The mission of IKEA is to create a better everyday life for most people. It offers a wide range of functional home products at low prices (Ikea.com, 2018).
The vision statement of IKEA is to ensure that well-designed and functional home furnishing products are provided to the people at a low cost. Focus is made on improving the quality of the products along so that it matches its prices (Ikea.com, 2018).
The strategic goal of IKEA is to ensure that it provides a constant and simple quality of products to its customers. The goal of the company is to maintain its status as the best furniture selling company in the world (Ikea.com, 2018).
The goal of IKEA is to sell quality furniture to its target customers. The duty of the procurement department is to manage the resources necessary for the classification of the products and at the same time conduct a proper supply in the competitive business environment. The ready to assemble furniture can be used for the decoration of houses by maintaining eco-friendly simplicity.
The main supplier of the company is Intertek that performs its services in China and the neighbouring Asian countries. The supplier firm helps in providing the best quality of raw materials as well as resources to the company. According to Myerson (2015), due to the international reputation of IKEA, the geographical dispersion of the company is spread across various countries.
Analysis of reports has provided evidence that IKEA recently has suffered huge loss in the market share (Ikea.com, 2018). In the current scenario, IKEA’s market has lost its grip of the furniture manufacturing industry. Reports have claimed that certain furniture lacked the pocket friendly prices and the raw materials used are of poor quality (Ikea.com, 2018). Hence, it can be said that IKEA can benefit from sourcing services to maintain a proper cost structure and improve its reputation in the business market.
The suppliers of IKEA are selected based on the cost of the items marked for selling the products. The focus of the company is to ensure that the suppliers are reputed and the raw materials used provide the best quality. This provides an advantage as the final products of the company help in keeping the reputation of IKEA intact. Therefore, a proper analysis of the competitors is made by IKEA for the development practices and the programs adopted to identify the bargaining power of the suppliers.
Hence, after the analysis it can be said that the challenges faced by IKEA may include maintaining the cost of the products, maintaining the quality of its products and the manner in which needs of the customers can be met. However, a proper supply chain management system may help IKEA to gain a competitive advantage in the industry.
The international reputation of IKEA helps it to sell its products in a vast market. As stated by Monczka, Handfield, Giunipero and Patterson (2015) branches in every country provides companies with a competitive advantage. It provides companies with opportunity to expand and growth along with the attainment of full global recognition.
In order to forecast a demand strategy, IKEA can adopt the survey method. With the application of this strategy, the company can analyse the responses of the customers and formulate strategies for the future. However, IKEA uses a different approach to predict the sales in the market (Brindley, 2017). For example, the company uses a method to cross-examine the responses of the customers while analysing the number of sales.
IKEA has adopted the Just In Time (JIT) approach to manage its inventories. As observed by Estenson (2016) the JIT approach can help companies to manufacture the products at the correct time. However, the technique has one limitation. The rate of failure of the suppliers in this technique can be high which can result in the failure to reach the overall target set by a company.
As observed by Christopher, Harrison and van Hoek (2016) the important challenge that IKEA face is the fact that despite its high revenue, the company spends an excess amount in areas less useful for its development. For example, excess cash on an innovative resource may hamper IKEA in purchasing materials responsible for maintaining quality.
According to Padmanabhan, Smith, Steckler and Veiga-Lopez (2009), the bullwhip effect can be considered as a distribution channel that helps in determining inefficiency within the supply chain management. In the case of IKEA, the causes and remedial factors of the effect may help the company to analyse the shift in the demand and supply rate of the customers. The capabilities possessed by IKEA in its supply chain can help in ensuring that the remedial factors of the company can help in gaining effectiveness in the market.
It is widely accepted that in the modern world, the role of information technology is important for the success of an organisation (Stadtler, 2015). Therefore, IKEA can implement information technology to improve the existing supply chain management to engage in online conference method. IKEA can improve its supply chain management by analysing the strategies undertaken by the competitors and develop its capabilities. It can be said that information technology can provide IKEA with an opportunity to grow its supply chain.
In order to maintain a competitive advantage it is necessary that collaboration be made with the suppliers and customers. With a proper foundation with the stakeholders, IKEA can ensure expansion and growth so that opportunities can be gained in the market. At the same time, Beske and Seuring (2014) stated that IKEA might face challenges such as economic fluctuation that can prevent the company from creating a positive impact for the customers.
IKEA possess self-inventory managements that assist the company to maintain partnerships with the suppliers. As analysed earlier, Intertek is the supplier of raw materials for IKEA. Along with this, the application of technology can help the company to gain an advantage in the policy of its supply chain management. The application of Just In Time approach can provide IKEA with risk of failing to meet its target.
