Operations and Supply Chain Management Week 2

Topics: Cost, Manufacturing, Marketing Pages: 1 (259 words) Published: June 23, 2013
1) Ikea’s core competitive priority is price. They develop and sell products that are affordable to the customer. In order to sell the product at a low price they focus on cost from start to finish. They are continuously working on reducing costs while maintaining quality. 2) When developing a new product a team of developers, designers and purchasers collaborate to determine the product and how much the customer will have to pay. They keep cost in mind and determine what materials suppliers are needed and choose a manufacturer. Then a designer drafts up the details of the product considering the price, functionality, and design. They tune in on what the consumers are demanding and design a product to meet their desires. 3) Ikea is able to offer products at a low price by having customers purchase in store and assemble their own furniture at home instead of having to ship and assemble the furniture themselves which would cost additional overhead. The environment of the store is appealing. Ikea uses a make-to-stock process. The products are available immediately to the customer. 4) The cast of transportation of the products to site (location of distribution center). Selecting a site with a large population like a big city that can fit the demand required by a massive store like Ikea. It simply would not work in a small town! College towns should be a focus because the furniture is popular among the younger crowds. This is because it is decent quality at low price and usually trendy. Chapter 4
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