LO 2: Be able to support creative and innovative management processes for an organisation

Case Study
IKEA
IKEA was founded by Ingvar Kamprad in 1943 in Sweden, and the four letters of the
company name were formed by combining the owners name Ingvar Kamprad with
Elmtaryd, the farm, and Agunnaryd, the village, where he grew up. At the beginning, IKEA sold
pens, wallets, picture frames, table runners, watches, jewellery as well as stockings to meet
the customers needs by offering reduced prices. The company started selling furniture in
1948, which were produced by the local companies, and then expanded its product line
after receiving positive feedback from the customers.
A significant moment in the growth of the IKEA concept was the introduction of their
first furniture showroom in 1953 in lmahult, Sweden. A price war between IKEA and its
major competitor had taken place; so at this point, the company opened the showroom to take
over the competition. This innovative idea of the showroom provided a chance to IKEA to prove
that its low-price products have the features of functionality and quality. The main reason
behind this was that the customers could actually see and touch IKEA products for the first time
before ordering them and to choose the products offering the best value for money.
To achieve more growth and to enter new markets, IKEA opened stores in big markets such as
the USA, Italy, France, UK and Belgium in 1980s The company introduced its new customer
club card called IKEA FAMILY in 1984. Todays modern IKEA started its formation
during this time.
During 1990s, IKEA became larger by introducing IKEAs children product line to the market.
The companys focus was to provide furnishing solutions for families with children to meet their
needs accordingly. Furthermore, IKEA Group was also created at this time. In 1990, the
company introduced its first environmental policy and realized that doing good business was
made possible by taking social and environmental responsibility into account. In 1991,
IKEA began cooperating with Greenpeace organization.
In 2001, IKEA was one of the manufacturers which took the initiative to introduce the
print-on-board technique to make furniture with patterns shaped directly on fiberboard and
particleboard. In 2002, in order to reduce waste and to repair the returned products in more than
100 stores in Europe, the company implemented a product-recovery idea. In the same year, the
company started cooperating with WWF to deal with matters related to forestry worldwide, and
the result was the start-off of some forest projects both regionally and globally. This was to
support the responsible forestry growth.
In 2010, IKEA had 1,074 home furnishing suppliers (including Swedwood and Swedspan that
are part of IKEA Group) that operated in 55 countries worldwide. The number of IKEA
transport service providers was 251 (excluding Customer Delivery vehicles). The company had
90 food suppliers globally and 39 catalogue suppliers.
Today, IKEA is the largest home furnishing company in the world that has wide variety
of products from toys to plants to furniture, needed to furnish customers home and the
whole kitchen. At the end of fiscal year 2010, IKEA had operations in 41 countries, 29 trading
service offices in 25 countries, 27 distribution centers and 11 customer distribution centers
in 16 countries, 280 stores in 26 countries (as of August 31, 2010) as well as 127,000 co-workers
globally. IKEA vision is to create a better everyday life for the many people. And the IKEA

