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Analisis De Coosto Beneficio Essay

4772 words - 20 pages

Today, IKEA is the world’s largest furniture retailer and it is also internationally known as home furnishing retailer. IKEA always concern for people and the environment. Besides that, it also responds to the public and customer’s rising concern for sustainability in its choice of product range, suppliers, stores and communication. However, there are still problems faced by IKEA from the aspect of organization development that requires changes to take place in order for the organization to improve efficiency and effectiveness of its existing operations and also to ensure that goals and objectives of the organization can be achieved.

The first problem encountered by IKEA is the size and ...view middle of the document...

This is because their management team realized that there are some of the positions that didn’t come out with any result which mean the organization cannot get what they expected from the employees. By the way, they also decided to reduce the pace of their expansion from 25 stores in a year to 15 stores because they realize that the expansion has gone a little too fast and they need to slow down. Develop a long term planning is very useful but when they come to over expansion, it is time for them to make another decision to stop or continue the plan. The reason why this kind of problem will be occurred is because of the changing environment and over planning of the management team. The management team has to make a decision very careful that well organized all of it.

The third problem faced by the company is the need and demand for low-cost products. Low prices are one of the linchpins of the IKEA concept in order to help and make customers want to buy from IKEA. Besides that, IKEA’S pricing strategy targets consumers with limited financial resources. Thus, the cost needs to be balanced against quality. This needs to be balanced against producing good quality. IKEA also needs to differentiate itself and its products from competitors. The important key is that it needs to ensure that there is no compromise between being able to offer good quality products at low prices. Furthermore, in terms of its economic factor, recession slows down consumer spending and disposable income reduces. Low prices appeal to IKEA’S customers especially in tough financial times.

The fourth problem faced by IKEA is in terms of market forces, which is there are more and more competitors from the same industry is entering the low price household and furnishing markets. Thus, IKEA needs to reinforce its unique qualities to compete with these. It also needs to differentiate its products from its competitors. Competing between competitors always occurs in the business world and it is very common. Besides that, in order for IKEA to be the world’s leader in household and furnishing markets, it needs to come out with ideas how to puts up high barriers to entry for smaller companies from entering the market. IKEA could not under-estimate all others competitors, they must put a lot of efforts to make sure the organization is performing well.

The fifth problem encountered by IKEA is people are spending less in IKEA stores. Based on the research, the average check is going down a little bit, and the numbers of visitors is reduced. People are coming less often to the stores. There should be some reasons that why people are spending less in IKEA stores. And thus, during these times, they need to come out with some suggestions and to be more creative in thinking ways so that it could attract people to the stores. Furthermore, some critics of IKEA also say that their furniture is easy to break, hard to assemble, and heavy to transport. These critics will affect the good will...

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