A Study of IKEA’s Product Design and Pricing Strategy Essay

IKEAs competitive priority is based on producing quality wares at a low price. This concept is exemplified in its corporate mantra price with meaning. This is achieved by creating inexpensive products without making its customers feel cheap. This manta is followed from design to the customers home. 2. Describe IKEAs process for developing a new product?IKEA starts the process by picking what the new product willing cost. This will help to determine color, materials used, and design. Next they choose a manufacturer use their network of manufactures. They do this by determining which manufacturer can just about efficiently produce the new product. Next they design the product, keeping in mind efficiency, ie. Packaging, transportping ect. Every inch of the product is reviewed in coordinate to maximize their ability to manufacture, send out and store the new product. Finally they ship it. While shipping, the key word is flat, in fact the flatter the better. From emptiness packin g pillows to exclusively producing disassembled furniture, IKEA is committed to not shipping air.Lastly they must sell their new product. 3. What are additional features of the IKEA concept (beyond their design process) that stand to creating exceptional value for the customer? The way they ship their products is clearly unmatchable of its greatest contributors to its low prices. By remaining flat, shipping only 65% full containers and by building its distribution centers near ports, railways, and highways IKEA is able to ship with great efficiency. They are able to ship the maximum amount of products, at the right time to the right stores keeping their prices 20 the 30 percent lower than their competition. 4. What would be important criteria for selecting a site for an IKEA store? IKEA stores guide a large area to accommodate a large showroom, daycare and food court