IKEA Stores Layout and Sizes - Assignment Example

It was impressed upon his young mind that the most should be made out of the limited resources and that the essentials of modern living may be acquired at reasonable cost. From the time he set up his first business in the 1930s and registered as IKEA in 1943, Kamprad’s overriding strtegy was to adopt every cost-cutting solution that did not compromise quality and innovative ideas (Ikea.com, 2012). The diagram that follows shows IKEA’s key strategic thrusts by which it seeks to flesh out Kamprad’s vision.

Central to the strategy is the simple and creative design which is well-received by the market; it is distributed through large stores with a wide range of products, all priced inexpensively, designed in flat packs, and requiring customer assembly. IKEA’s Strategic Direction (http://sites.google.com/site/faizahmadali/IKEA.JPG) The manner by which the stores provide customer accessibility to a wide selection of useful products, and the manner by which the products are inexpensively priced, easily stored and transported through flat packed boxes, and engage end-user participation in their assembly all contribute to customer engagement through low cost, durable quality, and aesthetic appeal. 2. Three organizational tensions, and how the strategic direction addresses them.

The diagram on the next page shows a strategic map of the company, identifying in blue the central goal of providing furniture and accessories for the home, the four principal strategic objectives arranged in a square around the goal, and the elements that support the goal and objectives. http://www.monografias.com/trabajos89/strategy-michael-porter/image011.jpg The elements that contribute to the realization of the objectives or goals provide clues to various organizational tensions between the firm and its stakeholders, due to factors both internal and external to the organisation.

By tension is meant the existence of clashing interests between stakeholders and the company. For IKEA, some customers have taken issue with (and even ridiculed) the manner by which IKEA products presume the customers’ adequate capability in assembling the product. This creates tension in the need to design easy-to-assemble units vis-a-vis the need to engage customer participation in the assembly process. Internal IKEA store layout featuring products’ flatpack design (Facenda, 1999) A second source of tension is the need to create a variety of designs, which clashes with the need to reduce manufacturing costs.

Ordinarily, cost reduction is best achieved through product standardization, rather than product diversification needed to produce a variety of products . By seeking to diversify but at the same time mass-produce, tensions are created between the production unit of the firm and the marketing unit which identifies the variety of product lines offered in IKEA stores. Finally, a third source of tension is in the size of IKEA stores and its repercussions upon the community. The size of IKEA stores are as a rule large enough to enable customers to access all possible