Ikea Case
`CASE 2.
IKEA: DESIGN AND PRICING
BA 240 ( )
Group10: Ancuna, Joyce. Burkley, Andrea. del Pilar, Karlo. Ranada, Maria Kristina
COMPETITIVE PRIORITIES
Offering low price products with meaning is the top competitive priority of IKEA. This signifies that their products are cost-efficient but remain to have quality, style, relevance and value both to the company and their customers. They are affordable but NOT cheap. This mantra rooted from an integrated design process, which continually seeks to reduce costs from selection of raw materials, production, distribution and logistics, up to its retail set-up.
PRODUCT DEVELOPMENT
Like any other company, whether initiated by top management, market-research, or R&D, product development starts with conceptualization. What sets IKEA apart is that it begins with the end in mind. Their product development process starts with their mantra: low-price with meaning. They do not only determine the needs and wants of their market, its feature, benefit, and attributes like a typical entrepreneur but they also integrate their designs with the cost of each product development cycle’s stage which enables them to calculate immediately its impact to the retail product cost. A multi-functional product development team is formed, composed of developers, creative designers, researchers, including suppliers and purchasers, to cover all possible products’ cost reductions. We shall use the latest chair design from IKEA’s PS Collection to illustrate the product developmental process. Like any other chair, its function remains to be for sitting. However the following features considered by the product development team gave them the edge in terms of price and relevance. Stackable Bamboo-Plastic Chair | Product Development Contributor | Features | IKEA’s Mantra: Start with the End | | | | Low-price | Meaning | | Suppliers/ Purchasing | Materials are made from bamboo plasticDifferent colors | Cheaper cost of woodCheaper
IKEA: DESIGN AND PRICING
BA 240 ( )
Group10: Ancuna, Joyce. Burkley, Andrea. del Pilar, Karlo. Ranada, Maria Kristina
COMPETITIVE PRIORITIES
Offering low price products with meaning is the top competitive priority of IKEA. This signifies that their products are cost-efficient but remain to have quality, style, relevance and value both to the company and their customers. They are affordable but NOT cheap. This mantra rooted from an integrated design process, which continually seeks to reduce costs from selection of raw materials, production, distribution and logistics, up to its retail set-up.
PRODUCT DEVELOPMENT
Like any other company, whether initiated by top management, market-research, or R&D, product development starts with conceptualization. What sets IKEA apart is that it begins with the end in mind. Their product development process starts with their mantra: low-price with meaning. They do not only determine the needs and wants of their market, its feature, benefit, and attributes like a typical entrepreneur but they also integrate their designs with the cost of each product development cycle’s stage which enables them to calculate immediately its impact to the retail product cost. A multi-functional product development team is formed, composed of developers, creative designers, researchers, including suppliers and purchasers, to cover all possible products’ cost reductions. We shall use the latest chair design from IKEA’s PS Collection to illustrate the product developmental process. Like any other chair, its function remains to be for sitting. However the following features considered by the product development team gave them the edge in terms of price and relevance. Stackable Bamboo-Plastic Chair | Product Development Contributor | Features | IKEA’s Mantra: Start with the End | | | | Low-price | Meaning | | Suppliers/ Purchasing | Materials are made from bamboo plasticDifferent colors | Cheaper cost of woodCheaper