Product and Service Development (Unit 22) Report: IKEA Analysis

This report provides a detailed analysis of product and service development, focusing on the case of IKEA. It begins by explaining the processes involved in product and service development, including customer integration strategies, and applies these processes to IKEA's product development, particularly in launching new products like electric chimneys and automatic microwaves. The report then assesses the product lifecycle stages of IKEA's products and evaluates appropriate product line management choices. It includes a pitch for a new product service, considering market testing, product launch, and distribution. Finally, the report concludes with a reflective statement on team working, creative development, and presentation, offering insights into IKEA's approach to product innovation and market strategies. The report covers various aspects of product development, from identifying market needs to building product roadmaps and releasing minimum viable products. It also highlights the importance of customer feedback and continuous iteration in the development process.

Product and Service
Development (Unit 22)

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................2
TASK 1............................................................................................................................................2
P1 Explain processes involved in development of products and services and levels of
customer integration....................................................................................................................2
P2 Apply processes in application to development of Ikea's product or service.......................5
TASK 2............................................................................................................................................7
P3 Assessment of life cycle stage of products or services in a portfolio of company.............7
P4 Evaluate which appropriate product line management choices are required for individual
products or services. ...................................................................................................................9
TASK 3..........................................................................................................................................10
P5 Design and pitch a producer service taking in to account market testing, product or service
launch and distribution..............................................................................................................10
TASK 4..........................................................................................................................................12
P6 Complete a reflective statement that critically reflects on team working, creative
development and presentation...................................................................................................12
Reflection .................................................................................................................................12
CONCLUSION .............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Product development is defined to all stages that are involved in bringing a product from
concept or idea by having market release and its beyond. In general words products development
operates a product's entire journey. It is a complete process of delivering a new product or
enhancing an existing and present products for customers(Bustinza, and et. al. 2019). Customers
could be external or internal in companies. Product development generally supports various
types of products from software to hardware to consumer goods and services. A accurate product
development provides companies a method to explore new products ideas and learn what
customers is required in early stages of conceptualisation(Smith, Sochor and Karlsson, 2018) .
While service development is defined as an end to end method of developing and launching a
new service to be sell to to customers. It basically consists markets service strategy, customer
experience, marketing, operations, market research and having launch of new services. This
report is based on product and service development in Ikea, which is a Swedish multinational
conglomerate company which designs and sells ready to assemble furniture, home appliances
and home accessories in other useful products as well as occasionally home services. It is
considered as a world's largest furniture retailer company. This report includes process involved
in enhancement of products and services, processes in application to development of product or
services, assessment of product life cycle, evaluation of product line management, pitch for
product and service testing, reflection along with its conclusion.
IKEA 's portfolio
Products Examples
Furniture Table desks, chairs and stools
Cookware Kitchen utensils, crockery, tableware
Bath ware Bathroom shower, wash basin, bathroom fittings
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MAIN BODY
TASK 1
P1 Explain processes involved in development of products and services and levels of
customer integration.
Illustration 1: Illustration 1
Product development process is defined as an encompasses of all steps and procedures
that are needed take a product from topic to market availability(Cooper, 2019) . Product
development process includes determining and identification of a market requirement,
researching competitive landscape, conceptualising a solution, enhancing a product roadmap,
building a less viable product etc. in terms of Ikea, company is having a new product
development in launching new kitchen appliances like automatic electric chimneys and
automatic microwaves in their company. As customers are now mostly preferring products and
services that provides them comfortability and ease(New product development,2021) . So
according to required demand and fulfil needs of customers. Ikea could launch electric chimneys
and automatic microwaves. For introducing new product and service of company in markets it is
important to carry various steps like idea generation in which idea of product is determined in
mind of company, idea screening in which idea of launching microwave is screened and
analysed, then concept development in carried in which concept of microwave is tested in
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markets then various marketing strategy is used to promote company's microwave and electric
chimneys along with business analysis in market then product enters into market by test
marketing and commercialisation of microwaves and chimneys. And for carrying this product
development process in company could be carried as follows: Identifying a market need: This stage of product development process involves
identification and determination of a problem which is required to solved(Rennpferdt,
