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. Cost minimization and cost efficiency have been the overriding concerns in location and layout for Ikea, leading to its supersized stores and warehouses located in the city outskirts, and a layout that leads customers through all its store merchandise. In the course of its growth and development, Ikea has come to acknowledge that other considerations such as proximity to the city’s centre, smaller store sizes, and customer convenience and mobility are becoming imperatives in determining location and layout.

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