In the opinion of Pagell and Wu (2009), IKEA can use a 9-step framework to analyse the level of integration present in the supply chain management. After the analysis about its application, it can be said that IKEA can be placed at the level three. It indicates that IKEA can validate the base line used in the supply chain model by analysing the possibilities that the company may gain by developing a competitive advantage in the market. Along with this, IKEA can implement the Triple-A approach.
As seen by Diaconu (2014) in the modern world, the role of sustainability is important for the success of an organisation. Several methods are adopted that can help in developing sustainability in an environment. IKEA maintains sustainability by manufacturing eco friendly furniture so that customers can be attracted and made to trust the company. This includes identifying an appropriate method that can help in the prevention of any type of environmental degradation. An example can be made by the fact that excess emission of the waste generated from curving of wood can be reduced by using rooms build for sustainability practises. This can help IKEA to maintain a stable position in the market and ensure that the sale of goods increases.
The application of the model proposed by Triggers can help in determining the position of IKEA. It can be seen that IKEA is staged at the signal stage. The determining characteristic of the signal stage include the high ability and high motivation. Thereby, it indicates the motivational influences and the ability of IKEA to maintain its competitiveness in the market. IKEA can analyse the internal as well as the external factors for the development of the competency of the market and the internal strength. According to Stevenson and Sum (2015), high motivation factor is an indication that the company protects the interests of the employees in a proper manner.
Figure 1: Triggers model
(Source: Seuring & Müller, 2008)
The analysis has shown that IKEA maintains a healthy relationship with its suppliers and therefore, work towards improving its supply chain management. One of the ways by which the company can attain competitive advantage and customer satisfaction is by its location. The products manufactured by IKEA are vast and extra cost for delivering the products to the customers can be reduced. Mangan, Lalwani and Lalwani (2016) stated that the distribution place of the products proves as the starting point based on which IKEA can procure its supplies to the customers.
IKEA maintains an effective relationship with the customers. As stated by Hugos (2018) customer satisfaction is important for a company as the customers are important stakeholders. The responses provided by the customers can help IKEA to understand the quality of products that it needs to maintain. However, one important concern for IKEA is that it needs to ensure that dubious situations such as the use of poor quality of wood and polish of the furniture are not repeated. Therefore, IKEA needs to take certain precautions to decrease any return of its products and make sure that customer satisfaction is maintained (Ikea.com, 2018).
In order to be successful in the competitive market, IKEA can implement the dynamic alignment model. Therefore, it is necessary for IKEA to maintain factors that are important in the application of the model. Firstly, continuous improvement of the products needs to be undertaken so that innovation and quality can be maintained. The second point that needs to be maintained is aligning the interests of the senior executives with the strategies adopted by the organisation. Therefore, IKEA can use the four-part dynamic alignment model to analyse the current supply chain of the company. The level of interaction between the partners can also improve.
The analysis shows that IKEA follows the parts required for maintaining an effective supply chain. IKEA undertakes a proper strategic planning and establishes clear goals so that employees can understand the goals of the organisation. The performance of the company is based on the accountabilities and the responses provided by the customers to the products of the company. It has been seen that IKEA provides its employees with an opportunity to participate in every decision-making session undertaken at the company. This justifies the motivating factor of IKEA as seen from the analysis of Triggers model (Ikea.com, 2018). The company also possess the ability to recruit talented employees so that effectiveness in the market can be maintained along with guarantee of providing quality products.
At the same time, the analysis made of the cause and remedy of the bullwhip effect shows that IKEA promotes a sense of enthusiasm among the employees. This can help the leaders and other interested parties of the company to reach the target and elevate the quality of the products manufactured by the company. It is seen that IKEA is driven by partnership it endures with the suppliers and the customers. Fernie and Sparks (2014) observed that such analysis provides evidences that IKEA belongs to mid-level of a hierarchical group with an emphasis on the supply chain management. Therefore, an improvement of the process can be made so that IKEA can develop its strategic process in the future.
Figure 2: Dynamic alignment model
(Source: Jabbarzadeh, Fahimnia & Seuring, 2014)
It has been seen that IKEA possess a supply chain, which includes taking care of societies and helping it to develop a strong work culture. It has been seen that the cultural foundation of IKEA is that to maintain the values set by its founders and to ensure that a proper sustainable business practice be maintained. The focus of IKEA is on the development of sustainability that helps in the development and address of the environmental issues of a country (Ikea.com, 2018). Therefore, in order to maintain such competence in terms of sustainability improvement strategies can be considered so that the effectiveness of the company can be maintained.
