Ikea Case Study Essay

1208 Words Sep 15th, 2014 5 Pages
From product design to the customer’s home, IKEA’s products follow a unique and calculated product development process. By creating this process IKEA is one of the fiercest low-cost furniture competitors in the market today. IKEA’s process for developing a new product contains the following steps: pick a price, choose a manufacturer, design the product, ship it, and sell it. By understanding each of these steps, IKEA’s competitive priorities and exceptional value to its customers, as well as, store placement comes to light.
Step One: Pick a Price
IKEA’s relentless focus on quality and low prices begins from the very start of developing a product. IKEA assigns a price to a product from the very beginning of the product’s development.
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These changes also increased production efficiency by making more space in kiln leading to a decrease in the overall production cost. The increased efficiencies associated during this phase help create more value for the customer overall as well. While the increased shipping and production efficiency helped maintain the low cost of the product, the design change also helped increase the storage capacity of the mug in a person’s kitchen.
IKEA also enforces a strong code of conduct with its manufacturers in order to create a healthy and safe workplace. By enforcing a strong code of conduct, IKEA is able to appeal to the emotional values of many of its customers. Many people decide to shop and spend money with IKEA based on their own personal moral code.
IKEA’s concern for the environment is another one of its IKEA’s competitive priorities seen in the manufacturing phase. By striving to keep the price of the mug lower, IKEA limited the colors available to colors with less pigment such as green, blue, yellow, and white. Colors with less pigment are overall better for the environment allowing IKEA to pass on, not just the lower price, but the environmental concern to its customers.
Step 3: Design the Product
After the manufacturer and price point of the product are finalized, IKEA begins the design of the product. An internal designer begins this process by writing a brief that explains the product’s price, function, materials, and fabricator’s capabilities. After the

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