Managing Innovation in Business

This report analyzes the importance of innovation in the growth of IKEA Company and suggests inbuilt and invisible technology as a future innovation capability. It also discusses the future of the furniture industry in 2020 and beyond.

Managing
Innovation in
Business cw2

EXECUTIVE SUMMARY
This report is summarised as continual part of project which has been presented in last
semester, it is based on innovation as well as it importance in growth of IKEA Company. Within this
report, several innovation has been included which aids respective company in attaining future
capabilities in industry evaluation. In addition to this, second part of report is related to innovation in
growth which contributes long term success for organisation. IKEA is multinational company which
designs and sells ready to assemble furniture.
This report will analyse several innovation practices deeply and these are expected by
company for meeting trends for future by 2020. It has been found that, new innovation are
continuously anticipating through competition which result in customer attraction and influence them
to pay any cost for adding innovation as their life part. To IKEA it has been recommended to bring
Inbuilt and Invisible Technology.

INTRODUCTION....................................................................................................................................4
MAIN BODY...........................................................................................................................................4
The future of industry 2020 and Beyond.............................................................................................4
The Organisation Innovation Requirement 2020 and Beyond.............................................................6
Building the future innovation capabilities for organisation................................................................7
CONCLUSION........................................................................................................................................9
REFERENCES.......................................................................................................................................11

INTRODUCTION
Innovation is the procedure of translation idea or innovation within goods or services which
result in creating values for that customers will pay. It is important that idea should be replicable at an
economic cost as well as should satisfy specific need. Simply innovation is act of making, inventing as
well as producing something new. Here, now innovation can be realized with creativity. Innovation
provides assistance to company in meeting their customers demand within effective manner. IKEA is
multinational furniture company, whose aim always is to create innovation within their products and
services. IKEA is Swedish-origin Dutch headquartered multinational group which design as well as
sells ready to assemble furniture, kitchen appliances and home accessories along with useful goods as
well as occasionally home services. It was founded in 1943 by Ingvar Kamprad and they are serving at
worldwide level.
Therefore, respective company is consider as perfect example within innovation as it offer
latest product and services within market area for grabbing attention and retention of customers
loyalty. Main purpose of respective report is to analyse innovation concept in retail industry and how
it will implement in successful manner. Moreover, it also highlights industry future of 2020 and
beyond as well as sustainable organisational innovation required till 2020 and beyond. Along with
this, it also covers future innovation capabilities of IKEA Company for bringing innovation in
furniture.
MAIN BODY
The future of industry 2020 and Beyond
In today’s competitive world technology have wide impact on furniture industry as
manufacturers are designing urban furniture by utilisation of totally new structure. Technologies have
impact on changing material as well as processing which use for manufacturing of furniture.
Manufacturers now able to design portable as well as versatile furniture such as modern restaurant
tables which use for patios. In addition to this, technology also result in rising trend of online
shopping. Moreover, customers also want designer furniture as they are preferring designers who are
using latest equipments instead of using traditional technology. This directly indicates importance of
technology within furniture industry. In simple term it can be said that, now a day’s everyone want
good ambiance of their home, offices and so on. Along with this, for social status purpose also it is
wish of people to have good interior which easily attract friends and family as well as easily result in
rising social status. Thus, furniture industry have wide future and people will like more to send within
respective sector for several reasons as discussed already. There are several major players of United

