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Discuss about the Fundamental Reason for the Success of IKEA.

Logistic management of an organization works as one of the key success factors of the organization that helps the organization to provide quality service to their consumers (Márquez, Pardo and Nieto 2015). In this era of globalization where every business organization is expanding their business to the every corner of the world, it has become essential for the organizational managements to maintain a strong and effective supply chain along with the logistics management (Ringsberg and Lumsden 2016). It is often evident that many business organizations face several challenges due to failure of the logistics management. Thus, all the business leaders implement all the required and efficient techniques to strengthen logistic service. IKEA is known for its world class and stylish furniture (Stadtler 2015). The journey of IKEA has been started since 1943. It has put significant impact on the world of furniture by providing high quality service to the consumers. The organizational management of IKEA pays close attention to their logistics and supply chain along with the quality of the products. They are aware of the fact that it is not possible to grab the attention of the large number of consumers without meeting the expectation level of the consumers by providing uninterrupted service to the consumers within the desired time span (ikea.com 2017).

The following article has concentrated on the logistic service of IKEA that works as a major strength of the organization. It has enlightened various aspects of its logistics management, which help the organization to flourish day by day.

According to the reports, IKEA delivers more than thousands products daily which requires a strong supply chain management along with the strong logistic management (Waters and Rinsler 2014). The primary objective of the organizational management of IKEA is to provide flawless service to their large number of potential and loyal consumers. In order to achieve the desired target, it is highly essential for the organization to maintain strong, scientific logistic service. There are some key reasons that has strengthen the logistic service of the organization, such as

IKEA management has full control over the logistic service of the organization. In order to offer high quality service to the consumers under all kind of circumstances, the organizational monitor the performance of the logistic service and employees who are appointed to provide quality service to the consumers. It helps the organization to identify any kind of loopholes in their logistic service, which is highly beneficial for maintaining long-term logistic service. By adopting such practices, the organizational management can easily overcome many future risks that can destroy the reputation of the organization (Reimann and Rolfson 2016).

Flow of Goods

The efficient and effective flow of goods among the stores of IKEA is one of the key reasons for the success of the logistic service of the organization. It ensures quality service to the consumers in an affordable price. The leaders of IKEA believe in teamwork. Efficient logistic staffs of IKEA pick up the manufactured products from the firms and deliver the products to the stores where the team unload the products from the trucks and other vehicles and reload it in the shelves and racks of the stores carefully. Although, it is not a part of the logistic service, it is important to provide quality products to the consumers. Hence, the organizational management considers the fact in their logistic service as well (García-Arca et al. 2014).

The organizational management maintains effective communication with all the members of the logistics service to strengthen the logistic service. They supervise all the activities of the employees to ensure that they are motivated to perform their role in an appropriate manner. It helps them to maintain a strong logistics and supply chain management, which is the key success factor of the organization. They appoint all the modern techniques to maintain regular communication with the employees who are appointed for the logistic service (Lebherz and Hartmann 2017).

Another key weapon of IKEA is their skilled and experienced employees who are aware of their role and responsibility towards the organization. The leaders of IKEA pay close attention while recruiting staff members for their logistic service. They always appoint skilled and efficient employees who possess quality experience in the respective field. It helps them to participate actively in the organizational operation. The leaders of the organization make sure that all the employees are aware of their role and responsibility towards the organization. They often conduct training session for the employees where they provide training to the employees about the modern techniques and working style. It helps the employees to adopt modern skills, which put strong impact on the performance of the employees. Employees are considered as one of the key pillars of the organization that plays major role in the success of the organization. Hence, the leaders of IKEA consider e fact while designing their organizational structure (Lebherz and Hartmann 2017).

As discussed in the earlier section, these skills have distinguished IKEA from other business organization that has faced massive failure in the logistic section. There are many successful and leading business organizations that have failed in maintaining effective logistic service to provide uninterrupted service to the consumers. An exemplary example of such business organization is Apple. In 2001, the organizational management of Apple fails to provide enough iPods to the potential consumers. It worked as a weak link for the organization. It has led the organization to face an awful consequence. Another major reason for such failure is miscommunication between the employees, Apple authority and misleading of the leaders. It is the responsibility of the leaders to ensure that staff members of the organization are contributing their best performance for the benefit of the organization. Moreover, they need to ensure logistics service of the organization is working properly. However, the apple authority has failed to perform their roe in an appropriate manner, which led the organization to meet the deadly consequence. Although, Apple is a renowned name in the technological industry, the organization was about loose a large number of loyal consumers due to this incident (Johnsen, Howard and Miemczyk 2014).

