Report on Impact of Design Thinking on IKEA

This report explores the impact of design thinking on IKEA and its innovation strategies. It discusses the concept of design thinking, organizational environment, innovation trends, and the alignment of innovation strategies. The report also provides recommendations for IKEA's future innovation efforts.

Running head: Report on Impact of Design Thinking on IKEA
Report on Impact of Design Thinking on IKEA.
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1Report on Impact of Design Thinking on IKEA
Table of Contents
Introduction................................................................................................................................3
Concept of Design Thinking:.....................................................................................................4
Organizational environment.......................................................................................................4
Innovation Trend:.......................................................................................................................5
Innovation strategy ensures strategic alignment:.......................................................................7
Impact of the selected innovation trend.....................................................................................8
Organisation’s innovation strategy responds to the innovation trend:.......................................9
Recommendation:....................................................................................................................10

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Executive Summary
The report is based on the innovation trend and the strategic management and designing
thinking for the company IKEA. The report emphasis on the Design thinking model and how
that has impacted the innovation front for the company. The methodology involves the
empathy, designing of the problems done preparing of the prototype and finally
implementation. How does the strategic management plays and important role after designing
the design thinking. The report is more into the analysis for after and before implication of
the process of design thinking s described by the paper Liedtka (2018). The topics are
clearly explaining the most important issue faced by the company.

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Introduction
Ikea is a Swedish multinational company that designs, innovates and sells ready to
assemble furniture. The furniture can be a kitchen set, office furniture’s, home accessories
and many more. It is counted as the world’s largest furniture retailer since 2008. It has a
revenue of US$44.6 billion in the year 2018. The company is a successful in selling the
highest amount of furniture over several countries. It has made a profit of US$4.898 billion.
There are 424 IKEA stores operating in 52 countries it has over 2.1 billion visitors to IKEA's
websites every year. The very famous IKEA is derived by the initial from “IK” being his own
initials, the “E” is for the farm he lived (Elmtaryd), and the “A” is for his home village
Agunnaryd. The company focus mainly on architecture and interior design. IKEA has been
active in addressing the child labor issues and tried its level best to include improving of
children opportunities so that they can control the future. IKEA is also blamed for the amount

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of pollution it has created in these years by cutting of the wooden pulp. IKEA’s dedicated co-
workers and customers we were able to donate €142 million in 2016.
IKEA uses design thinking in its product development process and also for showroom
experience. Ikea now operate by using the system thinking. The trend is how it develops the
process and showroom experience is created for the people and how the organization system
is operated. Generally the process in which the showroom is designed that gives the customer
the freedom to choose and purchase the goods by themselves with the help of the employee.
The company has started to deliver the good to them top their houses (Edvardsson, Enquist &
Hay 2006). The digital transformation has digitized their value in the market. This has
initiated the organization to manage thing better and the company is gaining from the design
thinking and system thinking.
The true design potential is to leverage the multidisciplinary team and service experience.
This innovate the new solution to implement the working in a new mindset.
Concept of Design Thinking:
A standard and superior thinking which has the capability to transform the design
thinking creativity to problem solving approach into a structured innovation approach by
giving a method tool to empathize with people, create human centred solutions and de risk
the failure by doing prototyping. The change that the organisation is looking for when they

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are in process of innovation (Brown & Wyatt 2010). The innovation is for development to
make the task easier and profitable. The Fig 1: Design Thinking
Problem that is faced when business is managed by using the old process by the
untrained team. The danger is when the lack of integration and continuity is missing then the
whole system starts to fall. There becomes an urgent need to close the gap to make the system
work right.
Organizational environment
It is set of forces that is surrounding the organisation. These forces have the potential
to affect the way it operates. The organisation needs to properly understand the need for
effective management. There is one internal environment and the other is the external
environment (Cozzarin, B. P & Percival. 2006)
A) Internal Environment: The internal environment is made of the organization's owners,
board of directors, physical work environment and culture. The internal environment has
strength and weakness of an organization. Trade union, Management, Current employee,
Share holders.
B) External Environment: while the external environment consists of opportunities and
threats of an organization. It include legal, physical economic, technology, social, political,
culture. It also consists of Competitors, Customers, Employee, Strategic, Planners and
suppliers, Economic, Technological, Sociocultural, Political-Legal and International.
These are the organizational environment of IKEA. Each of the factors make a huge
impact on the company management.

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Innovation Trend:
IKEA is known for innovative design and inventions. The innovation trend is not new for
IKEA they are known for the innovation masters who keep creating new things that makes
them the world leader (Chesbrough 2010).
The flat pack furniture revolution:- It was invented by IKEA. Which gave rise to product
that can be self-assembled. This was a totally new concept for the customer and this also
helped to understand the end of the clients and help them sort out the problem of transporting
problems. This also let the company to keep the cost of the product low.
Changing the methodology of shopping:- The space taken by the furniture become short
when the company started to manufacture flat packed furniture. The warehouse style
introduced where the customer use to see the products in the shop and then collect the order
from the warehouse.
Designs to best suit the young generation:- IKEA offers capsule collection furniture. The
design is suited for small space and for young generation whose priorities are different. To
introduce the variety to them they have followed a strategy to give names to these items so
that it can be easily associated to them.
Charity work and business:- IKEA do charity and that also is a plan of business. They
designed a refugee shelter to offer an alternative to old tents. They made water proof high
quality durable tents for affordable pricing.
Offering product made out of recycled products:- The company is committed to the
sustainability of the environment thus they are working towards the society safety. They are
involving into the use of recycled products. They use recycled plastic and wood to build
product that also are durable.

