Essay about Operation Management

2174 Words Nov 23rd, 2012 9 Pages
How might IKEA’s operations design is different from that of most conventional furniture retail operations? Discuss the operations design while analyzing the positive contributions towards customer satisfaction and company’s growth.

Being one of the famous brands for furniture, IKEA has its own operations design that had been proven successful based on the growth of the company throughout the years of business. IKEA’s vision is clear which is ‘to create a better everyday life for the many people’ and aims to offer well-designed and functional furniture at a very low price that as many people as possible will be able to afford them.

Unlike other convention furniture retail, IKEA stores are located at the most strategic location in
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Lastly IKEA’s low cost competitive advantage can be easily mimicked if new competitors decided to apply the same strategic as IKEA by offering low cost furniture. New competitors might gain part of IKEA’s target market share by targeting the same segment of consumers IKEA targeted. The low cost battle between IKEA and its competitors also may cause IKEA’s profit maximization to decline, thus may also affect the growth of the company.

Discuss the ‘operations function’ within IKEA and how it is different from the ‘sales function’ as a core activity of any retail businesses.

IKEA’s ‘operation function’ can be described as a body or department within the company that manage various or most operation planning towards the product and service that IKEA offers. IKEA’s operation function can be analysis using the 4 V’s of operation model. This model consisted on 4 dimensions namely Volume, Variety, Variation and Visibility can be use to differentiate IKEA’s operation function from other sales function that other retail business adopted (Graelaws, n.d).

In terms volume, IKEA does have a high volume of products to offer compares to any retail business. By producing product in a high volume it would allow IKEA to achieve economic of scales, which in turn would help the company to attain its objective to provide furniture at a very low cost. Secondly variety, IKEA has a wider range

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