Managing Logistics

The competitive nature of the market has been enhanced in the past few years due to the arrival of many strong rival companies in every sector (Szymonik and Bielecki 2015). Every business organization is trying to incorporate efficient and modern technologies every now and then to stimulate the organizational function and survive in this competitive era. It has become mandatory for every business organization to enhance their competitive advantage to survive in the competitive era and battle against the competitors (Banaszyk and Fimi?ska-Banaszyk 2016). In this scenario, IKEA also faces various challenges every now and then in the industry while performing due to high competitive nature of the market. In order to overcome these challenges the organizational management needs to enhance their competitive advantage. It will be beneficial for the organization to achieve the desired position in the market. Although, IKEA is considered as a giant in the furnishing industry, the organization must enhance and maintain its competitive advantage. In order to achieve the desired target the organizational leaders of IKEA needs to follow some steps, such as-

The organizational management needs o maintain strong and effective communication with the employees and suppliers and distributors. Communication is the key for success of every business organization. It helps the organization to maintain transparency within and outside the organization, which is highly required to achieve the long-term organizational goal. The organizational management must adopt all the modern technologies to interact effectively with the members of the organization supply chain and logistics service. It will help the leaders of the IKEA to maintain regular communication with the suppliers, distributors, consumers and employees. By adopting such practices, the can give a vivid idea about the requirement and demand of the loyal consumers which will help them to perform in an appropriate manner (Komassi and Pal 2015).

Although, the IKEA authority aims at appointing loyal and hard working employees within the organization to stimulate the performance of the organization, they need to pay more attention to influence the commitment level of the staff members. The must provide some provisions to their employees, like some extra leaves, monetary support, rewards and appreciation to the employees. It will motivate them and enhance their commitment level towards the organization. They will feel as an important part of the organization and it will shape their behaviour in an appropriate manner. The organization must appreciate their employees for their good performance. At the same time, they must stand by the side of the employees during their crises. They can provide monetary support or moral support to the employees when they are going through any kind of rough patch. It will motivate them to participate in the organizational function in an appropriate manner (Tejedor, Tejedor and Elola 2016).

Experienced Employees

The organizational management needs to adopt modern technologies to strengthen their logistic and supply chain management. The advancement of the technologies has provided a wide opportunity to the business organization to provide quality service to the consumers. The leaders of IKEA need to adopt all the suitable techniques that can be beneficial for the growth of the organization. It will help them to battle against the rival companies and survive in the competitive era (Mendibil et al. 2013).

The previous discussed strategies are suitable for other business organization as well. It can be adopted by other business organization to enhance their competitive advantage and survive in the competitive era. As discussed in the earlier section, communication is the key success factor of every business organization (Trkman, Budler and Groznik 2015).

In this modern era, where all the business organizations are operating globally it has become essential for the authority of the organization to maintain a strong interactive relation with other parts of the organization and large number of suppliers and distributors to provide uninterrupted service to the local as well as global consumers. Otherwise, the organization may become the victim of miscommunication or misunderstanding which is harmful for the growth of the organization. Thus, it is essential for the leaders of the organization to embrace all the modern communication techniques to boost up the communication structure organization to provide uninterrupted service in a large scale (Gustafsson 2017).

As discussed in the earlier section employees are e of the key weapon of every organization that works for the benefit of the organization. In this competitive era, it has become mandatory for every business leaders to maintain a strong and effective relation with the internal stakeholders and maintain a peaceful environment within the organizational structure to boost up the performance of the organization. Reward and performance appraisal system works as a key for the employers to maintain healthy relation with the employees. Reward system offers a scope to the employers to appreciate their employees. At the same time, performance appraisal system helps the leaders to identify their weak and strong performers. By such practices, the organizational management can easily work on the weak points of their employees and motivate them to perform actively (Zhang and Shen 2014).

