How IKEA Ensures Strategic Alignment To Address Innovation Trend
About IKEA and its innovative furniture designs
Ikea is a Swedish multinational company that designs, innovates and sells ready to assemble furniture. The furniture can be a kitchen set, office furniture’s, home accessories and many more. It is counted as the world’s largest furniture retailer since 2008. It has a revenue of US$44.6 billion in the year 2018. The company is a successful in selling the highest amount of furniture over several countries. It has made a profit of US$4.898 billion. There are 424 IKEA stores operating in 52 countries it has over 2.1 billion visitors to IKEA’s websites every year. The very famous IKEA is derived by the initial from “IK” being his own initials, the “E” is for the farm he lived (Elmtaryd), and the “A” is for his home village Agunnaryd. The company focus mainly on architecture and interior design. IKEA has been active in addressing the child labor issues and tried its level best to include improving of children opportunities so that they can control the future. IKEA is also blamed for the amount of pollution it has created in these years by cutting of the wooden pulp. IKEA’s dedicated co-workers and customers we were able to donate €142 million in 2016.
IKEA uses design thinking in its product development process and also for showroom experience. Ikea now operate by using the system thinking. The trend is how it develops the process and showroom experience is created for the people and how the organization system is operated. Generally the process in which the showroom is designed that gives the customer the freedom to choose and purchase the goods by themselves with the help of the employee. The company has started to deliver the good to them top their houses (Edvardsson, Enquist & Hay 2006). The digital transformation has digitized their value in the market. This has initiated the organization to manage thing better and the company is gaining from the design thinking and system thinking.
The true design potential is to leverage the multidisciplinary team and service experience. This innovate the new solution to implement the working in a new mindset.
A standard and superior thinking which has the capability to transform the design thinking creativity to problem solving approach into a structured innovation approach by giving a method tool to empathize with people, create human centred solutions and de risk the failure by doing prototyping. The change that the organisation is looking for when they are in process of innovation (Brown & Wyatt 2010). The innovation is for development to make the task easier and profitable. The Fig 1: Design Thinking
IKEA’s use of design thinking and system thinking
Problem that is faced when business is managed by using the old process by the untrained team. The danger is when the lack of integration and continuity is missing then the whole system starts to fall. There becomes an urgent need to close the gap to make the system work right.
It is set of forces that is surrounding the organisation. These forces have the potential to affect the way it operates. The organisation needs to properly understand the need for effective management. There is one internal environment and the other is the external environment (Cozzarin, B. P & Percival. 2006)
- A) Internal Environment:The internal environment is made of the organization’s owners, board of directors, physical work environment and culture. The internal environment has strength and weakness of an organization. Trade union, Management, Current employee, Share holders.
- B) External Environment:while the external environment consists of opportunities and threats of an organization. It include legal, physical economic, technology, social, political, culture. It also consists of Competitors, Customers, Employee, Strategic, Planners and suppliers, Economic, Technological, Sociocultural, Political-Legal and International.
These are the organizational environment of IKEA. Each of the factors make a huge impact on the company management.
IKEA is known for innovative design and inventions. The innovation trend is not new for IKEA they are known for the innovation masters who keep creating new things that makes them the world leader (Chesbrough 2010).
The flat pack furniture revolution:- It was invented by IKEA. Which gave rise to product that can be self-assembled. This was a totally new concept for the customer and this also helped to understand the end of the clients and help them sort out the problem of transporting problems. This also let the company to keep the cost of the product low.
Changing the methodology of shopping:- The space taken by the furniture become short when the company started to manufacture flat packed furniture. The warehouse style introduced where the customer use to see the products in the shop and then collect the order from the warehouse.
Designs to best suit the young generation:- IKEA offers capsule collection furniture. The design is suited for small space and for young generation whose priorities are different. To introduce the variety to them they have followed a strategy to give names to these items so that it can be easily associated to them.
Charity work and business:- IKEA do charity and that also is a plan of business. They designed a refugee shelter to offer an alternative to old tents. They made water proof high quality durable tents for affordable pricing.
Offering product made out of recycled products:- The company is committed to the sustainability of the environment thus they are working towards the society safety. They are involving into the use of recycled products. They use recycled plastic and wood to build product that also are durable.
How IKEA’s design potential leverages multidisciplinary teams
Innovative move:- they are making furniture that easier to fix. They only need a snap in the fixture side. The design has been innovated. These are called the wedge style furniture.
Smart appliance:- They are also creating appliance , furniture using new technologies these technologies are so ne what most of the developing countries are unaware of the devices. The automatic, WIFI and remote system are also infused that give the product a new styling.