business idea is to offer a wide range of well-designed, functional home furnishing products at
prices so low that as many people as possible will be able to afford them. However, in creating
low prices IKEA is not willing to sacrifice its principles. Low price but not at any price is what
IKEA says. This means it wants its business to be sustainable. IKEA supplies goods and services
to individuals in a way that has an overall beneficial effect on people and the environment.
Mikael Ohlsson, the president and CEO, states in the Sustainability Report 2010 of the
company that We believe that home is the most important place in the world. We offer
affordable home furnishing products and solutions, while also taking responsibility for
people and the environment. We want our customers to be able to freely choose from our
range, knowing that they do not have to choose between sustainability, style, function or price.
According to Edvardsson et al. (2006), IKEA has three core values namely price (economics),
planet (environment) and people (social perspective) which ... interact and provide direction for
brand meaning during the co-producing and co-creating learning process with customers and
other stakeholders. They explain that these core values lead to low prices, innovation,
responsibility and leadership.
Innovation at IKEA
IKEAs president and CEO, Mikael Ohlsson, emphasizes on the importance of innovation as a
tool for sustainable solutions by stating that "Innovation is needed to build sustainable
solutions into the IKEA range". In addition, IKEA relies on the companys own co-workers
for new designs and product innovation; it creates the atmosphere in the factory where
everybody feels free to share ideas and exchange information.
Furthermore, Mikael Ohlsson states that We see sustainability as a catalyst for further
innovation and change within IKEA. It will transform the way we economise with resources and
do business, for future generations and continuing success. IKEA is always about working
together customers, co-workers and suppliers.
Flat packaging: Now IKEA designs flat packs because it makes possible to load more
material on vehicles, thus save costs. By using flat packs IKEA can transport more products by
using less number of vehicles which will reduce CO2 emission.
1. Design-While most retailers use design to justify a higher price, IKEA designers work in
exactly the opposite way. Instead they use design to secure the lowest possible price. IKEA
designers design every IKEA product starting with a functional need and a price. Then they use
their vast knowledge of innovative, low-cost manufacturing processes to create functional
products, often coordinated in style. Then large volumes are purchased to push prices down even
further. Most IKEA products are also designed to be transported in flat packs and assembled at
the customer's home. This lowers the price by minimising transportation and storage costs. In
this way, the IKEA Concept uses design to ensure that IKEA products can be purchased and
enjoyed by as many people as possible.
2. Function- The many people have many needs. They live with kids. They need more storage.
They have to make the most out of a small space. So IKEA designers are always seeking new
ways to improve people's lives - without emptying their wallets. But how can good design and
function be combined with good quality, all at a low price? It starts with focusing on what's
important. Will an expensive finish on the back of a shelf or under a table-top improve the
function? Absolutely not! So IKEA designers do not do it, because a product is of no use to the
customer if it is not affordable.
3. Low Price- Low price is a prerequisite for the IKEA Concept to realise the IKEA vision - "to
create a better everyday life for the many people". As the IKEA Concept aims to serve "the many

people", the IKEA product range needs extremely low price levels. IKEA designers do their part
to keep prices low by using production capabilities from other areas in unique and previously
unimagined ways - like having shirt factory produce furniture upholstery; or, using leftover
materials from the production of one product to create an entirely new one. IKEA customers also
contribute to keeping prices low. They select and pick up the products themselves, transport
them home and then assemble them themselves. And they can enjoy them already later that day.
IKEA's goals of sustainability and environmental design are central to its business strategy. It has
launched a new sustainability plan to take the company through to 2015. This will combine
social, environmental and economic issues. IKEA uses SWOT analysis to help it reach its
objectives. This is a strategic planning tool. It helps the business to focus on key issues. SWOT is
the first stage of planning and looks at the Strengths, Weaknesses, Opportunities and Threats
involved in a project or business venture.

Task 2
Q2.1. Assess the influence of vision and mission on generation of creative and innovative
management processes in IKEA. Do the vision and mission statement aid the organization
in its innovative management processes?. (AC 2.1 assess the influence of vision and mission
on generation of creative and innovative management processes in an organization.)
A 2.1 In any leadership position, people count on the leader to set the direction and provide a
bearing for the future. In broad terms, this is usually expressed and articulated in the vision or
mission statement to serve as a guiding post for the organization. It sets the stage for the strategic
planning and objectives, and illustrates a vision that is desirable, challenging and believable.
2.1.1 The Vision & Mission
Vision - To create a better everyday life for the many people.
Mission - Offering a wide range of well-designed, functional home furnishing products at prices
so low that as many people as possible will be able to afford them
2.1.2 The impact of IKEAs vision & Mission
Product Range and Innovation:
IKEA products are known for its quality and innovation, they try to create unique products that
offer home furnishing solutions for every room in the home, making sure that these products
meet daily wants and needs of the customers.
Offering Low Prices:
Focusing on cost control, operational management and product innovation allowed them to lower
their prices by 2% or 3% over the last 10 years, keeping in mind that products are well-designed,
efficient and cost effective.
A better everyday life:
IKEA Company has taken the straightforward approach to the furniture business, by starting with
developing furniture with the price tag in mind. This is the IKEA way, to maximize the use of
raw materials in order to fulfill people's needs and preferences by offering quality products at an
affordable price. This can improve the life of the people

