IKEA: INDUSTRIAL VISIT REPORT

8/18/2019 IKEA: INDUSTRIAL VISIT REPORT

1/13

For Assignment or Dissertation Help, PleaseContact:

Muhammad Sajid Saeed

+44 141 44!1"#$mail:todrsaeed%gmail&com

S'(pe )D: tosajidsaeed

)*$A: )DS-.)A/ 0)S)-.$P.-

mailto:[email protected]:[email protected]


2/13


3/13

-a2le o3 ContentsIKEA INDUSTRIAL VISIT REPORT.............................................................................3

Executive Summary............................................................................................3

Introduction to te !om"any..............................................................................3

Vi#it O$%ective#...................................................................................................&

'inance and (ana)ement Accountin) o* IKEA....................................................&

!ontro+ Sy#tem#..............................................................................................&

Re,ard Sy#tem................................................................................................-

!u+tura+ #y#tem............................................................................................... -

Tecno+o)ica+ Sy#tem......................................................................................

(ar/etin) #trate)ie#........................................................................................

!ritica+ ana+y#i# *or IKEA.....................................................................................0

(ana)ement................................................................................................... 0

Ri#in) "rice#.................................................................................................... 0

Do,n#i1in) $y IKEA.........................................................................................0

Lo,2co#t Product#............................................................................................0

Environmenta+ i##ue#...................................................................................... 0

!onc+u#ion..........................................................................................................

Re*erence#...........................................................................................................45


4/13

)*$A )DS-.)A/ 0)S)- .$P.-

$ecuti5e Summar(IKEA i# con#idered to $e one te to"2notc *urni#in) $rand# te ,or+d.

Te need *or mana)ement contro+ ari#e# *or te com"anie# tat ave i)rate o* )ro,t and va+ue cain and IKEA i# inc+uded amon) tem. Tecurrent indu#tria+ vi#it re"ort *ocu#e# u"on introducin) IKEA ,it it#$ac/)round and it# current mana)ement contro+ in Saudi Ara$ia. Itde#cri$e# te mana)ement contro+ #y#tem# tat are u#ed $y te Saudimana)er# *or directin) em"+oyee#6 $eaviour and #ati#*yin) cu#tomer#6need#. A+tou) it i# a ,e++ re"uted com"any $ut #ti++ #ome i##ue# need#to $e addre##ed *or maintainin) te #trate)ic "o#ition in te current

a))re##ive mar/et.

)ntroduction to the Compan(7ead8uartered in Leiden9 Neter+and# In)var Kam"rad e#ta$+i#ed IKEAdurin) 4:3 in Sma+and9 S,eden. Te com"any6# name i# a #ort *orm *or)n)var * am"rad $+mtaryd A)unnaryd ;+e ,a# +o, a# it covered +o,2co#titem#. 7o,ever durin) 4:0 it introduced *urniture "roduct# into temar/et tat ,ere manu*actured $y te +oca+ manu*acturer# ;Edvard##on9

?55?=. Ti# +ine o* "roduct initiated a "o#itive re#"on#e and *eed$ac/ *romte cu#tomer#. @radua++y te com"any ex"anded it# ori1on# o* *urnituremanu*acturin). In te +ate 4&56# te >r#t IKEA #tore ,a# o"ened atA+mu+t ,ic ex"anded *rom -&55 to -55 #8uare meter# de"ictin) te+ar)e#t *urniture retai+ area in Scandinavia. Durin) te +ater year# o* 456# and 4056# te IKEA ex"anded it# ,in)# acro## #evera+ countrie#inc+udin) United Kin)dom9 USA9 @ermany9 Ita+y9 'rance9 7o++and9 Au#tria9!anada and Au#tra+ia ;city and i# con#idered to $e one o* te +ar)e#t ,ood con#umer a# it u#e# 4C o* tota+ eart6# ,ood #u""+y. Tetota+ revenue *or ?54? ,a# ?.-3


5/13

Te tota+ ratio *or turnover9 "urca#in) and num$er o* em"+oyee# ,itre#"ect to re)ion can $e #o,n a# *o++o,#

Figure 1 Te tota+ ratio *or turnover9 "urca#in) and num$er o* em"+oyee# ,it re#"ect to re)ion ;Arnar#on9 ?543=