Gunn (2015) is of the opinion that the strategies adopted by IKEA can help the company in developing and maintaining the effectiveness of the market. Therefore, an improvement programme can be made so that the usefulness in analysing the products manufactured by the company can be analysed. The manufactured furniture need to maintain the sustainability so that the eco-friendly nature of business that it conducts can be upheld for the benefit of the customers. An example can be stated as in the case of curbing wood, the dust particles may mix with the air and provide problems for people with breathing ache. Hence, IKEA needs to ensure that raw material manufacturing that can create a hindrance in the society are not adopted and at the same time the company does not deviate from its cultural values and goals. Therefore, the company can maintain proper supply chain management.
IKEA is a leader in the manufacturing of furniture all over the world. However, the analysis pointed out that significant improvement can get IKEA to continue with its business in a positive manner. IKEA needs to ensure that major changes are avoided in the manufacturing department so that quality of the products can be maintained. It is important to maintain the mission, vision and goals of the company so that competitive advantage and flow of work can be attained. IKEA can do so by developing a new strategic plan that can help the company to continue with the sustainable development of its business. Thus, as stated by Jacobs, Chase and Lummus (2014) the improvement programmes of IKEA need to be based on the policies followed.
IKEA can keep the customers aware by using promotional methods through social media. IKEA can improve its inventory by keeping in mind its mission and vision. With the application of the benchmarking process, IKEA can ensure that it analyses the strategies adopted by its competitors in the market. Therefore, as stated by Lee, Padmanabhan and Whang (2015) IKEA can analyse the strengths of the competitors and develop strategies based on the strength and capabilities that it possess.
Conclusion
Therefore, it can be concluded that after the analysis observations can be made that IKEA follows a stable supply chain management system for its effectiveness. The importance of supply chain management is that its helps in maintaining the business activities of an organisation. The supply chain management system of IKEA is superior to its competitors and due to this; IKEA is the most reputed company in its field of product. Therefore, following the management process the vision of the company can be attained along with the development of its sustainable practices. The recommendations can help IKEA to maintain its dominance in the retail market and continue to design attractive products.
Reference
Beske, P. & Seuring, S., (2014). Putting sustainability into supply chain management. Supply Chain Management: an international journal, 19(3), 322-331.
Brindley, C. (Ed.). (2017). Supply chain risk. Taylor & Francis.
Christopher, M., Harrison, A. & van Hoek, R., (2016). Creating the agile supply chain: issues and challenges. In Developments in Logistics and Supply Chain Management(pp. 61-68). Palgrave Macmillan, London.
Diaconu, D.-M. (2014). Strengths And Weaknesses Of Current Supply Chain Management. Management Challenges For Sustainable Development, 15.
Estenson, J. G. (2016). Anaphylaxis . Melbourne: RFG publishers.
Fernie, J. & Sparks, L., (2014). Logistics and retail management: emerging issues and new challenges in the retail supply chain. Kogan page publishers.
Gunn, G., (2015). Critical thinking: assessing the risks to the future security of supply of critical metals. In EGU General Assembly Conference Abstracts (Vol. 17).
Hugos, M. H. (2018). Essentials of supply chain management. John Wiley & Sons.
Ikea.com (2018). Retrieved 20 October 2018, from https://www.ikea.com/
Jabbarzadeh, A., Fahimnia, B. & Seuring, S., (2014). Dynamic supply chain network design for the supply of blood in disasters: a robust model with real world application. Transportation Research Part E: Logistics and Transportation Review, 70, 225-244.
Jacobs, F. R., Chase, R. B., & Lummus, R. R. (2014). Operations and supply chain management (pp. 533-535). New York, NY: McGraw-Hill/Irwin.
Lee, H.L., Padmanabhan, V. & Whang, S., (2015). The bullwhip effect in supply chains. IEEE Engineering Management Review, 43(2), 108-117.
Mangan, J., Lalwani, C., & Lalwani, C. L. (2016). Global logistics and supply chain management. John Wiley & Sons.
Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2015). Purchasing and supply chain management. Cengage Learning.
Myerson, P. (2015). Lean Supply Chain and Logistics Management. Burglue: Herlad Publishers.
Padmanabhan, V., Smith, P., Steckler, T.L. &. Veiga-Lopez, A. (2009). Developmental programming: differential effects of prenatal testosterone and dihydrotestosterone on follicular recruitment, depletion of follicular reserve, and ovarian morphology in sheep. Biology of reproduction, 80(4), 726-736.
Pagell, M. & Wu, Z., (2009). Building a more complete theory of sustainable supply chain management using case studies of 10 exemplars. Journal of supply chain management, 45(2), 37-56.
Seuring, S. & Müller, M., (2008). From a literature review to a conceptual framework for sustainable supply chain management. Journal of cleaner production, 16(15), 1699-1710.
Stadtler, H. (2015). Supply chain management: An overview. In Supply chain management and advanced planning (pp. 3-28). Springer, Berlin, Heidelberg.
Stevenson, W.J. & Sum, C.C., (2015). Operations management. New York: McGraw-Hill Education.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download