Restaurant and food chain:- Ikea has started a food chain system that not only provide the Swedish cuisine but also the famous worldwide cuisines. These also attracts the customer to be associated with IKEA store.
These are the new innovation trends that the company has been following to apply the methodology of design think to become a successful organization. Beating the competitor and making the brand a well-established icon.
Innovation strategy is all about creating new value people willing to use and pay for. Innovation strategy is not only about tactics or idea challenges but also about the following of the mission, vision and value of the organisation for defines customer. It helps in structuring and setting a performance boundaries for the possible outcome. The innovation goals should not be separated from the objective of the organisation. Ways by which innovation strategies alignment with the strategic alignment (Afuah, A. 2003).
Understanding the impact of growth on the strategic innovation:- How is the innovation strategies have been formulated to meet the requirement of the growth nessacity of the organisation. How quickly the innovation is adopted in the market and the consumer are adopting the new technologies. The need to strengthen the current strategies to meet the goal and company domain.
Identifying the search field:- The most important factor when it comes to identifying the field of business. When the company is focusing to target a market that is best suited for the product may not be the real picture. Thus the innovation is best required at the space with a well-designed strategies to launch and to exploit the profit form the market. The search field needs to be shown with a link between product benefit, performance and attribute.
To transform the organisation for delivering the innovation results:- The plan needs to be transformed to action and here the action plan is made to commence the idea. They sometime recruits team or a officer to look into the matter of implementation. They need to understand that master the innovation is and journey and not a destination. The process may look disconnected and standalone but some where they are making sense and are connecting to the points and links.
New innovation trends in IKEA’s business strategy
The company sustain the market and competition only when continuously investing in innovation strategies for functional strategic alignment.
The impact of the selected innovation trend is doing a successful business in the industry. There are many trends that are creating a new customer centric market. The innovation is done to make the market perform and make the business successful. One of the innovation trends that has been formed keeping the importance of the environment is providing the sustainable market. The sustainable innovation where IKEA is making furniture’s by recycling the products. The products are plastic and used woods the process is to use these products by recycling (Andreassen, Olsen & Calabretta. 2015).
They are making changes to the motto of the company by becoming the next level furnishing and innovative company. They are home furnishing company they not only focus on making furniture but also innovating in the home solar panels and battery storage. They are exploring the urban organic farming that will be for the kitchen purpose. They are more of an innovative business keep creating new products, forming new trends and moulding customer. The IKEA ensure that everyone has a right to have a better life. The company is full of innovation and that can be seen in the design of the company.
The threat is the value proposition as that is where the competition changes the market and company faces the cost burden. The revenue is also affected by the wrong value proportion. The opportunity will be the customer relationship front as IKEA is very sensitive towards the empathy of the customer. They are doing all the work for a happy and successful customer reviews. The company has strong base and is able to tailor a customer centric service that is creating a strong brand value.
The organisation’s innovation activities in an enterprise is created on the base of analysis and research in the beginning. The training should be given based on the innovative level that the company is planning to implement. The motivation of the employee is also very important for the successful innovation implementation.
The decision-making process is again responsible for an innovative manager who will analyzes:
- The use of innovative ideas
- Innovation the difficulty of implementation
- Value added and risk.
This process of innovation designing and thinking results in future innovations. The innovation capabilities that the organization should develop is for the training of the employees. They should make such informative technology that can easily train the employees and make a proper mechanism to fill the gap. The innovation value that is created should timely be exploited to gain the market share. The market is ever changing the change is also for the exploitation. The innovation strategies that work in the structural alignment wins the market need and makes the best return.
Transforming an organization to deliver innovation results
The Strategic alignment is a methodology that results in linking an organization’s structure and resources with its strategy and business environment. The alignment enables a high performance and good result by optimizing to the people and also to see the meeting to the objective of the organization. It should be viewed in a broader sense which encloses all the in and around the origination. The innovation is an ongoing process. Sometimes it lead to change management that is to be incorporated in the business process. The innovation trend is very important for the company to be able to sustain the competition so that they are gaining the revenue from the market. The innovation trend and strategic alignment was so necessary for the business to run smoothly. The trend of the design thinking is to develop a deep understanding of the challenge then clearly articulate the problem and use the strategies to select the right solution, then design the prototype for then solution, finally do the testing and implementation in the system. This the ultimate methodology for a successful business IKEA has always been innovative towards the issues of the environment and the need of the new generation. They have been innovating through out to make a difference in the society.
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