Kingdom Furniture market such as IKEA, Bed Bath & Beyond Inc., Wayfair Inc., Dunelm Group
PLC and DFS Furniture PLC. Thus, future of industry 2020 and beyond in furniture industry seems to
be changing constantly which give wide impact on working of IKEA. The United Kingdom furniture
distribution is the highest share of non-specialist retailers, because of significant presence of
alternative channels such as hypermarkets, e-commerce, home ware retailers as well as departments
stores in comparison of other European nations.
 United Kingdom comes at second home furniture consumer within Western Europe, providing
approx. 17 percent demand of Western Europe as well as third importer and absorbing more
than 15% of WE imports.
 In 2016, furniture manufacturing organisations of United Kingdom are contributing 8.4 billion
GBP to UK’s Gross Domestic Production which is equal to 1.6% of manufacturing industry.
 In addition to this, online players also have their contribution in furniture industry as they are
blurring boundaries within online and offline experience with own takes on traditional store
concepts.
 In addition to this, in relation of economic and political uncertainty caused due to Brexit, in
2017 home furnishing started performing relatively well.
Apart from this, there are several key market trends within UK furniture market. Explanation of these
are as follows :-
Household expenditure on furniture and floor coverings - As of 2017, UK households spent an
average of GBP 17 a week on furniture; GBP 3.5 were spent weekly on soft floor furnishings; spent
GBP 1.1 on Fancy decorative goods were spent weekly, GBP 0.3 were spent weekly on hard floor
coverings and GBP 0.4 hard floor coverings on garden furniture (UK HOME FURNITURE MARKET
- GROWTH, TRENDS, AND FORECAST (2020 - 2025), 2020).
Kitchen furniture segment - Kitchen Furniture includes fitted kitchen units as well as other
wooden furniture used for preparing food or for food storage. Refrigerators, stoves and other
household appliances are not included. The value of the market is estimated and may vary since
service fees for installation are not taken into account. Kitchen Furniture segment revenue amounts to
USD 9,760 million in 2019. In relation to the total population, per person revenues of USD 149 are
generated in 2019.
The Organisation Innovation Requirement 2020 and Beyond
Retail industry is wide in nature as well as having large number of organisation which result in
high level competition. Thus, it is important for IKEA as an part of retail industry to come with some
innovative product in market as which help them in attracting large number of customers in effective

manner as well as also in gaining long term sustainability within business environment. In addition to
this, it has been believed that retail sector organisations are important for society and also their
development because it help people in living their life comfortably. IKEA is multinational furniture
company, whose aim always is to create innovation within their products and services. IKEA is
Swedish-origin Dutch headquartered multinational group which design as well as sells ready to
assemble furniture, kitchen appliances and home accessories along with useful goods as well as
occasionally home services. For gaining competitive advantages with business environment it is
important for IKEA to come with some innovative product within market area. Explanation of these
are as follows ;-
 Inbuilt and Invisible technology – In competitive and advanced business environment
technology have wide impact on furniture industry. So for gaining better place in competitive
business environment IKEA offering various in-built technologies within their furniture like
LED lights, USB ports as well as charging capability. It will result in providing such facilities
as well as house which will be full of technology everywhere. This in near future result in
home which will be technologically smart as well as sophisticated. In furniture there is not
only inbuilt technology but it is also invisible. Such type of furniture will not only provide
luxury feeling to house but also comfort zone to people also as they should not have need to go
for charging their gadgets as they get charge or use technology while sitting on furniture. With
the assistance of such features in furniture IKEA will be able to attract large number of
customers because it is innovative technology which can easily grab attention of people.
 Going Green – Now a day’s people are getting more familiar about eco-friendly products
because of this upcoming trend and gaining competitive advantages IKEA decide to create
eco-friendly furniture. Global awareness related to environmental issues is driving this trends
which result in increasing demand of eco-friendly furniture as it become advantages for IKEA.
This will directly give positive impact in several manners such in increasing sales. Customer
base, profitability, brand image, customer loyalty and many more. But in comparison of other
furniture eco-friendly furniture is more expensive because they are free from harm as well as
dangerous chemical which are totally safe for indoor use. Along with this, they create good
surrounding in house, offices or were such furniture as using. Apart from this, most important
feature of eco-friendly furniture is that these can be recyclable as they are not at all harmful for
environment.
Thus, above mention innovation will take place by IKEA by 2020 or beyond it which will assist
them in building brand image in business environment and also help in providing quality products
with better services to customers. Although, retail industry is emerging that need something new

