NAME- NOYEL DEY

CLASS- MBA II SEM

ROLL NO- G-27

DIV- G

SUBJECT- DATA ANALYTICS

SUMMARY:-

IKEA is a global business leader in terms of household products. This position is the result of a

combined effort of the different departments of IKEA.

IKEA is a low-cost retailer of home furnishings that seeks to provide quality products to its
customers. It achieves this in three ways.
Firstly, it outsources costly processes such as production, as well as outsourcing final product
assembly to the customer.
Secondly, it engages in collaboration with suppliers to develop innovative design, production and
distribution solutions.
Thirdly, it encourages the analysis and redesign of business processes throughout the value-chain
and the wider value-network to meet not only efficiency objectives but also the company’s declared
strategy on corporate social responsibility.
IKEA’s business strategy stems from its mission ‘to create a better everyday life for the many
people’. It has a clearly defined business idea ‘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’.The design process is rooted in the IKEA ethos and supports the business strategy by focusing
on form, functionality and low price.

Product designers work closely with suppliers to find innovative cost effective solutions to ensure
that products are economical in their use of resources, recyclable and easy to transport.Product
Information Assistance (PIA) is one of IKEA’s central ICT systems runs on a series of databases which
support the management of product information, product range structures, technical specifications
and drawings.

Product designers, manufacturers and technical experts regularly engage in face-to-face meetings
working together to find ways of reducing costs.

IKEA Components is a wholly owned division responsible for wholesale product distribution and
supplies raw materials for customers to build the furniture as well as assembly kits needed and the
packaging materials.

It is reported that analysis and redesign of distribution processes against key performance indicators
(KPI) has resulted in a 30% improvement of product availability, 85% reduction in customer claims
due to damaged, incomplete or incorrect components and 30% reduction in product handling costs.

IKEA’s social responsibility is further demonstrated by its aim to reduce emissions of greenhouse
gases generated through its operations by using renewable energy and by improving energy
efficiency at its suppliers.

QUESTION AND ANSWERS.

1) The ICT provides the entire product related information to the
management. It includes the product raw material, product range
structures, technical specifications, etc. this helps the management to
avoid the wastage of raw material ad ensures that the products are
economical, recyclable, and easy to transport. IKEA also promotes the
sustainability of environment and the use of renewable energy. It aims at
about 25% of energy efficiency at all of its stores and develops a feasible
transportation facility to and from its stores for its customers.

2) IKEA’s business strategy stems from its mission ‘to create a better
everyday life of many people’. It offers a wide range of products that are
affordable by majority of people. The information and communication
technology system of IKEA was established in the year 1998 and from
there it has managed and helped the management in maintenance of
databases which supports the organization. It is a key to both business
units and suppliers. Suppliers of IKEA are also an important part because
they are the link to the customers and the organization. It supports the
requirements and specifications to the suppliers for making product
available to the customers for order. They engage in regular face to face
meetings that usually takes place at the root level. This provide all the
needed assistance to its customers for example- assistance kits in building
furniture, assembly kits, pacaking materials. The online website that is
launched in 1997 receives a million visits request to the IKEA every year
to assist and improve the customer’s home. This allows a direct
communication of customers and the developing teams and also a
significant cost savings for the buyers.

3) In general, e-commerce is the use of ICT to enable the external activities and
relationships of the business with individuals, groups and other businesses .
The application of e-commerce for understanding customer needs, marketing
products, services, and productmarket solutions, and taking orders from
customers, has emerged as a revolutionary trend in contemporary firms. It
includes a number of online planning tools to assist customers in
improving their homes. The Web-site also has an important role in cost
reduction. Cost-effective customer support is provided by Anna, an
 automated customer service chat character driven by artificial
intelligence.

4) It runs on a series of databases which support the management of

product information, product range structures, technical specifications
and drawings. PIA is a key resource for business units both within IKEA
and for its suppliers. It supports the main milestones in the project
management of product development from requirements specification,
through agreeing the technical specification with suppliers to making the
product available for IKEA retail stores to order.

5) IKEA also expects its IT systems to offer support for development projects that
require large amounts of information and data to be collected, processed and
diffused both inside and outside the organisation. During such projects, information
is extracted by the product developers of IKEAoS and is exchanged with both internal
and external units.
1. Project assignment to a specific product developer and his project team, who set
broad requirements and specifications for the project to be translated into a product
prototype.
2. Presentation to the product council who assesses the match with the original
project goals, e.g., economic calculations and required investments in production
facilities. 3. First buy requiring (1) technical specifications for the involved suppliers,
(2) complete product information for consumers and
3. detailed forecasts of local markets’ expected needs.
4. Contract review with supplying units to formalise, among other issues, technical
requirements into documents called TEDs.
5. News about the developed product is produced and communicated to all of IKEA’s
retail stores before they can place any order. This must happen six weeks before
product launch. 6. Sale start after orders from retail stores have been collected and
fulfilled.
7. Follow-up on the new or improved product in retailing, distribution and
production.