Operations Management in IKEA: A Case Study

Running Head: MANAGEMENT 0
OPERATIONS
MANAGEMENT

MANAGEMENT 1
Table of Contents
Introduction................................................................................................................................2
Operation strategy and Organisation strategy............................................................................2
Order winners and Order qualifiers............................................................................................5
Value Chain of IKEA Product Mix............................................................................................6
Recommendations......................................................................................................................8
Conclusion..................................................................................................................................8
References..................................................................................................................................9

MANAGEMENT 2
Introduction
Operation management is the administration of business practices to attain the
objective of injecting efficiency in the process of production, which in turns leads to improve
profitability (Tang & Musa, 2011). OM is line up with the business strategies of an enterprise
to transform input such as man, material and labour into outputs like services, commodity and
products.
To understand the concept more explicitly, IKEA is selected as an organisation based
in Sweden and founded by Ingvar Kamprad 75 years ago. In its starting phase, IKEA
originally sells pens, watches and jewellery at a reduced price to fulfil the expectations of
customers. Currently, IKEA is one of the leading seller and retailer of home furnishing in the
world. The company operates in more than 40 countries around the world with having
extensive product range i.e. cabinets, table, chairs and various other household goods
(Jonsson, Rudberg & Holmberg, 2013).
Operation strategy and Organisation strategy
Operations are termed as day to day organisational activities that create unique value
and help in attaining core objectives. They play distinctive roles extend towards overall
organisation development and growth. Moreover, the scope of operations varies with the size
and type of business.
Operation strategy is the integration and collective use of production capability,
manufacturing strength and information technology (Baines & Lightfoot, 2013). With the
help of effective operation strategy, an organisation can attain certain objectives related to
product innovation and design that gives competitive edge to the firm in the industry. Various
broad operation strategies include Just-in-time production (JIT), Total quality management
(TQM), benchmarking and so on. Parallel to business strategy, there are five operations
competitive priorities i.e. cost, quality, speed, dependability and flexibility.
There are various performance objectives while considering operational strategic of
IKEA that helps the company to be positioned as a competitive leader in the industry.