or innovative within business so that demand of customers will get fulfilled in proper manner and
IKEA will be able to generate high revenue.
Building the future innovation capabilities for organisation
Innovation is the procedure of translation idea or innovation within goods or services which
result in creating values for that customers will pay. It is important that idea should be replicable at an
economic cost as well as should satisfy specific need. Simply innovation is act of making, inventing as
well as producing something new. Here, now innovation can be realized with creativity. Innovation
provides assistance to company in meeting their customers demand within effective manner. It is
important for an business firm to frame innovation strategy because it will result in company success.
For coming up with innovation it is important to have proper communication to staff members so that
each and every employees will take participation within appropriate manner. Moreover, innovation
road map is tool that help an business firm in development of innovative strategy. In simple term it
can be said that, roadmap is timetable design for successful innovation and it is also visual
presentation strategic goals with its time axis. Moreover, it can be said that innovation roadmap is
navigation system for preceding specific topic. It is essential for company while coming up with
something innovative in market area and also assist in customers satisfaction. Explanation of
innovation roadmap in relation of IKEA when they are bring inbuilt and invisible technology as well
as green going furniture are as follows :-
Suggest – Innovation suggested for IKEA is going green furniture and inbuilt and invisible
furniture it will provide innovative as well as eco-friendly products to customers. This will be best
innovation for respective company as it will help them in fulfilling customer’s needs and wants related
to innovation in more effective manner. Along with this, when customers get quality services and
product they will become loyal part of IKEA company.
Reason – There is wide reason behind selection of respective technology as people are getting
more aware about eco-friendly products so this idea of going green will provide assistance of IKEA in
attracting large number of customers. Along with these eco-friendly offering company is also focusing
on technology as they are bring furniture which have LED lights, USB portal and so on which can be
inbuilt as well as invisible.
Impact of changes – There will wide impact of changes in working of IKEA explanation of
these are as follows :-
 Research and development – R&D is related to the activities which an business firm has to
undertake for innovation purpose and also for introducing new product as well as services.
Research and development is basically first stage within development process because goal of

this is to bring new product and services within market area. For an organisation it is important
to acquire Research and development process as it will help in introducing product or coming
up with innovation in existing offerings. Thus, manager of IKEA will conduct research and
development session so they will be able to known about difficulties as well as necessities
which required in innovation. Respective company is coming up with eco-friendly as well as
inbuilt and invisible technology in furniture. For this purpose it is important to conduct
research and development session which help in knowing advantages as well as pitfall of
innovation they are coming within market.
 Resources required – Resources are the sources which needed to supply as well as
manufacturing of products and services. If IKEA will able to manage resources in effective
manner they will supply innovative furniture to their customers in appropriate manner
according to the requirement and also help in making them satisfy. Thus, for manufacturing
purpose it is important to have resources according to the requirement
 Cost changes - In order to develop innovative product in retail industry there is requirement of
near about 250k Euro, which will be distributed in for conducting several activities which are
mention below:-
Expenses Amount
Research and development 25000
Marketing 16000
Advertising 10000
Material 170000
Human resources 26000
Total 247000
For successfully implementation of new technology or new features in furniture, IKEA
Company has to make a large investment. As per above mentioned cost table, it would be near about
250k Euro. Hereby, 16k Euro is required for promotional and marketing activities as well as 26k Euro
for human resource development is required.
 Technical skill required – t is important for IKEA Company to adopt several technology in
order to offer innovative product in effective manner to their customers. Respective company
will arrange training and development session for their staff members which help in coming uo

with innovation in effective manner as well as they will be able to serve customers in more
appropriate manner and make them satisfy also.
Feasibility – It is important for IKEA to practically implement their selected innovative idea
so that they will be able to identify its working with effectiveness. Before taking approval of
innovative idea it is important for business firm to check its feasibility. So that, if there will be any
issue then will identify in advance and major steps will be taken in relation of same.
Approval process (Board meeting or formal meeting) – It is important for company to
discuss innovation with their board members while bringing it is market because their approval is
necessary. Moreover, for company it is needed to implement positive changes within their practices
because with the assistance of this they will be able to determine success path. Before implementation
of any modification there is requirement of approval from high authority because they are the one who
help in implementation of changes according to the business need. IKEA is well known organisation
of retail sector which operating their business at global level. While implementation of innovative idea
it is important for them to take permission from higher authority because they are the one who help in
implementation of innovation. By this procedure they will be able to create legal framework of
working in company as well as will be able to serve in better manner to users without facing any issue
or conflicts. In simple term it can be said that implementation of new idea required permission from
higher authority, direction as well as other legal bodies of each and every country in which company
is operating. There approval will help in implementation of modification in effective manner which
result in success and growth of company. Whereas, unapproved innovation may result in negative
impact on the working of company. Thus, their is requirement of authority for implementation of
changes in appropriate and legal manner.
Apply the changes – When innovation will be discussed within meeting several new option
will come out which will provide assistance to IKEA in implementation of innovation effective and
also in making it strong. Each and every member have different skills and knowledge which will be
beneficial for innovation purpose and help in doing things within more effective manner.
Review impact of changes – It is last stage of innovation road map all the modification will
come out and discussed in board meeting for taking review of every member. So that, overall
innovation project will reviewed in appropriate manner so there will be no chances of any mistakes.
CONCLUSION
After going through entire discussion it has been concluded that, Innovation is the procedure
of translation idea or innovation within goods or services which result in creating values for that

