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The Team
1. Founded in 1943, in Sweden by a
2. Iniatially offered items such as
Pen, Wallets, Picture Frames,
Jewelry, etc.
3. In 1947, furniture was added to
their product selection, followed
by personally designed pieces in
4. Retailer dominate makets in32

“ to create a better everyday life

for the many people “
Business Principal &Philosophy:
“ Low price but not any price“
Business Principal &Philosophy:
Business Principal &Philosophy:
Business Concept:

“ Provide functional, well-designed

furniture at prices to low that as many
people as possible will be able to afford
them. Creating a better everyday life for
the many people“
Business Concept:

1. Low - Cost Cutting Solution
Price Without Afecting the quality of Product
- Flat Pack Furniture concept
Introduce especially to reduce prices for
3. Function IKEA’s customers by eliminating transportation and storage costs

- Properties - Differentation from competitors

Functional need Design do not use design to justify a higher price
Innovation - Designer are instructed
Low-cost manufacturing To save in every possible ways
Wholesale deals with manufacture
Step-1 : Pick APrice:
• Silahkan diisi by essay
Step-2 : Choose aManufacturer :
Describe IKEA’S process for developing a new product.
biaya dan manajemen persediaan yang luar biasa adalah
keunggulan kompetitif IKEA yang besar. Dengan prinsip
"harga murah dengan yang bermakna" IKEA mampu
memasukkan perkiraan biaya dalam setiap proses
pengembangan produk yang modern, fungsional dan
bernilai uang yang sesungguhnya.
Select Manufacturer
• More than 1800 manufacturers inmore than 50countries
• Build long term relationships
• IKEAcirculates a description of proposed product's specifications and
target cost and encouraged them to compete forthe production package
• Sometimes it might have different product component from different
material used
• Done by IKEAengineers
• Focus on costefficiency
• Using different types of wood fora single wooden product
• Using high quality materials on furniture surfaces that werevisible
and most likely undergostress
• Using low quality material on surfaces that were low stress and less visible
to the customer
Modularity :
a production concept widely used by IKEA

• Modularity is t h e degr ee t o whi ch a s y s t e m c o m p o n e n t s

m a y be s e p a r a t e d a n d recombined"
Eg: wheel s of a t a b l e a r e t h e s a m e like t h a t of a chair
IKEA & it's Suppliers
• OBJECTIVE : g a i n l o n g - t e r m r e l a t i o n s h i p s , e n c o u r a g e s u p p l i e r s t o d e l i v e r
better quality
• IKEA AUDIT : o v e r e v e r y e x t e r n a l s u p p l i e r i n o r d e r t o m e e t t h e i r i d e a l
working conditions, a n d avoid exploitation a mo n g their workforce.
• O n c e IKEA c o m m i t s t o it's s u p p l i e r s f o r a c e r t a i n a m o u n t of u n i t s , i t h a s t o
t a k e t h e d e l i v e r y of t h o s e u n i t s - T H E R E ' S NO GOING BACK
• IKEA W a y of P u r c h a s i n g H o m e F u r n i s h i n g P r o d u c t s (IWAY), h e l p
m a n u f a c t u r e r s r e d u c e t h e i m p a c t of t h e i r a c t i v i t i e s o n t h e e n v i r o n m e n t .
IWAY r a i s e s t a n d a r d s b y d e v e l o p i n g s u s t a i n a b l e b u s i n e s s a c t i v i t i e s a n d
leaving positive impacts on t h e business en v iro n men t in which t h e
suppliers operate.
Step-3 : Design TheProduct:
1. Uses internal competition to find a Designer.
2. Design process begins by writing abrief (exp. Product price, its
function, materials to be used & fabricator’scapabilities.
3. Designer send the brief to IKEA’sstaff designers and freelancers.
Step-4 Ship it:
Supply Chain - Structure:
Wise products • Effective use of Resources

“ Democratic •
Commitment to furnituredesigns
Suistanable Products
Design” • DIYAssembly

• Suppliers
Relationship / • Manufacturers

Partnership •

• Products
Suistainability • Philantropic activities
Supply Chain - Structure:

• Retail/Warehouse 2-in- • Website • Minimum/Maximum

1 Accessibility • Application (App) Settings
• Lowered Cost for cost • Social Media • Monitor
per touch model • Record
• Check Deliveries
• Pick-up & Order points

Customer Driven Expanded online IKEAin houe

(Cost-Per-Touch) reach Logistic
Supply Chain – Role of SCM:
Supply Chain – Successes:
Step-5 SELLIT:
• Silahkan diisi by essay
Social Responsibility:
1. What are IKEA’scompetitive Priorities ?
Low price with meaning, the goal is to make things less expensive
without ever making customers feel cheap :
- Start Designing with lower price in mind
- Flat pack the products
- Fit all products information into one price tag
- Encourage self delivery
- Encourage self assembly
- Make products people like
2. Describe IKEA’sprocess for developing a new product?
IKEA’sprocess of developing a new product, as put in the case study, begins
with a rough sketch along with a determination of the approximate price for
the item. Ateam comprised of designers, product developers, and purchaser
later establishes the best approaches to develop the item, each providing
input from their respective area of expertise. Amanufacturer is than chosen
using many factors relative to product and the way in which they conduct
business. IKEA,as previously mentioned, is thoroughly involved in the entire
process. With the price and the manufacturer at hand, an internal
competitive process is used to obtain the best design, which should possess
the best possible uses, the most cost effective materials, and good quality in
3. What are additional features of the IKEAconcept (beyond its design
process) that contribute to creating exceptional value for the customer?
That contribute to creating exceptional value for the customer? The way IKEA
ships their products is the number one way they are able to keep their prices
so low. By requesting customers to assemble the products themselves, they
are able to ship their items flat, therefore increasing the number of items
they ship.
By filling the containers as much as possible (they are at a 65% average fill
rate) and by building their distribution centers near ports, railways, and
highways IKEAhas been able to ship with great efficiency. Since they are able
to ship the maximum amount of products at the right time to the right
stores, they have been able to keep their prices 30 to 50% lower than their
4. What would be important criteria for selecting a site for an IKEA
Some important criteria for selecting an IKEAstore site would be the
location to a large city with not only multiple shipping options like air,
rail, and sea, but also with higher income. The site would also have to
be large enough to house their theme park-type furniture outlet.

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tolong bantu download video terebut)