Location and Layout of IKEA - Assignment Example

Elements pertaining to prospective customers become crucial considerations in creating the internal environment of retail stores and outlets that embodies its marketing philosophy, and finding the site that best supports its marketing strategy. Ikea is an internationally renowned furniture company with a global presence and strong market following. Its key strategy is to provide quality at affordable cost; its vision is to enable everybody, regardless of economic wealth or status, to be able to acquire beautifully designed and well manufactured furniture at reasonable prices.

In order to realize this vision, costs must be kept down and distribution made more efficient, which are the most important objectives in the location and layout of Ikea stores. . 1.0 Introduction The management decision about where to locate the firm’s productive facilities is always a critical strategic consideration for the firm, because it involves a long term investment, and it impacts on cost efficiency and therefore profitability. Layout is likewise of critical concern because the manner in which facilities are appointed either support or constrain smooth operations.

While these aspects of a business are important in all types of operations such as manufacturing, it is in in the retail distribution function (whether in goods or services) that both layout and location play a crucial role, because of the interface it creates between the firm’s productive activities and its intended market. Ikea is a retail company whose stores’ location and layout designs are governed by the company philosophy; as a consequence, these aspects of the business have assumed unique characteristics that have provided the firm both advantages and disadvantages. 2.0 Literature Review Layout concerns “the optimum arrangement of facilities including personnel, operating equipment, storage space, material handling equipment, and all other supporting services along with the design of the best structure to contain all these facilities” (Moore, 1962 as cited in Kumar & Suresh, 2006, p. 14). Traditionally, the basic types of layout are fixed position, process, cell, and product layout schemes (Slack, et al., 2010). There are numerous combinations of these basic types, and in detailing one particular design in a retail centre, important considerations are market strategy and flow of people and materials.

Location of facilities is “a long term capacity decision which involves a long-term commitment about the geographically static factors that affect a