘Swedish Shop’ with Swedish foodstuffs. A large loading area allows customers to bring
their cars from the car park and load their purchases. Customers may also rent or buy a roof rack.
Proper Harvard format used in alphabetical order with all sources shown and a variety range of
Grasp the essence of IKEA’s OM and fully understand its differences in comparison to other furniture
companies. In addition to this, excellent writing skills and a well-founded list of relevant references.