6/13

In Saudi Ara$ IKEA ,a# e#ta$+i#ed in 403 at Bedda ,it te >r#t #torecom"ri#in) o* &55 #8m. It ,a# an ex"eriment to o$#erve te mar/et o* Saudi Ara$ and a*ter t,o #ucce##*u+ year# it en+ar)ed it# retai+ #tore# a++over te (idd+e Ea#t ;A+@amdi9 ?544=. 7o,ever te *ame o* IKEA ,a#,ea/ a# it ,a# diFcu+t *or te o,ner to +ocate a #o""in) ma++ tat cou+d

rent out a u)e area to an un/no,n com"any. it te u)e demand *orit# "roduct# it o"ened it# out+et# in Riyad com"ri#in) o* ?09555 #8m. Te#tore# are o"erated $y @a##an Amed A+ Su+aiman ,ic i# con#idered to$e+on) to a ,e++ re"uted tradin) *ami+y o* rea+ e#tate and retai+in)#. Ti++no, IKEA a# it# out+et# in Bedda9 Riyad and Daran.

0isit 2jecti5es Te $a#ic o$%ective *or vi#itin) IKEA ,a# to o$#erve te deve+o"menta+#trate)y tat ,a# e#ta$+i#ed in 4 con#i#tin) o* ten "oint#. I ,anted to#urvey te im"+ementation o* to#e ten "oint# at an or)ani#ationa+ +eve+.

Te ten "oint are /no,n a# ten %o$# and are a mixture o* tecno+o)ica+9

economic and #ocia+ activitie# inc+udin) deve+o"in) and introducin)centra+ and vita+ +ine# o* "roduct#9 oGerin) exce"tiona+ #a+e# *or tecu#tomer#9 im"rovin) te communication +eve+ ,it cu#tomer# and$rid)in) te communa+2)a"9 reduction o* "urca#e "rice# and im"rovin)te 8ua+ity o* "roduct#9 )ivin) out +o)i#tic eFciency9 create a centre o* attention *or te "eo"+e9 $e one IKEA9 $ecomin) #im"+e and *a#ter *or"rovidin) #ervice#9 ta/in)2on *u++ re#"on#i$i+itie# *or te #u""+ier#9co++ea)ue# and environment and >na++y maintainin) te #tron) cu+ture o* IKEA. 7ence I ,anted to monitor tat o, IKEA a# mana)ed it# 8ua+ityand "rice +adder *or com"etin) a)ain#t it# com"etitor# and #ati#*yin) te

cu#tomer#6 need#. !on#e8uent+y I ,anted to #ee te Htin/in)2tan/ o* IKEA.

Finance and Management Accounting o3 )*$AIKEA i# inc+uded amon) one o* te #u"er+ative retai+ $rand# in te ,or+d*or it# $road ran)e o* *urni#in) "roduct# tat every "er#on can aGord. Iti# te trademar/ o* a Jouri#in) )+o$a+i#ation com"any tat a# teca"a$i+ity o* cro##in) $order# ,itin a #ort "eriod o* time ; Edvard##on9?55?=. 7o,ever in Saudi Ara$ it a# *aced ca++en)e# *or +an)ua)e9"roce##in) and o"eratin) #y#tem# a# variou# countrie# u#e teir o,no"eratin) and >nance #y#tem# *or data co++ection and mani"u+ation. InterIKEA Sy#tem# cance and ro+e o* tecno+o)y in accountin) and >nancia+a#"ect# *or acievin) or)ani#ationa+ o$%ective. It a# a+#o em"a#i#edu"on #tandardi#ation o* a++ accountin) "roce##e# )+o$a++y ;


7/13

an ordinary income #tatement inc+udin) tota+ #a+e# and co#t#. Tey are*urter divided into co#t cate)orie# and eac i# cate)ory a# an indexnum$er ,ic re"re#ent# te di#tinction amon) >)ure# *or #evera+ year#.7ence te nationa+ *oreca#t i# di#tri$uted and communicated amon) teretai+ #tore# and *oreca#t# are made accordin)+y at te #tore +eve+

;A+@amdi9 ?544=.

en a #tore i# re"re#ented ,it te nationa+ *oreca#t tey "ut to)eterteir o,n individua+ *oreca#t# *or co#t# and #a+e# in "ercenta)e#. I* tere i#a cance o* increment in te co#t9 te #tore a# te o"tion o* ma/in)inde"endent *oreca#t tat are $a#ed on it# o,n a##um"tion#. Durin)*oreca#t deve+o"in) #ta)e >+e# are u#ed *or te com"+ete acce## o* SO *or)eneratin) di#cu##ion#. OFcia+# o* te ,o+e mana)ement team andde"artment# ta/e te re#"on#i$i+ity o* #ettin) te *oreca#t#. Te #a+e# and