and Krause, 2020). It could be carried by having conversations through potential
consumers, surveys and various other users research activities that could inform and
analyse this need. In terms of Ikea, company could identify market's needs by having
conversation and analysing markets. And analyse that there is need of automatic
microwave and electric chimneys or not. Are there any competitors available in markets
which supports microwaves. Quantifying opportunity: As not each problem is difficult to warrant to product based
solution(Hernández, Kreye and Pigosso, 2018). As it causes and number of individual or
company that impacts and analyse whether it is worthy problem to solve and if customers
are willing to pay for a solution. Ikea, quantifies opportunities by examining and
analysing requirement of problem which needs to be solved first. In this stage there is
quantifying opportunities in which market needs and demands are analysed and examine
that new product will succeed in market or not. Conceptualising product: As some solutions may be obvious and while others may be
less intuitive and then company puts their efforts and applies their creativity to devising
how to product that might serve its needs. In terms of Ikea, company is designing and
creating and designing in their existing products of their company. In this stage company
examines its product which is microwave and electric chimneys that they are
conceptualised in markets. Validating solution: In this phase of product development process helps in having
providing solutions that are viable to be tested (Haber, Fargnoli, and Sakao, 2020) . This
stage could be carried at its conceptual level. In terms of Ikea company could test
relevancy of product and services that they are going to offer and could examine that
whether idea of new product development is worth pursuing it or not. In Ikea, company
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identifies that microwaves and electric chimneys will be able to complete customer's
needs or not and they are able to satisfy needs and wants of customers. Building a product roadmap: By having a legitimate product in mind, product
management could help in building out product direction, identifying that which themes
as well as motives are central to develop first to resolve main significant difficult
points(Piontek and Müller, M., 2018) . At this stage Ikea makes and designs a product
roadmap in which it could determine which activities are to taken first to carry. In this
stage company will be able to carry and design a microwave as well as electric chimneys
roadmap which says about carrying of its business activities. Designing a minimum viable product: This starting version of product requires to have a
functionality to be used by customers. In this stage of product development process
company could ensure that its provided products and services should be used by
customers. In this stage Ikea ensures that microwave and electrical chimneys are to be
provided to customers in a affordable price and rates which could fulfil company needs
and wants. Releasing MVP to users: This phase of product development process helps in releasing
minimum viable product to customers by prioritizing marketing channels and messages
by carrying testing and packaging of products. In terms Ikea, company in this phase starts
releasing its products to customer at a minimum viable source so that they can be able to
afford that products. In this stage company begins releasing its MVP to users of
microwave and electrical chimneys so that survival of innovative products could
maintained.
 Continuous iteration based on user feedback or strategic goals: By carrying up a new
product and service in markets there should be an enhancements, expansions with
various changes that will be driven by user feedback which is being gathered through
channels. In terms of Ikea, company could implement their products and services and
according to that customer's feedback will be taken according to products. In this stage
feedback from customers about availing services of microwaves and electric chimneys
are to be taken for creating and designing any change to customers.
In product development process integrating customers could be taken into a innovation
processes which is a gaining popularity to develop and design new products and
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services(Flikkema, and et. al. 2019). As this analysis helps in contributing to theory by
identifying, determining and classifying customer integration methods that allows researchers
to design an IT based decision tool.
Ikea's product line:
Illustration 2: product line chart
(Source: Retail marketing. 2021)
P2 Apply processes in application to development of Ikea's product or service.
There are some of applications to product development process states its categories and
methods by which products and services of company are entered in markets. As product could be
defined as an entity which is brought to markets for grabbing acquisition, use or consumption
attention that meets and fulfils needs of customers. As to make a new product development
effective there should be a coordination among manufacturing, research and development,
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marketing, finance, engineering and purchasing departments. There are some of applications
that are involved in process development in relation with Ikea that are as follows:
Illustration 3: automatic microwave
Illustration 4: electric chimney
 Major innovations: It is essential to have innovations in products and services which are
provided to customers. As it has designed by new technological enhancements and
provide new experiences to customers. Product improvements: Product development process which is carried in markets to
serve to customers should also focus on developing and enhancing quality of products
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and services. It should be taken in markets in order to create a new market. Company
generally target customers of competitors in markets (Mourtzis, D. and et. al. 2018) . Product additions: There are various limitations of products that uses market designed by
producers of original products. As these products could claim new characteristics
benefits that will be limited. Repositioned of products: These products are promoted in a newly way that attract
various kinds of customers. Repositioned products are not new products with no new
formulations and no new features they are positioned in a different method in markets
for attracting various groups of customers.
 Technological breakthroughs: This collection of new products is one kind of products
like anticancer and other vaccines or new techno logic products such as automatic
microwaves.
TASK 2
P3 Assessment of life cycle stage of products or services in a portfolio of company.