2.1.3 The Result

Like the founder Ingvar Kamprad said wasting resources is a mortal sin. This characterizes
the whole company itself. This way of doing things is at the heart of the IKEA approach to
keeping prices low. But quality is not compromised for the sake of cost. Hence it is apt to quote
the IKEA slogan Low price but not at any price

Reference:
Anon: Vision Of IKEA [ONLINE] [N.D] [N.P] Can be found at
http://www.ukessays.com/essays/business/factors-of-ikea.php [Accessed 1st July 2014]
Sarah Al-hammadi [n.d]:IKEA: Leadership Leads to Product Innovation and Globalization
[ONLINE] [N.P] [N.D] can be found at
http://www.academia.edu/5276306/IKEA_Leadership_Leads_to_Product_Innovation_and_Glob
alization_Human_Resource_Management [Accessed 1st July 2014]

Q2.2. What analytical tools does IKEA use to identify potential creative and innovative
management ideas?. (AC 2.2 use analytical tools to identify potential creative and
innovative management ideas.)
A2.2 Leaders should inspire employees to search for innovative ways of doing things. This refers
to lateral thinking, which is defined as a set of techniques and approaches to look for radically
new ways to approach the problems (Edward de Bono) (1970).
We analyse how IKEA identifies potential creative and innovative management ideas
2.2.1 SWOT analysis
Strengths of IKEA
A clear vision
This means that IKEA knows what they are dealing in which is furniture and only
furniture, they are on that alone and perfecting that well.
A strong global brand
Furniture is a product that is used worldwide, every home has furniture and used one way
or the other by this is global.
It has strength in production
IKEA has the use of renewable materials with a long-term partnership with suppliers
meaning that the suppliers have been there for a long time and they know what is
expected of them.
Weaknesses of IKEA
It cannot control its standard because of its size and scale and because of the high quality
of its product it doesn't commiserate with the demand for low cost product. IKEA has
few distribution channels this means that the branches are not much if a product is needed
it will have to be imported.
Opportunities of IKEA
Its opportunities come from joining its plan to the increasing demand from customers by
Providing a well designed and easy to use website to help give customers idea for their
home
Reducing wastewater treatment and less water use
Supporting charities to make it known
Sourcing from China
Sell some of their furniture in other retail stores
Threats of IKEA

In the economic factor, the customer will prefer a low priced product even if it will affect its
quality especially when the economy is tough.
No direct competition
Intertypes (Wal mart, Ashley Furniture's, Hoover)
Recession

2.2.2 PESTEL Analysis

Political factor:
This involves the regulation, legislation requirement by the government on foreign investors for
example the minimum wage policy which means that the workers are not paid anything less than
the stipulated wage to avoid cheap labor.
U.K
U.K has always been political stable and the political parties have always welcomed the foreign
owned companies. Also the taxation policies are not tough on the companies to enter the market.
At present the upcoming elections in the country will definitely show there impact in future.
China
China is a country with high centralized political system which means that they control by one
party system and an increasingly decentralized economic system.
Middle East
Middle east follows a monarch rule and hence Trade is a bit more restricted when compared to
other regions trade union. Though most of the countries follow no particular wage protection
system, IKEA standardizes their wage policy keeping in mind the inflation.
Economical factor:
IKEA has made it in such a way that their price is very reasonable for the public. This has been
of an advantage especially since IKEA products are mainly made in China.
As each country's inflation rate differs, it adjusts according to the region and hence have better
chances to grow and capture the market, which it was doing since long. Even during the
recession it managed to stay true to the quality without affecting the cost.
Social factor:
IKEA has maintained a fair social standing.
IKEA completely understands the life style of the people in each country and develop their stores
accordingly. As people have the flexible working hours and they tend to do shopping on odd
hours or say late hours looking to this normally all IKEA stores are opened till mid night. In the
Middle East they keep their stores open post midnight during the holy month of Ramadan. 5Also
stores have other facilities like children playing area and restaurants which is helping the parents
who are accompanied with their children.
Technological factor:
Technology has made it easier for IKEA to promote their product through the internet. It gives
the customer detailed information about the product, the dimensions, the price, similar products
of the same price range and different style which make it easier for the customer to know what
they are buying.

