De Shola Spencer
Case IKEA: Design & Pricing
9-7-2014

Ikea has reached a new level with its pricing and product development; their primary goal is to maximize on profits and cut cost on expenses by providing good quality products at a lower cost. They also focus on making their products less expensive without making the customer feel like they are buying cheap products. (Jacobs & Chase, pg. 69) Ikea’s competitive priorities also include having unique items that are well designed and modern. Items that can compete with other companies that have the same type of inventory. The vision of Ikea is to create a better everyday life for many people and offer a wide range of well-designed functional home furnishings for many people that will be able to afford them. (About IKEA. (n.d.). Retrieved September 7, 2014.) The first step in product development is the actual idea and of course a sketch that illustrates how the product will look. This process also gives the company an idea of how much it will cost to manufacturer the product. In order to maximize on all options for the product everyone has to be on board and give their data and this includes designers, product developers and purchasers. Some of the things that are discussed in product development are color and material. (Jacobs & Chase, pg. 69) Ikea wants to be able to save the customers as much as possible and they do so by working with suppliers and purchasers to maximize space in packaging and shipping, trying to minimize as much cost as possible. They focus on making packages flat one way is by vacuum sealing pillows. Other ways of maximizing space is designing items that are able to be flattened and also by shipping items disassembled. Ikea currently has 28 distribution centers and 11 customer distribution centers in 16 countries. They also utilize fuel saving techniques by transporting goods by rail and sea which allows the company to be more cost effective and environmentally friendly. (About IKEA. (n.d.). Retrieved September 7, 2014) Personally I love Ikea and at one point my entire apartment was full of Ikea products from inexpensive dishes and silverware, to my bedroom set. I loved how modern the furniture was. I enjoyed walking around the humungous store and seeing all of the great ideas that Ikea offered. I even had time for a quick bit to eat with the comfort of leaving my shopping cart close by. I lived in a small apartment so the idea was to maximize as much space as possible and make my living space comfortable. I was able to do this with all of the neat ideas Ikea offered. I had gone to other furniture stores in each of a bedroom set and living room set and was not able to find a more reasonable price that what I’d found at Ikea and though I had to rent my own truck and assemble the items myself. The savings was well worth it and I was very pleased with the way my apartment looked. It was modern and it didn’t look cheap.
If I were in search of an Ikea site it would be best to look for a space over 300000 square feet. (List of countries with IKEA stores. (2014, January 9). Retrieved September 7, 2014.) This location would have to be wide enough to have a food court as well as storage space for all of the goods Ikea sells. Currently Ikea has over 9,500 home furnishing articles ((About IKEA. (n.d.). Retrieved September 7, 2014) The space would also have to accommodate the many models that are on display to give customers ideas on what they can do with their new item. I noticed that Ikea stores are mainly located close to the highway and other malls. It stands out with its big Blue building.