1.

Answer

Customers play an integral role in creating value for a product or service. The demand generated by
customers creates a requirement for the service providers which could be translated into a consumable
service or product. Customer => value creation. 2. Customer feedback is a determining factor while
evaluating the performance of product or service.Product manufacturers and service providers
incorporate the suggestions provided by customers while creating the next line of products. This
elevates the position of customers from mere end-users to co-creators and collaborators. 3. The DIY
model of IKEA is very successful and allows customers to be involved in the design and assembly of the
products. Customers become co-creators which makes the entire process much more rewarding. Thus,
they attach greater value to the products which they purchase. Customers are allowed to mix-and-
match the products available in the catalogue to suit their home furnishing requirements. IKEA also lays
emphasis on packaging which enables large pieces to be dismantled and placed in compact boxes. 4.
These Daly models are more popular than the traditional ready-to-use pre-installed models. IKEA also
uses economies of scale to its advantage. In countries such as China where labor cost is relatively low,
majority of the products and pre-assemble and delivered to the customer. 5. Nonetheless sometimes
customers could pose as potential competitor by revealing market strategy to rivals. In worst case
scenario, customers are resourceful enough to start their own business with a wider range of products
and services. Therefore, customers today should not be taken for granted and their ideas and
suggestions ought to be valued and incorporated in the product lifecycle for greater commercial success

2.Answer

From this case study on IKEA, several key lessons and insights can be derived:

1.Customer Participation in Value Creation:

IKEA's success is attributed to its unique approach of involving customers in the value creation process.
Customers contribute to tasks traditionally handled by manufacturers and retailers, such as product
assembly and delivery, in exchange for well-designed products at lower prices.

Customers become essential contributors to the value chain, participating in the selection,
transportation, and assembly processes. This not only reduces costs for IKEA but also makes the
customers active participants in creating value for themselves.

2. Innovative Retail Experience:

IKEA's stores are designed to provide a pleasant and enjoyable shopping experience. The layout includes
inspirational displays, realistic room settings, and real-life homes that allow customers to visualize the
products in their own living spaces.

Free strollers, supervised childcare, and other amenities make the shopping process convenient and
enjoyable. Customers are provided with tools like catalogs, tape measures, pens, and notepaper,
empowering them to perform tasks typically handled by sales and service staff.
3. Global Adaptation:

IKEA's success in global expansion is attributed to its ability to adapt to local market needs and budgets.
The company tailors its product mix, prices, and even store layouts to suit the preferences and economic
conditions of each market.

The case study highlights specific adaptations made for the Chinese market, considering factors like
price sensitivity, apartment designs, and transportation preferences. This flexibility in adapting to local
cultures and conditions contributes to IKEA's global success.

4. Flexibility in Business Model:

IKEA's success lies in its recognition that customers can play roles beyond traditional consumption. The
company's flexible implementation of customer participation, coupled with clearly defining these new
roles, contributes to the success of its business model.

The case study emphasizes the importance of making these customer roles fun and enjoyable, ensuring
that customers globally co-create their own experiences and contribute to their satisfaction.

5. Financial Success and Global Acceptance:

Despite its unconventional approach, IKEA continues to experience financial success and global
acceptance. In 2010, sales increased, and net income rose, showcasing the sustainability of IKEA's
strategy.

6.Cultural Adaptation:

IKEA's success in different markets is partly attributed to its understanding and adaptation to local
cultures. This includes not only variations in product offerings and prices but also adjustments in
services, such as extensive delivery options and willingness to assemble furniture for customers in
regions where labor is cheaper.

7.Continuous Innovation:

IKEA's success is not static; it involves continuous innovation and adaptation. The company evolves its
strategies, store layouts, and services based on ongoing market research and an understanding of
customer needs and preferences.

In summary, the case study underscores the importance of customer-centric strategies, adaptability to
local markets, and the creation of an engaging and enjoyable retail experience as key elements in IKEA's
remarkable success as the world's largest retailer of home furnishings.