Apart from the catalogue services IKEA's strength is online service. It also provides the online
help to the customers. The latest advancement in the stores are computer operated lifts. Earlier
after placing the order customer has to go to the warehouse for the pickup of the product but now
IKEA has centralised store and warehouse. Customer has to place order and then has to put the
code of product on the computed lifts provided and thus can receive the product. This saves the
time of the customer and also the staff.

Environmental factor:
IKEA uses recyclable products which in this case it reduces waste and space consumption, the
packaging is less fancy and more environment friendly
IKEA mission is to provide products at low price but not at any price. It does the foresting for
the woods used in the furniture's and with WWF partnership it is working on projects to focus on
sustainable forestry, cotton manufacture and climate change. IKEA also does third party auditing
on the material used by its suppliers to check the compliance of raw material used. In partnership
with WWF it is also focusing on the countries like U.K, USA and China on the climatic change
and low emission of fuel energy and encourages its staff by using public transport.
Legal factor:
Countries have legal laws for foreign investors to invest in their territory and these laws have to
be abided by to invest, this makes it a bit difficult for IKEA to penetrate into some countries
despite the fact that there is good market.
The policies which are followed by IKEA are like minimum wages, no forced or bonded labour,
discrimination acts, safety regulations, health and accidental insurances, freedom of associations,
etc. IKEA prevent child labour and works actively to prevent it as well as the necessity to have a
local sponsor who shares a considerable say in their market(Middle East).
Reference:
Anon: Vision Of IKEA [ONLINE] [N.D] [N.P] Can be found at
http://www.ukessays.com/essays/business/factors-of-ikea.php [Accessed 1st July 2014]
Chinese Students [2013] : Evaluation of IKEAs strategic choices and implications [24 May
2013] [ONLINE] Can be found at
http://www.chinaabout.net/evaluation-ikeas-strategic-choices-implications/
John Dudovskiy [2012]: IKEA PEST Analysis [28 July 2012] [ONLINE] can be found at
http://research-methodology.net/ikea-pest-analysis/ [Accessed 2nd July 2014]

Q2.3. How does IKEA assess risks and benefits of creative and innovative management
ideas? (AC 3.3 assess risks and benefits of creative and innovative management ideas.)

A2.3 IKEA continues to be a pioneer in innovation and it has its benefits. However it has its risks
too. Below, we analyze the risk management involved with the Innovation & Management ideas
of IKEA.
2.3.1 Benefits
IKEA were one of the initial organizations if not the first to come up with high quality
low cost products and continues to follow the trend. Hence there is a continued trust and
market demand for the products of IKEA.
IKEA has the advantage of embracing the upscale-bargain divide as it carried the
reputation for exclusive and sleek design clubbed with consumer friendly shopping
experiences.
They have a materials sourcing strategy which focuses on finding low cost materials from
around the world and hence successfully implements the low cost strategy effectively.
Classic operation trade off of cost versus quality gives them unparalleled advantage.
Ultimately, IKEAs approach towards dealing with its suppliers involved building deep,
long-term relationships founded on trust and mutual dependency. Hence unlike WalMart, for example, who is known to bully its suppliers to hit rock bottom prices, IKEA
had an unchallenged advantage on this stance.
They have an ever improving market value as they allow franchises to run their shops .
IKEA is never stretched financially as it allows itself to establish local supply networks.
IKEA settles well-collected experience room together with wide range of well-designed
furniture and give customer opportunity to test tem freely, which beyond consumers
demand and brings more value to customers. Moreover, based on the non-hierarchy
culture, IKEA makes co-workers feel engagement, be trusted and willing to lend a
hand to each other, which makes the execution into the strategy.