8/13

#a+ary. (ana)ement con#ider# ti# #y#tem to $e a motivationa+ *actor *orte em"+oyee# o,ever in S,eden ti# i# not te ca#e. IKEA mana)ement,or/# u"on te *eed$ac/ #y#tem *or #o,in) )ratitude. Promotion to ai)er +eve+ i# an im"ortant incentive *or a++ em"+oyee#. Tey tend toma/e individua+ "+an# *or %um"in) at a i)er +eve+ a# tey ave no c+ear

"icture a$out te "ro#"ect# o* teir career at IKEA. On te oter and IKEAma/e u#e o* interna+ recruitment #y#tem *or #ati#*yin) and encoura)in)teir em"+oyee#6 need#.

Cultural s(stem

e# a++te I#+amic cu+tura+ caracteri#tic# ;A+@amdi9 ?544=.

-a2le 1 Te com"ari#on *or *eature# o* IKEA internationa+ and Saudi

Ara$ian cu+ture ;Arnar#on9 ?543=Standard )*$A Saudi Ara2ia )*$A )nternational

Saudi Uni*orm Per#ona+i1ed uni*ormSaudi Product ran)e i# ,e#tern Product# are

con#ervativeSaudi !e+e$ration# o* S,edi#

*e#tiva+#Re#tricted to I#+amic*e#tiva+#

)*$A standard

Saudi

Se+* #ervice Partia+ #e+* #ervice

)*$A standardSaudi

U" to #tandard 8ua+ity,it +o, "rice

Premium 8ua+ity ,iti) "rice

)*$A standard

Saudi

No )ender #e"aration @ender #e"aration

)*$A standard

Saudi

Li$era+ and o"en cu+ture 'air+y o"en cu+ture

-echnological S(stem

Te uti+i#ation o* In*ormation Tecno+o)y i# e##entia+ *or $ein) #ucce##*u+

in te mar/et *or any $u#ine##. It need# to $e im"+emented at te ri)ttime and "+ace. IKEA a# oGered te #ervice# to te cu#tomer# trou)


9/13

te u#a)e o* IT ;Edvard##on9 ?55?=. It a# em"+oyed R'ID or Radio're8uency Identi>cation metod *or #torin) and retrievin) data trou)te antenna and tran#"onder ,ic o"erate# trou) #evera+ domain# o* *re8uencie#. !u#tomer# are in need to +oo/ *or correct "roduct# *rom te,areou#e#. 'or avoidin) *ru#tration ti# tecno+o)y come# into e+". It

a# decrea#ed te co#t o* o"eration# trou) +a$e++in)9 reduction o* inventory9 +a$e++in) and cec/ out "roce##e#. 'urtermore on+ine retai+#tore# a+#o "rovide an ea#e *or #e++in) and $uyin) o""ortunitie# trou)mo$i+e "ayment# tat come# ,it )i*t voucer#. Te a,arene## o* IKEA on#ocia+ media a# encoura)ed Saudi ,omen to ex"+ore te "roduct# indetai+. (oreover te ,e$#ite traFc can a+#o e+" IKEA *or temar/eta$i+ity *actor. Te ne, and *ree a"" e+"# "eo"+e ,it virtua+"+acement o* *urniture *rom it# cata+o)ue in a room. Ti# )ive# a c+ear"icture *or "eo"+e to >)ure out te co+our9 #i1e and #ty+e o* "roduct "riorto "urca#e ;7/an##on9 ?55?=.