customers will pay. It is important that idea should be replicable at an economic cost as well as should
satisfy specific need. Simply innovation is act of making, inventing as well as producing something
new. Here, now innovation can be realized with creativity. Innovation provides assistance to company
in meeting their customers demand within effective manner. Thus, for an business firm it is important
to come with innovative product in market area for attracting large number of customers as well as
also for serving them in appropriate way. Along with this, it also result in gaining competitive
advantages as well as also help in generating revenue and building brand image in market at global
level. Retail sector is emerging which result in several innovation in 2020 or beyond this such as
Inbuilt and Invisible technology as well as going green furniture.
Innovation in furniture as inbuilt and invisible technology help in attracting customers in more
effective manner as well as also result in gaining competitive advantages. So for gaining better place
in competitive business environment IKEA offering various in-built technologies within their
furniture like LED lights, USB ports as well as charging capability. It will result in providing such
facilities as well as house which will be full of technology everywhere. Such type of innovation result
in house full of technology and better facilities in comparison of before. Apart from this another
technology in which IKEA focusing in going green which mean offering Eco-friendly products. They
create good surrounding in house, offices or were such furniture as using. Apart from this, most
important feature of eco-friendly furniture is that these can be recyclable as they are not at all harmful
for environment. People now a day’s are getting more eco-friendly as they prefer to buy such product
which are not harming their environment. Thus, going green innovation will assist IKEA in attracting
large number of customer, increasing sale, building brand image and many more.

REFERENCES
Books and Journals
Ahn, J.M., Minshall, T. and Mortara, L., 2015. Open innovation: a new classification and its impact
on firm performance in innovative SMEs.
Chun, D., Chung, Y. and Bang, S., 2015. Impact of firm size and industry type on R&D efficiency
throughout innovation and commercialisation stages: evidence from Korean manufacturing
firms. Technology Analysis & Strategic Management. 27(8). pp.895-909.
Collet, C., Hine, D. and du Plessis, K., 2015. Employability skills: perspectives from a knowledge-
intensive industry. Education+ Training. 57(5). pp.532-559.
Dincer, I., 2017. Importance of research, innovation and commercialisation for technological
success. International Journal of Research, Innovation and Commercialisation. 1(1). pp.8-22.
Greenaway, D. and Rudd, C. D. eds., 2014. The Business Growth Benefits of Higher Education.
Palgrave Macmillan.
Hang Do, T., and et. al., 2014. Predicting anticipated rent from innovation commercialisation in
SMEs. European Journal of Innovation Management. 17(2). pp.183-208.
Hemphill, T. A., 2014. Patent assertion entities: do they impede innovation and technology
commercialisation?. Technology Analysis & Strategic Management. 26(7). pp.717-731.
Ismail, N., Nor, M. J. M. and Sidek, S., 2015. A framework for a successful research products
commercialisation: a case of Malaysian academic researchers. Procedia-Social and
Behavioral Sciences. 195. pp.283-292.
Mazzarol, T., and et. al., 2014. Perceptions of innovation climate and the influence of others: A Multi-
country study of SMEs. International Journal of Innovation Management. 18(01). p.1450009.
Miller, K., and et. al., 2016. Knowledge transfer in university quadruple helix ecosystems: an
absorptive capacity perspective. R&D Management. 46(2). pp.383-399.
Sengoku, S., 2015. Innovation and commercialisation of induced pluripotent stem cells. Stem cells in
regenerative medicine: Science, regulation and business strategies, pp.423-446.
Online
UK HOME FURNITURE MARKET - GROWTH, TRENDS, AND FORECAST (2020 - 2025),
2020.[ Online]. Available through < https://mordorintelligence.com/industry-reports/uk-home-
furniture-market>