2.3.2 Risks

 Due, to its insistence on low priced products, inspite of its arguably good quality, a few
customers get frustrated at its low quality.
Poor knowledge or exposure to unknown culture results in poor understanding of
consumer demographics.
Due to its ever increasing demand, IKEA has constantly runs the risk of the suppliers
keeping up with the demand.
Without high quality, low-cost suppliers on board within its ecosystem, IKEA will not be
able to offer its value proposition to customers.
Demographic factors that affect the demand of the furniture market include household
income, population growth, demographic trends, age, urbanization and income disparity
between urban and rural areas.
The generation of purchasing the furniture becomes younger and younger, thus the
demand for the design for the unique of the furniture become one of the crucial for IKEA.
Sectors where the competitive advantage is locally rooted and hard to transfer across
countries, there is a need to adopt an international strategy rather than a global one.
IKEA needs to periodically review and enhance its existing strategies to lead furniture
industry as a market driver.
Reference
Anon: In Depth study on IKEA [n.p] [n.d] [ONLINE] can be found at
http://www.ukessays.com/essays/marketing/in-depth-study-on-ikea-marketing-essay.php
[Accessed 2nd July 2014]
Anon: Analysis of Creative and Innovation Management [n.p] [n.d] [ONLINE] Can be found at
http://www.ukessays.com/essays/management/analysis-of-creative-and-innovation-managementmanagement-essay.php [Accessed 3rd July 2014]
Surya Prakash (2011) : IKEA (September 2011) [ONLINE] Can be found at
http://www.studymode.com/essays/Ikea-782745.html [Accessed 2nd July 2014]
Wallace (2013) : LASA (August 2013) [ONLINE] can be found at
http://www.studymode.com/essays/Lasa-1868578.html [Accessed 4th July 2014]
Yamini Jagannadhan, Nick Jameson, Suzanne Lieb, Rachel Moss, Kelsey Stratton & Uttara
Sukumar [2012] : IKEA as an Innovator:The Right Combination of Execution and Ecosystem
Innovation [10 November 2012] p.4-20

Q2.4 Does IKEA use any change models to support the implementation of creative and
innovative management ideas? (AC 2.4 use change models to support the implementation
of creative and innovative management ideas.)
A2.4 To analyse the implementation of creative and innovative management ideas, we study the
Porters five factors used in IKEA.
2.4.1 Porters value chain
Powers of buyers:
IKEA provides quality products to satisfy their customers. IKEA is a global brand for household
furniture at reasonable prices. The management of IKEA tries to keep the standard globally so
their customer is happy about the quality and the prices. Their low price strategy clubbed with it
its unique and wide range of products makes it a force to reckon in the market
Powers of Suppliers:
To ensure the quality and low price business policy IKEA must have some supplier who can
supply according to the demand. IKEA sets distinct protocols to their suppliers and it is strictly
mandatory to follow them. IWAY is one of it. IKEA manages long term contracts with their
suppliers. In this way supplier and IKEA both feel more secured. If something happens with the
supplier IKEA also got time for supplement. So in this case supplier got limited powers.
Competitive rivalry:
IKEAs furniture competitors offer different functionality and design and is ever unique and top
quality. Its innovation strategies clubbed with constant reviewing of the market allows them to
provide their product at unbeatable prices which leaves them at numero uno in the market. Flat
packing policy is a prime example which saved a lot in price and easy for customer to carry out.
New entrants:
IKEA tends to locate their stores remotely away from the city with huge parking spaces and huge
stores. However due to the distance location, there is room for other competitors to have an
advantage when it comes to easy access to the stores for customers.
Substitutes
Currently, IKEAs effective global sourcing strategy and unique supply chain management
allows the firm in leading without threats of a substitute. Moreover, IKEA innovation designs are
able to satisfy trend of consumers demand. John Leland (2002) states typical American shoppers
like new things, travel abroad, take challenges and functional technology. Thus, IKEA
consistently revise their fashion design style of furniture able to tag along consumers trend.