Mar'eting strategiesIn Saudi Ara$ia IKEA $rin) into "+ay numerou# mar/etin) communicationtoo+# inc+udin) cata+o)ue#9 ,e$#ite#9 in #tore adverti#ement# trou)"rovidin) in*ormation o* "roduct#. Te com"any and# out door to doorcata+o)ue# to reac out to cu#tomer# in Ara$ic a# ,e++ a# in En)+i# *or*orei)n "eo"+e ;Edvard##on9 ?55-=. In #tore# it can $e diFcu+t to >nd outcata+o)ue# due to Ara$ic ,ritin) #y#tem. Durin) te di#tri$ution o* cata+o)ue# once te cu#tomer# ave "aid *or teir "urca#e# te ca#ierta/e# in addre## o* te cu#tomer. Ti# i# *ed to te #o*t,are ,ic )ive#out te di#trict num$er and te re#idin) "+ace o* te cu#tomer can $e/no,n. Te tar)et mar/et *or IKEA i# te ,o+e *ami+y inc+udin) te,omen and "rovide# outdoor adverti#ement#. Tey mar/et teir "roduct#trou) ne,#"a"er# and ma)a1ine# *or reacin) out to ,omen. Due tomoderni#ation o* tecno+o)ica+ a#"ect# mo$i+e a""# are $ein) introduced*or te cu#tomer#6 ea#e. !on#e8uent+y IKEA *o++o,# #ocia+9 mora+ andcu+tura+ a#"ect# ;Kearney9 ?55-=.

Critical anal(sis 3or )*$A

Management

Te mana)er# at IKEA are trained $y te *ounder. 7o,ever in te a$#encete #are# can $e #o+d to any oter *oundation tat a# te #imi+ar

o$%ective ;E++iott9 4-=. Te "ro$+em ari#e# ,it te ex"an#ion o* IKEAtere can $e a ri#/ o* minimi#ation o* cor"orate cu+ture.Provided tat te *ounder a# te ave "o,er over mana)ement andre#"ective mana)ement i# devoted to,ard# te *ounder i##ue# may notexi#t. 7ence ti# can $e critica+ i##ue *or IKEA. In addition te exceedin)+ycom"etitive mar/et $rin)# IKEA into te "ro$+em o* #o+vin) i##ue# ,it#ta/eo+der# and #u""+ier#. Ti# can +o,er te +eve+ o* mar/et va+ue. SaudiAra$6# IKEA *ace# a communication )a" ,it te ,or+d,ide #ta/eo+der#due to te diver#i>cation o* cu+tura+ a#"ect#. 7ence +ar)e amount# o* $u#ine## o"eration# can $e indered due to ti# i##ue ; Bon##on9 ?55=.


10/13

.ising prices

IKEA a# a+,ay# aimed i) *or )ivin) te cu#tomer# te $e#t "roduct#tat #tand# out *rom te oter contender# in te mar/et. Te main aim i#to $+end out need# and *a#iona$+y de#i)ned *urniture *or en#urin) teavai+a$i+ity o* modern ou#eo+d )ood# ,it aGorda$+e ran)e. On te

oter and te "rice# o* ra, materia+# are increa#in) in addition to tetran#"ortation co#t#. Ti# in return a# increa#ed te co#t o* "roduct# *orte cu#tomer#. Riva+# o* IKEA are ex"andin) teir $u#ine##e# in ome*urni#in)# *o++o,in) te #imi+ar a""roac *or +o, "ricin). Ti# a#"re#ented IKEA ,it a ca++en)e to maintain it# *ame in Saudi mar/etcom"romi#in) te #tandard# ;Star/9 ?55=.

Do6nsi7ing 2( )*$A

In te current ca++en)in) tradin) condition# IKEA do,n#i1ed it#or)ani#ationa+ #tructure in Saudi Ara$ia *or maintainin) te +ine o* "roductivity and eFciency. Numerou# mana)eria+ "o#t# ,ere +i#ted do,n

cau#in) "eo"+e to #uGer. Ti# i# te rea#on tat IKEA i# not ex"andin) to)reater extend in Saudi Ara$ia a# te main mana)ement a# rea+i#ed tatex"an#ion need# to #+o, do,n. Due to can)in) environment o* te"+annin) and mana)eria+ team te >rm i# +o#in) it# "ro>t#. Additiona++ytere i# a communication )a" $et,een mana)er and em"+oyee a# mo#t o* te mana)eria+ "o#t# $e+on)# to Saudi nationa+# ;Kearney9 ?55-=.

/o68cost Products

Te demand *or +o, co#t "roduct# *rom te cu#tomer# i# "uttin) IKEA at adiFcu+t "o#ition. Te "ricin) #trate)y tar)et# te cu#tomer# ,it +e## and+imited >nancia+ re#ource# and a# a re#u+t co#t need# to $e $a+anced.

