The main Ikea's service is to provide all consumer design furniture at a low price. IKEA entails a qualitative change by making design and practical products at the same price than the basic one. IKEA creates something new by creating new processes through innovative design, production, distribution, and sales techniques.
The production of IKEA is innovative, for instance, through the use of wood coming from sustainable forests. IKEA works in partnership with the National Forest Office in order to support and improve rebuilding and protection of forests. The distribution process and sales techniques are also innovative. Indeed the innovation is the "cash and carry" or "self service" systems. People take products in the warehouse; assume the transportation and assemble the furniture. All these innovative processes raise the productivity of IKEA because IKEA needs less employees, less sales man, less deliveryman for the same amount of sales.
IKEA has developed some technological instruments like the IKEA® Home Planner, which enable customers to plan the organization of their rooms with Ikea's products. But technical development is not the key point of Ikea's innovation. Technologies are not their comparative advantage but this is not an important point in their activity and in the furniture's market.
As IKEA fulfils the fifth criteria of the innovation's definition, we can say that IKEA developed a service innovation.
[...] IKEA is not in a strategy of differentiation in terms of product but in terms of process. On the contrary IKEA has a strategy of standardization of furniture. IKEA products furniture in huge quantity and standardizes the pieces (foot of tables, bed indeed a piece can be used for several models of furniture. This standardization of products allows them to play on cost. Costs are also reduced thanks to the low cost of transportation from the production place because as furniture is in kit, the place in boat and truck is saved. [...]
[...] Indeed it's very difficult to obtain help and advices form salesmen and even if a salesman is free, he can help only in his department and not on the whole process of purchase. I don't put IKEA in conflict area” because it's not like a monopole, customers can leave the shop and go in another one if they feel dominated. Cooperation Physical Intellectua Affective l IKEA High High Medium Medium Cooperation: The cooperation level of customer is very high because they have to be very active (take furniture in warehouse ) in order to provide the service. [...]
[...] IKEA provide a huge range of services like: - Before going to IKEA: availability of catalogues, products on web sites, software IKEA® Home Planner, and possibility to check the availability of products in a specific shop - During shopping : installation of kitchen, advices, rent of vans for transportation, IKEA family cards with advantages, several modality for payment, kindergarten, restaurant - After sales: map and advices to assemble the furniture, guarantees, possibility of exchanges The specific know how of IKEA is to provide atmosphere very attractive, to provide all service to give envy to costumer to stay the all day because they feel like at home. [...]
[...] IKEA satisfy the cognitive need because IKEA allows customer to see furniture and items in situation, customer can touch, smell, try customers use all their sense, their imagination, their desire. IKEA satisfies also customer's aesthetic need because they create design furniture at low price. Customer implication Active participation of customers (high) While shopping in IKEA, customers are constantly participating. They have to stride along the several departments and to write down references of product they want on a sheet of paper. [...]
[...] The marketing mix of IKEA is a success: Product: A huge range of products form furniture to houseplants passing by toys for kids they propose some functional, solid, design and cheap furniture. Their products consist of a strategic innovation through the stockage and distribution in kit. Price: Ikea's products have an excellent ratio quality-price and are accessible to most people, particularly for young people. These low prices come from the self-service delivery system and the fact that IKEA has integrated the conception and has good relationships with its suppliers. [...]
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