Reference:
Anon: "Success Of IKEA." [ONLINE] [Accessed 04 Jul 2014] Can be found at
http://www.123HelpMe.com/view.asp?id=167516
Anon: Strategic Analysis and proposal for IKEA [n.p] [n.d] [ONLINE] can be found at
http://www.ukessays.com/essays/marketing/strategic-analysis-and-proposal-for-ikea-marketingessay.php [Accessed 3rd July 2014]
Anon: Analysis of creative and innovation management [n.p] [n.d] [ONLINE] can be found at

http://www.ukessays.com/essays/management/analysis-of-creative-and-innovation-managementmanagement-essay.php [Accessed 3rd July 2014]

LO 3: Be able to influence others to effect change in an organization

Case Study

Threadless.com
Clothing is a huge industry and a daunting prospect for a new entrant. On the one hand there are
large players with scale economies, sophisticated logistics, low labour cost assembly operations
and advanced retail and distribution networks. On the other there are boutique, fashion-led
houses with an emphasis on design, quality and customisation and with a clientele prepared to
pay high prices for these attributes. Yet a small US start-up Threadless.com has confounded
those skeptics who felt there wasnt room for any new player, let alone one with no prior
experience of the industry. Co-founders Jake Nickell and Jacob DeHart started the company with
$1,000 in seed money in 2000 although the idea was still more about building a web community
than a major clothing business. "It was just a hobby, a way for people to get their artwork out,"
Nickell commented in a recent interview. By 2002, the hobby had surpassed $100,000 worth of
T-shirts and attracted more than 10,000 community members, mostly artists in their teens and
20s. The user base has continued to grow from 70,000 members at the end of 2004 to more than
700,000 today. Sales in 2006 hit $18 million -- with profits of roughly $6 million. In 2007,
growth continued at more than 200 percent, with similar margins.
Nor was this a niche entry, trading on a specialised fabric or design or access to a boutique
market. It has succeeded in one of the mainstream areas of clothing the T-shirt. Amongst the
most popular items worn on the planet, T-shirts as an overall business are huge but making a
successful business out of their design and manufacture can be a nightmare. First there is the
design problem. Although there is a market for plain white T-shirts the real business lies in Tshirts with something on them colours, pictures, slogans essentially something which allows
the wearer to express him/herself and which differentiates the Tshirt. And the problem is that
different people want different designs so to match the variety of designs any new entrant
would normally need to recruit an army of specialist designers.
The problem doesnt stop there whilst people undoubtedly want different deigns the business
depends on picking those designs which will have wider popularity. Otherwise the risk is that
you will make a batch of, say, 50,000 T-shirts only to find there is no market for them. So
another issue in starting up in the business is recruiting another army of market researchers to
enable a better forecast of what is likely to sell.
Threadless didnt worry about these problems when it started up in 2000. In terms of the design
problem their response was not to hire their own designers but rather to use the principle of
crowdsourcing essentially engaging potential users in the process of designing their own T
shirts. On their website the company runs a weekly competition to which anyone is invited to
submit designs. These could come from an 80 year old grandmother, a 3 year old boy or a
professional textile designer. It doesnt matter the model is simply to run a competition and use
this as a way of attracting a high volume and variety of ideas.
That approach offers a way of dealing with the designer problem but what about the market
research? How would they know which of the designs might be a big seller and which a flop?
Once again rather than try and second guess they make use of crowdsourcing asking the webbased market place of visitors to their site which of the designs on display are popular. There is,
for each design, a simple voting scale running from liking to loathing the design in question.
Using this voting system allows Threadless to gauge quickly which ideas are popular and
therefore which ones to commit to producing.
They receive around 800 submissions each week for the competition and, using the above
system, pick the most popular 4 and put these into production. They make a batch of between 50