Saudi# are "rone to +uxuriou# item# a# ,e++ ence i* tey >nd any treattey tend to can)e teir "roduct +ine. IKEA need# to *ocu# u"on oGerin)i) 8ua+ity ,it +o, "rice#. In addition te "o#t2rece##ion era a#decrea#ed te "urca#in) "o,er o* cu#tomer#. IKEA can ta/e advanta)e*or e+"in) out te cu#tomer# in tou) >nancia+ time# ;Edvard##on9 ?55-=.

$n5ironmental issues

IKEA at Saudi Ara$ia i# i)+y aimed at dro""in) do,n te car$onemi##ion to "rotect te atmo#"eric "ro$+em#. It i# tryin) to acieve te1ero ,a#ta)e tar)et# tat can attract te #ta/eo+der# and #u""+ier# andence im"rove te re+ation#i". Ti# can "rovide #ur"+u# o""ortunitie# to

IKEA *or re#o+vin) te ener)y cri#i# i##ue re#u+tin) in $u#ine###u#taina$i+ity and #tru))+e to )ain i)er "ro>t# ;K+in)9 ?553=.

ConclusionIKEA a# a #tron) o+d o* cor"orate cu+ture in Saudi Ara$ia. it te"a##a)e o* time it i# #"readin) te ma##a)e o* co#t con#ciou#ne## amon)te cu#tomer#. Em"+oyee# are a+#o $ene>ttin) *rom te *rame,or/ o* e8ua+ity to enance te direction# o* $u#ine##. Tey are more concerneda$out te contro++in) #y#tem# o* te com"any inc+udin) te $ud)et9"+annin) o* >nancia+ #y#tem# *or acievin) #ati#*actory re#u+t#. No dou$ttere i# a cu+ture diGerence $ut IKEA i# #trivin) ard to >t2in te mar/et

and o$tainin) +ar)e mar/et #are. Te accountin) #y#tem# ado"ted arei)+y inJuentia+ tat are e+"in) in retainin) te >rm6# #trate)ic va+ue.


11/13

(oreover te mea#urement #y#tem# are a+#o #"eci>c and detai+ed ,icena$+e te em"+oyee# to react ,itin #ort "eriod and ta/e action#accordin)+y. IKEA a# *ound o"eration# tat are co#t eFcient and i)turnover ,ic ena$+e te mana)er# to com"are teir mar/et"er*ormance. Te "+annin) "roce## i# a+#o u" to te mar/ a# tey *ocu#

attention to te "ro$+em area# and de"end u"on te #taG to ,or/ out te"ro$+em# $y ,or/in) out te action "+an# trou) a "o#itive a""roac.A+tou) ,it a++ te "o#itive a#"ect# IKEA #ti++ need# to *ocu# u"on teu"comin) ca++en)e# in te near *uture.

.e3erences


12/13

A+@amdi9 R.9 Dre,9 S.9 M A+'ara%9 O. ;?544=. I##ue# inJuencin) Saudi cu#tomer#6deci#ion# to "urca#e *rom on+ine retai+er# in te KSA a 8ua+itative ana+y#i#.European Journal of Scientic Research9 55;:=9 &052&3.

Arnar#on9 K. R.9 !ri#toGer#en9 (. $re ?*a#ion. comindu#try2artic+e"dF+e#emer)in)2mar/et2"rioritie#2*or2)+o$a+retai+er#. "d*.

K+in)9 K.9 M @oteman9 I. ;?553=. IKEA !EO Ander# Da+vi) on internationa+ )ro,tand IKEA# uni8ue cor"orate cu+ture and $rand identity. ,he Acade!( of&anage!ent E/ecuti"e9 )0;4=9 "" 3423.

Norton9 (.9 (ocon9 D.9 M Arie+y9 D. ;?544=. TeIKEA EGect en La$or Lead#

to Love. 1ar"ard Business School &ar2eting 3nit 4or2ing .aper 9 ;44254=.


13/13

(a)$oo+9 S. S. ;?55=. orporate En"iron!ental &anage!ent of .ri"ateBusinesses in Saudi Arabia ;Doctora+ di##ertation9 Univer#ity o* 7udder#>e+d=.

Sa+1er9 (. ;4:=. Identit( across borders: a stud( in the IKEA6#orld ;Doctora+di##ertation9 Lin/Q"in)=.

Star/9 A. A. S. K. (. ;?55=.

IKEA: INDUSTRIAL VISIT REPORT

Documents

Transcript of IKEA: INDUSTRIAL VISIT REPORT