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Innovative move:- they are making furniture that easier to fix. They only need a snap in the
fixture side. The design has been innovated. These are called the wedge style furniture.
Smart appliance:- They are also creating appliance , furniture using new technologies these
technologies are so ne what most of the developing countries are unaware of the devices. The
automatic, WIFI and remote system are also infused that give the product a new styling.
Restaurant and food chain:- Ikea has started a food chain system that not only provide the
Swedish cuisine but also the famous worldwide cuisines. These also attracts the customer to
be associated with IKEA store.
These are the new innovation trends that the company has been following to apply the
methodology of design think to become a successful organization. Beating the competitor and
making the brand a well-established icon.
Innovation strategy ensures strategic alignment:
Innovation strategy is all about creating new value people willing to use and pay for.
Innovation strategy is not only about tactics or idea challenges but also about the following of
the mission, vision and value of the organisation for defines customer. It helps in structuring
and setting a performance boundaries for the possible outcome. The innovation goals should
not be separated from the objective of the organisation. Ways by which innovation strategies
alignment with the strategic alignment (Afuah, A. 2003).
Understanding the impact of growth on the strategic innovation:- How is the
innovation strategies have been formulated to meet the requirement of the growth nessacity
of the organisation. How quickly the innovation is adopted in the market and the consumer
are adopting the new technologies. The need to strengthen the current strategies to meet the
goal and company domain.

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Identifying the search field:- The most important factor when it comes to identifying the
field of business. When the company is focusing to target a market that is best suited for the
product may not be the real picture. Thus the innovation is best required at the space with a
well-designed strategies to launch and to exploit the profit form the market. The search field
needs to be shown with a link between product benefit, performance and attribute.
To transform the organisation for delivering the innovation results:- The plan needs to be
transformed to action and here the action plan is made to commence the idea. They sometime
recruits team or a officer to look into the matter of implementation. They need to understand
that master the innovation is and journey and not a destination. The process may look
disconnected and standalone but some where they are making sense and are connecting to the
points and links.
The company sustain the market and competition only when continuously investing in
innovation strategies for functional strategic alignment.
Impact of the selected innovation trend
The impact of the selected innovation trend is doing a successful business in the
industry. There are many trends that are creating a new customer centric market. The
innovation is done to make the market perform and make the business successful. One of the
innovation trends that has been formed keeping the importance of the environment is
providing the sustainable market. The sustainable innovation where IKEA is making
furniture’s by recycling the products. The products are plastic and used woods the process is
to use these products by recycling (Andreassen, Olsen & Calabretta. 2015).
They are making changes to the motto of the company by becoming the next level
furnishing and innovative company. They are home furnishing company they not only focus

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on making furniture but also innovating in the home solar panels and battery storage. They
are exploring the urban organic farming that will be for the kitchen purpose. They are more
of an innovative business keep creating new products, forming new trends and moulding
customer. The IKEA ensure that everyone has a right to have a better life. The company is
full of innovation and that can be seen in the design of the company.
Fig1: canvas by Osterwalder and Pigneur (2010)
The threat is the value proposition as that is where the competition changes the market
and company faces the cost burden. The revenue is also affected by the wrong value
proportion. The opportunity will be the customer relationship front as IKEA is very sensitive
towards the empathy of the customer. They are doing all the work for a happy and successful
customer reviews. The company has strong base and is able to tailor a customer centric
service that is creating a strong brand value.
Organisation’s innovation strategy responds to the innovation trend:
The organisation’s innovation activities in an enterprise is created on the base of
analysis and research in the beginning. The training should be given based on the innovative

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level that the company is planning to implement. The motivation of the employee is also very
important for the successful innovation implementation.
The decision-making process is again responsible for an innovative manager who will
analyzes:
 The use of innovative ideas
 Innovation the difficulty of implementation
 Value added and risk.
 Return.
This process of innovation designing and thinking results in future innovations. The
innovation capabilities that the organization should develop is for the training of the
employees. They should make such informative technology that can easily train the
employees and make a proper mechanism to fill the gap. The innovation value that is created
should timely be exploited to gain the market share. The market is ever changing the change
is also for the exploitation. The innovation strategies that work in the structural alignment
wins the market need and makes the best return.
Recommendation:
The Strategic alignment is a methodology that results in linking an organization's
structure and resources with its strategy and business environment. The alignment enables a
high performance and good result by optimizing to the people and also to see the meeting to
the objective of the organization. It should be viewed in a broader sense which encloses all
the in and around the origination. The innovation is an ongoing process. Sometimes it lead to
change management that is to be incorporated in the business process. The innovation trend is
very important for the company to be able to sustain the competition so that they are gaining
the revenue from the market. The innovation trend and strategic alignment was so necessary

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for the business to run smoothly. The trend of the design thinking is to develop a deep
understanding of the challenge then clearly articulate the problem and use the strategies to
select the right solution, then design the prototype for then solution, finally do the testing and
implementation in the system. This the ultimate methodology for a successful business IKEA
has always been innovative towards the issues of the environment and the need of the new
generation. They have been innovating through out to make a difference in the society.

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