and 60,000 T-shirts and already have many pre-sold because one option on the voting page is a
tick box indicating the voter would buy the T-shirt if that design were available.
Designers of the winning entries receive $2000 plus $500 for every reprint. But the appeal of
Threadless is less about money than recognition - "It wasn't so much the money," says artist
Glenn Jones, who won $150 in a contest in 2004, at age 29. "It was how cool it was to get your
shirts printed."
The company began as a typical internet start-up, requiring little capital or resources and
involving only a handful of people all the manufacturing etc is contracted out. But their success
with the approach has enabled them to build a larger business based on the core principles of
crowdsourcing and community building. Their experience is typical of a growing movement
around mass customisation in which users play a much more significant role in the front end of
the innovation process. Companies like Muji in homewares, Lego in toys and Adidas in footwear
are all making extensive use of the approach which owes much to the principles of user-led
innovation first set out by Eric von Hippel (Von Hippel 2005).
Threadless have grown the customised community through targeting key niches designs by
young children for young children, professional and limited edition artist T-shirt designs, etc
but retaining the sense of user involvement in the process. On occasion, special contestsknown
as "Loves Threadless"run in association with various sponsors. These contests set a theme for
designs, with a selection of additional prizes being awarded to the chosen winner.
The success of the core Threadless concept has also led to several spin-off projects applying the
model to neckties, accessories like wallets and bags and wallpaper, and their designs are also
available as limited edition prints. They run parallel sites to support these like
NakedandAngry.com, OMG and 15MegsofFame.com (in which the crowdsourcing/voting model
is applied to mp3s of aspiring musicians with the potential prize of a gig in a live Chicago venue.
They have also opened a retail store (2007) in Chicago where in addition to seeing and buying
products there is also a design gallery and workshop where users can attend design classes. In
2008 they launched a weekly video segment called Threadless Tee-V on their website.

Q3.1. How does Threadless produce an appropriate rationale to persuade their

stakeholders of the benefits of a creative and innovative management idea?. (AC 3.1
produce an appropriate rationale to persuade stakeholders of an organization of the
benefits of a creative and innovative management idea.)
The personnel who have an interest in the organization and is influenced or affected
directly or indirectly are the Stakeholders.
They began as a t-shirt design competition on the now defunct dreamless.org, a forum
where users experimented with computers, code, and art. Nickell and DeHart invited
users to post their designs on a dreamless thread and they would print the best designs on
T-shirts.
By 2002, the hobby had surpassed $100,000 worth of T-shirts and attracted more than
10,000 community members, mostly artists in their teens and 20s.

 Threadless isnt just a place to buy stuff. Its a place where people do stuff too. The
people design the shirt ideas; decide which shirts get made, post to forums, upload photos
of themselves wearing the shirts, etc.
Threadless makes people feel like partners, not just customers. Thats why people
become Myspace friends with Threadless. They start blogs about Threadless. They care
what happens.
The rationale to persuade their stakeholders comes also from the attractive Programme as
its playful. This playful attitude is part of why people get excited about Threadless.
Plus, theres a subscription revenue stream via the 12 club (a limited edition tee is sent
every month for an entire year). Theres a Street Team affiliate program where you can
earn points toward future purchases by referring sales or submitting a photo of you
wearing a tee. All these approaches wisely spread Threadless eggs to different baskets.
Customers can request reprints of sold out designs on the Bring Em Back page. The cost
of a t-shirt is around $20. Styles include mens tees and womens tees, V-necks, scoop
necks, and boat neck tees. Other clothing includes hoodies and tank tops.
They also sound out crisp emails that get straight to the point with photos of the latest
tees.
Also, Threadless cares about the details. The shirts are quality. The designs are well
executed. Its not just the products, either. The site has lots of nice UI touches too.
Threadless is on point. Real, profitable, human, funny, quality, charitable, and
independent, its about time more people started paying attention

Reference:
Brabham, Daren C.(2010) 'MOVING THE CROWD AT THREADLESS', Information,
Communication & Society, 13: 8, 1122 1145, First published on: 17 August 2010 (iFirst)

