Operations Management is an Administration of the Business

Questions: 1. How is the IKEA operations design different from that of most furniture retail operations? 2. What do you think might be the major problems in running an operation like IKEA? 3. What do you identify as the operations function within IKEA? How is this different from the sales function? Answers: Introduction: Operations management is an administration of the business, which ensures the highest efficiency of the organization. IKEA had started its furniture business in 1950 at Sweden under Ingvar Kamprad. At present, the organization has already implemented 300 furniture stores. It has been understood that customers have spent a greater time watching the innovative furniture designing and product presentation system. IKEA operations design different from others: IKEA has followed the traditional philosophies for implementing their new operation management system. The organization has implemented an innovative product design to attract the customers. It has been found that customers usually spend at least 2 hours in the stores. The organization has already expanded their business globally and has opened more than 300 stores in different locations. On the other hand, the organization has implemented a new strategy such as self operating warehouses for providing customer satisfaction. The organization has implemented the Value for money furniture collection with a wide range of innovative furniture in different price ranges. Therefore, the product variation of the organization has increased their brand popularity. On the other hand, the flat pack assembling furniture collection also attracted the customers. It has been observed that the IKEA has implemented new promotional strategies in the children play area as well. Moreover, the parents have rented the chair from the nearest stores of children play area. The organization has implemented the room settings strategy for product presentation. The room settings strategy has been implemented by the operation managers to provide the actual use of that furniture at homes. IKEA has gained a competitive advantage in the global market for this implemented strategy. Issues regarding the operations of IKEA management: The organization has opened their stores in the outskirts of the city. It has been unable to open their stores at the center of the city due to the high price of land at the location. It has been observed that IKEA has implemented a strategy where customers have to collect furniture from the warehouse. As a result of this, it is understood that customers have lost interesting in purchasing the furniture, as the product is to be procured from another location. The organization has already implemented the automated warehouse system and has invested a lot. Therefore, there is a high financial risk for the organization in such a case. Operations function: The organization has also implemented an information point for providing different information to the customers. The organization has also implemented a self service warehouse. This has enabled customers to buy their preferable furniture without taking help of store executives. The organization has also built a car parking area and goods collecting area for every store and outlet. Sales function: The sales function is totally different from the operational function. The promotional strategies have been implemented for acquiring competitive advantage in the global competitive market. On the other hand, the organization has implemented room settings in every showroom. The organization has displayed the furniture in different room setting conditions so that customers are interested by the specification and use of the furniture. The organization has implemented a traditional catalogue as well because customers want to see some pictures of the furniture in the catalogue. Conclusion: IKEA has implemented the Value for money furniture collection to increase the sales. On the other hand, the organization has implemented a self service warehouse to provide better service to the customers. Moreover, the organization has also followed a traditional strategy and expanded their business location in almost 300 different places in different countries. These are some of the key strategies leading to in their business growth.