Ikea questions 3&4 - Essay Example

IKEA QUESTIONS 3 & 4 Additional features of IKEA concept that that contribute to to creating exceptional value for the One of the characteristic features of IKEA that allows it to develop value for its customers is its competitiveness with respect to price. The company’s products are considerably cheaper than those of its competitors in the market are. Being able to offer as low as thirty or even fifty percent bellow prices offered by competitors is a strong ground for creating value to consumers.

This is because the consumers are able to save a significant amount of money hence an economic value. Another feature in IKEA that helps it to add value to its customers is its capacity to offer quality products. With emerging market trends in which competition is high, customer utility is a necessity and finding the utility in quality of products helps in developing the value for customers. High levels of quality particularly generate satisfaction in customers’ expenditure in the bought products while poor quality leads to dissatisfaction among customers.

Further, IKEA has been able to combine its high quality in its productions with low prices, an initiative that has enabled its customers to retain high social status despite using cheap products. The underlying principle is that while cheap commodities are related to low quality and hence associated with low social classes that cannot afford quality products, IKEA manages to deliver affordable quality. As a result, the customers derives utility of a higher social class than what they could have at higher prices from IKEA’s competitors.

1 Similarly, innovation that leads to generation of a variety of products and lower production cost has enhanced the company’s development of value for customer. This is because it offers its customers a variety of product mix for complementary application. Innovation into producing a wide range of products also offers the customers benefits of the freedom and power of choice.2 Innovation has also enabled the company to improve on its ‘price-based’ value to customers by making sure that its products have decreasing price trends.

34 Important criteria for selecting site of IKEA store Operations at IKEA that includes sourcing for supplies and transportation of products from the organization requires a strategic location for its stores. The location should be able to facilitate smooth flow of commodities in and out of the enterprise. Important criteria for selecting a location for the organization’s store should therefore outline an approach towards comparing alternative locations, selection of the best approach to evaluating the alternatives, identification of possible locations, and a final evaluation of the identified locations by considering all applicable factors.

The selection criteria should consider factors such as cost, availability, and quality of human resource, availability of land and infrastructure as well as accessibility to customers and suppliers. A comprehensive review of these factors through the above criteria will lead to a strategically located store.5 Bibliography Ashrafzadeh, M. et al. ‘Application of fuzzy topsis method for selection of warehouse location: a case study’ Interdisciplinary Journal of contemporary research in business.

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