Q3.2. Explain the process how Threadless communicates a creative and innovative
management idea to stakeholders of the organization.. (AC 3.2 communicate a creative and
innovative management idea to stakeholders of an organization)
3.2.1 The Purpose
In a problem-solving sense (Jonassen 2003), Threadless goal state is to acquire innovative,
attractive, sellable designs for its t-shirt line, and, in a sense, the task environment or problem
space for this design process occurs in the contest on its Website.
3.2.2 The problem
As a crowdsourcing company, Threadless problem is that it needs t-shirt ideas designed to be
printed onto shirts and sold for a profit.
3.2.3 The communication
Its solutions come from the crowd in the form of design submissions created in Adobe
Illustrator and Photoshop programs following a downloadable t-shirt design template from the

Threadless site. The crowd then votes on these designs for one week and the top vote-getting
designs are chosen for printing. Threadless then sells these t-shirts back to the crowd at what
would be considered a low price for a designer t-shirt: around US$1520. Shirts are shipped
internationally from the Chicago warehouse. Customers can request reprints of sold out designs
on the Bring Em Back page.

3.2.4 How it works

Majority of Threadless employees were engaged in the Threadless community prior to becoming
employed by the company. Thus employees are very much an extension of the Threadless
community and ultimately support the Threadless brand by engaging in the community.
The interactions can range from posting on the ThreadStaff blogs, their role as models for the
merchandise, and interacting with community members with designer interviews. It is this type
of transparent contributions that really make the Threadless model work. By combining the role
of a Threadless community member in addition to the role of employee, Threadless staff is given
greater credibility and their responsibility to direct the community and even their responsibility
to pick winning designs is further respected because of how they engage in every part of
Threadless.. By providing a role suited for everyone and a plethora of ways to engage,
Threadless has created an intriguing community.

Reference:
Brabham, Daren C.(2010) 'MOVING THE CROWD AT THREADLESS', Information,
Communication & Society, 13: 8, 1122 1145, First published on: 17 August 2010 (iFirst)

Q3.3. Explain the manner in which Threadless establishes key goals and priorities for
implementation of a creative and innovative management idea using feedback from
stakeholders (AC 3.3 establish key goals and priorities for implementation of a creative and
innovative management idea using feedback from stakeholders.)
A3.3 At threadless, there is no major differentiation between the customers and the employees. It
is an organization that works on the principle of crowdsourcing.
3.3.1 : Negotiative and participative Dealing
Threadlesss business model actively involves customers, which is unlike other apparel
companies that release monotonous t-shirt designs. At Threadless members actively participate
by critiquing designs, blogging and by posting songs and videos. Threadless has also been
profitable by selling the designed t-shirts to its members.
3.3.2. The requirement of the market
Successful NPD (new product development) is directly proportional to the understanding of
consumer needs and product development efforts that meet those needs.
Since the customer itself is partly the employee, there is a keep up in trend and the latest
demands and requirements of the market.
3.3.3 The goals and priorities

Let the community create the content.

No advertising and let the community build itself

The community themselves is to help with the business.

Features modified or added as per user feedback
Reward for active and positive participation

3.3.4 Bottomline
The success of Threadless boils down to the fact the the Internet users are not merely browsers
but are actively interactive and with their invaluable input along with their active participation,
The Web is an ideal technology for aggregating millions of disparate, independent ideas without
the dangers of too much communication and compromise (Surowiecki 2004, p. xix)
The problem-solving function at Threadless is ideational because it concerns the generation of
unique design ideas. Thus, the success of Threadless process can be explained by both the
diversity of a wise crowd and the suitability of ideation problems in open innovation formats.
Threadless provides innovative and unique designs which are in lieu with the current market at
surprisingly affordable rates. The immense feedback ensures, Threadless is second to none when
it comes to being the frontrunners in freshness and unique blend in the market.

Reference:
William C. Taylor (2011) : The Company as Community: Threadless Puts Everyone in Charge
[6th January 2011] [ONLINE] Can be found at
http://www.fastcompany.com/1714561/company-community-threadless-puts-everyone-charge
[Accessed 2nd July 2014]