Illustration 5: illustration 2
Text 1: product life cycle
Product life cycle ids defined as an amount of time a product that goes for m being
introduced in markets until it is taken off in markets(Product life cycle,2013). There are basically
four stages of product life cycle. In terms of Ikea and its new product development product life
cycle and its stages are as follows:
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 Introduction stage: This stage of product life cycle is referred as a starting stage of
product life cycle that involves expenses to launch a new product of company in
corporate markets. In this stage size of markets is small, that states sales of product will
be low and they will be increasing(Francisco, Junior and Sant’Anna, 2020) . There will
be cost that occurs in launching new products in markets. Main motive of introduction
stage in product life cycle is to launch new product and cover cost of investments. In
terms of Ikea, company can launch its electric chimneys and automatic microwaves in
markets by using various modes of advertisements like print media, television and social
media. Growth stage: This stage of product life cycle is featured by a strong growth in sales and
profits. As in this stages company start making profits from its newly launched products
and services. Company can reach to economies of scale in production, profit margins and
as well as overall amount of profits. At this stage of product life cycle company can
invest more money on its products and services in order to gain more profits. In terms of
Ikea, company at this stage could start making its profits. At this stage company could
invest more money in providing more features in their products to gain more profits. In
this stage of product life cycle microwaves and electrical chimney's main motive is to
covers expenses and returns. In Ikea, it product of kitchen appliances of electric chimneys
comes under growth stage of company in markets. As company could take their product
for having innovation in terms of providing various electronically ventilation facility in
kitchen that could help customers in providing comfortable working. Maturity stage: This stage of product life cycle states that product is established and
motive of manufacturer is to maintain as well as keep a market share they have built up.
This stage is probably most competitive time for company's products and company
requires to invest smartly in every marketing that they undertake. In terms of Ikea,
company at this stage keep their products in markets to gain profits for them and invest
money in products wisely in order to avoid losses (Appelgren and Lindén, 2020). This
stages are referred to be matured stage of product life cycle. In Ikea of automatic
microwaves comes under maturity stage of company in product development. As this
provides varieties of new products development process that could access by customers
in an easy way.
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 Decline stage: This stage of product life cycle states that product will starts declining
form markets. This declining of product in markets could be carried due to market
becoming saturated or because of customers are switching to a different type of product.
As this stage of product life cycle could be inevitable, and it may be still possible for
companies to make some profits by switching to less expensive production methods and
cheaper markets. In term of Ikea, at declining stage of product life cycle company's
product starts moving out from markets as they are turning to out from markets and
customers starts shifting towards others products. In this stage of product life cycle Ikea's
product automatic microwaves and electrical chimneys makes as much profits as they
could and make changes in their products if needed in order to survive in markets. Along
with that Product like bookcases & shelving units, storage solution, TV & media
furniture comes under declining stage of company.
P4 Evaluate which appropriate product lineunit management choices are required for
individual products or services.
It has been evaluated and analysed that Product line management is defined as an
company's scheme and alternatives management system in focusing in programmatic model of
operations in order to accomplish specific objectives of company. There are various product line
management choices that are required for individual products and services to promote them in
corporate markets. In terms of Ikea, company can take use of various product line management
in order to promote their products and services (Rivas, Chen and Yang, 2020). There are certain
points that are to be taken care while carrying product line management that are as follows:
 There should be a clarity in terms of sales and marketing strategy in markets as it is
imperative for marketing and sales to articulate an integrated approach which clearly
determines product portfolio. As creating this clarity beyond walls of marketing and sales
that is desirable or should be specifically made clear to manufacturing. As manufacturing
should be carried and proactive in understanding sales and marketing strategy. As in
terms of Ikea, company should provide clear assistance in terms of promoting their
products as well as services for generating revenues by using integrated approach for
their new product which is electric chimneys and automatic microwaves.
 There should be an understanding of how sales and marketing strategy is converted to
units. As there are various strategies that state and leave it at high level of planning as
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well as scheduling to derive a production mix without collaboration or cross functional
review that are common. Company should be able to convert forecasted revenue to a
viable production mix in a specific manner which uses input of all stakeholders. In terms
of Ikea, company should use various effective strategies in their product planning for
converting their production mix for carrying out reviews.
 To take action and implement results as company starts product line analysis and develop
their own approach to pruning various portfolio. As in Ikea company, they should take
actions as well as implement different product line in markets with innovation as well as
creativity.
 It determines and analysis various marketing strategies to offer substitutions alternatives
to customers which are implementing or have used an eliminated product (Syed, Blome
and Papadopoulos, 2020). In terms of Ikea, company should examine various other
products offerings as a competition and according to that make according changes in their
products.
 It identifies opportunities for reprice products which do not have alternatives to lower
produced unit costs. In terms of Ikea, company is recommended to determine present
opportunities on regular basis for repricing of products for reducing its units costs for
their provided products.
 Ikea is recommended to consider as well as its offering for discounted options for pooling
similar products to extend order quantities and take advantages of resources synergies
and purchasing economies.
 To investigate approaches to enhance production quality and capability. There are line
and equipments enhancements, focused set up reduction, leaning out critical processes
and eliminating that has a bit of process variance through applying six sigma in
company's operations management. Ikea is recommended to determine various
approaches on timely basis so that their quality as well as potentiality could be
maintained on regular basis.
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