Project Management Case Studies: IKEA and Timbuk2
Table of Contents
Case I: IKEA Design and Pricing 3
Case Summary: 3
Key Terms: 3
Case Questions 5
Case II: The Tao of Timbuk2 9
Case Summary: 9
Key Terms: 10
Case I: IKEA Design and Pricing
IKEA is a Swedish retailer that dominates the home market in 32 countries and is currently expanding in the United States. The success of the company is providing low cost products that include function, modern design, environmental considerations and healthy manufacturing conditions. IKEA designs its products, manufacturing, and distribution systems ...view middle of the document...
Order qualifiers are dimensions that are used to screen a product or service as a candidate for purchase. IKEA strives to win orders through design and price-value relationship. Many customers travel long distances to shop at an IKEA store because of these order winners.
• Core competency – The one thing that a firm can do better than its competitors. The goal is to have a core competency that yields a long-term competitive advantage to the company. IKEA builds its competitive nature into the design and development process. The expansion of stores and revenue growth are proof that IKEA is winning business through its dedication to process improvement and great pricing.
• Concurrent engineering – Emphasizes cross-functional integration and concurrent development of a product and its associated processes. IKEA’s development process considers the supply chain as well as how the product will be shipped to stores and customers. The focus is lowering the total cost and helps the customer maintain its competitive advantage.
• Value analysis – Analysis with the purpose of simplifying products and processes by achieving equivalent or better performance at a lower cost. Targeting the price from the beginning of the design process both drives and focuses the value analysis of production.
• Ecodesign – The incorporation of environmental considerations into the design and development of products or services. These concerns relate to the entire life cycle including materials, manufacturing, distribution and the eventual disposal of waste. Recycling waste material, incorporating energy efficiency into buildings, using sustainable resources, and integrating innovative material into products is all part of IKEA’s ecodesign.
1. What are IKEA’s competitive priorities?
IKEA’s competitive priorities include winning through good quality at low prices. The company simultaneously works through design, manufacturing and distribution to lower costs while delivering products that make people feel like they are living well. The expertise demonstrated in these processes is not able to be duplicated by other companies.
2. Describe IKEA’s process for a developing a new product.
IKEA continuously works to improve the cost of its products without sacrificing customer expectations. The steps of product development are:
a. Pick a price – Product development begins by targeting the in-store price. From here, suppliers can be contacted to help meet the goal. Materials, colors and design will all contribute to the production cost and must be considered.
b. Choose a manufacturer – IKEA partners with manufacturers and products are often developed with close cooperation in order to provide the most efficient solutions which can lower production costs. IKEA’s goal is to create a better everyday life for many people and the way that their products are made is as important as the final product. IKEA promotes health and safety in the factories...