Business Report: IKEA App - Smart Furniture Business Development

This business report addresses the challenge faced by IKEA in adapting to the smart furniture market. The report identifies the problem of retaining and attracting new customers who prefer smart furniture and proposes a solution through the development of a mobile application. The report provides insights into the problem, suggests a solution, and describes a business model for the IKEA app, including customer relationships, key activities, value proposition, cost structure, and revenue streams. It highlights the financial benefits, such as increased sales and customer engagement, and discusses strategic fit. The report includes a summary of the proposed IKEA app, its features, and its potential to control furniture and provide a communication portal for clients. It also mentions the company's global presence and the app's ability to address customer problems related to smart furniture. The report emphasizes the importance of innovation and adapting to technological advancements in the furniture industry.

THE BUSINESS REPORT
DEVELOPING AN APP FOR THE
IKEA COMPANY

THE PROBLEM
 The IKEA company main problem is to develop a
way in which they should keep up with the smart
furniture for smart homes and smart offices .
 The use of automated furniture makes it more
comfortable for customers and it exactly what the
clients are looking for (Garnier, M., & Poncin,
2019). .
 The shift of customer needs explains why there has
been seen a growth in revenues of the companies
rental services. The IKEA company main problem is
to develop a way in which they should keep up with
the smart furniture for smart homes and smart
offices (Garnier, M., & Poncin, 2019)..

THE PROBLEM
 The company is struggling to retain and
attract the new generation of customer and
clients that prefer using smart furniture
which by the way is the major trend in the
market. The company has to find a way to
create furniture that is smart (Garnier, M.,
& Poncin, 2019).
 Smart furniture that use technology in
homes and houses as a way of reaching a
new target and reducing the furniture
renting rates while increase furniture sales.

THE PROBLEM INSIGHT
 Failing to introduce technological change into the IKEA
organization through adopting smart furniture has led to
different set of challenges to the company and the
management (Marazzi, 2015).
 There has been reduction in clients buying furniture from our
company. In the past six months the company has recorded
a drop in profit margins of about 6% in customer direct sales.
The main reason for these financial drops has been realized
as the failure by the company to adopt smart furniture
products. The company has good offers to their customers.
 The aspect of free delivery that saves on costs and transit
time has since seen the attraction of many customers;
however, the company is losing new customer and client
generation that largely depend on technology.

THE PROBLEM INSIGHT
 The company’s core competency is based on innovation
which hasn’t happened in terms of adapting technology
smart products. The company has remained innovative in
designing the furniture according to customers demand and
also according to styles that remain attractive to customers.
 However, the company chief strategists realize that there is
a rather blank opportunity that exists since smart products
are not being produced in the way that they should (Ngai &
Falkheimer, 2017).
 The company has realized that it will soon drop its best
sales and client to competitors who have integrated making
furniture with technology so that they make smart furniture.

SOLUTION TO THE IDEA
 The IKEA Company can also use furniture cabling
 The company can also invest in the modular system
where each of the products is highly designed with
flexibility so that it can be ride opened.
 Ride open style of furniture are those technology
enabled furniture that operate on the concepts of
the customers (Miller, 2015)
 The IKEA Company can also develop partnership
with companies or an IT expert that can be the head
of project of installing technology enabled devices
into the furniture so that they become smart.

BUSINESS MODEL
DESCRIPTIONSKey
partner
s
•Free
lancers
•App
store
and
play
store
compan
y
•Govern
ment
and It
depart
ment
Key
activities
Installati
on
App
develop
ment
Online
communi
cation
Customer
value
propositi
on
Creating
new
value for
customer
s rather
than the
usual
unsmart
designs
Relationsh
ips
IT
manager
App store
loyalty
manager
Custom
er
segmen
t
Increase
d
interacti
on
Service
for
every
demand
Perfect
smart
furnitur
e
Cost structure
Online marketing
Fermium mobile app
strategy and
development
Revenue streams
•Application
advertisements
•Direct sales
•Application upgrade
•Online streaming

Value proposition development and delivery
GAIN
CREATORS
• . Additional
service to the
customers
• Increase of
brand value
• increase for
stalk holder
marketing
GAINS
• Enhanced
online
shopping
• Encouraged
target market
• Ensured.
• Value for
money for each
furniture
• Increased
interaction with
furniture
experts
RISK
• Invation
from
potential
competitirs
• Internet
failures
Product &
service

Financial value
 The 2.5% increase and 8.0% drop is
evidence enough that the permanent
development of smart furniture will lead
to perfect furniture development.
 The introduction of the IKEA online
mobile app will potentially generate 50
000 thousand dollars (Ngai & Falkheimer,
2017).

Strategic fit
 Every individual including those both at
home and in the offices are able to get
smart furniture like they have ever
wanted.
 The price is also affordable to all these
individuals since the app is awarded to all
the clients and customers freely at the
time they acquire any furniture from IKEA
(Larsson, 2016)

SUMMARY OF THE REPORT
 IKEA is one of the best enterprises in the world. According to
statistics it has an overall 300 retail stores across 35 countries that
was by the year 2013 (Mendibil, Rudberg, Baines & Errasti, 2016).
 Smart furniture is one that can be controlled by apps or remote
control to be used in smart houses and smart offices.
 The business plan proposal and report above therefore derives a
developed app manager that can be used for this specific purpose.
 The IKAE app will have the ability to control a client’s furniture
while also providing a communication portal of the company to the
same client. The app will provide a solution to the customer
problem of apps

REFERENCES
 Giunta, V. (2016). IKEA in China: A “Glocal” Marketing Strategy. In Market Entry in China (pp. 73-
93). Springer, Cham.
 Ito, H., Alelweet, N., Harrison, R., Mitchell, A., & Parker, E. (2015). Should IKEA Expand into Brazil:
A Study of Brazilian Consumer Behaviours. International Journal of Economics and Financial
Issues, 5(1), 69-74.
 Jin-Yuan, Y. U. A. N., Miao, W. A. N. G., & Xiao-Ming, Y. U. A. N. (2016). Analysis for Cost Leadership
Strategy and Core Competitiveness Points of IKEA CO. DEStech Transactions on Economics,
Business and Management, (iceme-ebm).
 Larsson, J., & Gadde, J. (2016). Modularity and its Effects on Operations and Logistics-A Case
Study at IKEA Industry.
 Larsson, R. G. (2016). Ikea's Almost Fabless Global Supply Chain—A Rightsourcing Strategy for
Profit, Planet, and People. In Lean Management Of Global Supply Chain (pp. 65-82).
 Marazzi, C. (2015). Money and financial capital. Theory, Culture & Society, 32(7-8), 39-50.
 McNamara, T., & Descubes, I. (2016). Can IKEA adapt its service experience to India?. Emerald
Emerging Markets Case Studies, 6(1), 1-14.
 Mendibil, K., Rudberg, M., Baines, T., & Errasti, A. (2016). Operations Strategy and
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 Miller, M. (2015). The internet of things: How smart TVs, smart cars, smart homes, and smart
cities are changing the world. Pearson Education..
 Ngai, S. B. C., & Falkheimer, J. (2017). How IKEA turned a crisis into an opportunity. Public
Relations Review, 43(1), 246-248.
 Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2017). Human resource management:
Gaining a competitive advantage. New York, NY: McGraw-Hill Education (pp. 53-57).
 Sung, K., & Samuel, A. (2014, June). Mobile application development classes for the mobile era.
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