Modern technologies are the bliss for every business organization. It helps them to boost up the organizational function. Modern technologies have left no stone unturned to lead the business organization to achieve the desired target. Business organization often embraces new and modern techniques to stimulate the performance of the organization. In order to provide quality service to the large number of consumers, it is highly beneficial to adopt modern techniques (Mendibil et al. 2013).

Competitive Advantage

Thus, it can be stated that the techniques that have been discussed in the earlier section that is suitable for all the business organization.

It is important for every business organization to be a responsible citizen and perform all the responsibility of a citizen to operate the organizational function in an appropriate manner. Sustainability has become one of the major concerns for the every business organization (Shi et al. 2017). Maintaining effective supply chain management and logistics management also a crucial part of the sustainability development of the organization. As per the given case study, providing high quality service to the potential consumers is an integral part of the sustainability development (Mangan and Lalwani 2016). Clients are the key element of every business organization. In order to retain loyal clients for a long period of time, a business organization must provide uninterrupted service to them. Hence, the organizational management must consider the fact while designing the organizational structure. They must not adopt any techniques that can be harm the reputation of the organization in front of the consumers and destroy the relation between the consumers and company. Otherwise, the organization may face many difficulties in coming future. In this competitive era, it has become essential for every business organization to maintain healthy and friendly relation with the local community and people around the organization. Strong and healthy supply chain and logistic service helps the companies to put a remarkable footprint in the world of sustainability. It distinguishes a business organization from other rival organizations and survive in the race with other business organization (Lun et al. 2016).


In this scenario, the organizational management IKEA maintains its sustainability development by maintaining healthy relation with the clients and providing quality service to them. The organization does not involve in any kind of unethical practices. They maintain transparency level with their distributors and suppliers to encourage them to manage the flow of goods and raw materials. It helps the organization to earn the desired position in the industry.  Being a leading furnishing company of the world, IKEA is aware of their role in the society and the organizational management pays close attention to fact while constructing the organizational structure, which helps the organization to make a strong remark in the industry (Gustafsson 2017).

Conclusion:

As per the previous, discussion it can be stated that the strong logistic management is the key success factor of IKEA. It has helped the organization to fight against all the challenges and obstacles to provide high quality and uninterrupted service to their target consumers. The feature of the logistic service of IKEA has distinguished it from many other leading business organizations that have face massive failure in the logistic service. In order to enhance the organizational competitive advantage, IKEA management can adopt some strategies, such as- effective communication, committed and skilled employees and modern technologies and so on. These strategies are beneficial for other business organization as well. This type of strong and effective logistic management has helped IKEA to ensure the sustainability development and maintain healthy relation with the local community and local and global consumers

Effective Communication

References:

Banaszyk, P. and Fimi?ska-Banaszyk, R., 2016. Symbiotic and Parasitic Supply Chains. Research in Logistics & Production, 6.

García-Arca, J., Prado-Prado, J.C. and Gonzalez-Portela Garrido, A.T., 2014. “Packaging logistics”: promoting sustainable efficiency in supply chains. International Journal of Physical Distribution & Logistics Management, 44(4), pp.325-346.

Gustafsson, Å., 2017. Beyond reasoning: pitfalls when developing an interdisciplinary program. Lärarlärdom, pp.25-44.

ikea.com. 2017. IKEA.com. [online] Available at: https://www.ikea.com [Accessed 16 Aug. 2017].

Johnsen, T., Howard, M. and Miemczyk, J., 2014. Purchasing and supply chain management: A sustainability perspective. Routledge.

Komassi, E. and Pal, R., 2015. Investigating short term strategies in product sustainability index implementation, a case study at IKEA. Universitätsverlag der TU Berlin.

Lebherz, M. and Hartmann, J., 2017. Applying the value grid model to the furniture industry: the example of IKEA.

Lun, Y.V., Lai, K.H., Wong, C.W. and Cheng, T.C.E., 2016. Introduction to Green Shipping Practices. In Green Shipping Management (pp. 3-15). Springer International Publishing.

Mangan, J. and Lalwani, C., 2016. Global logistics and supply chain management. John Wiley & Sons.

Márquez, F.P.G., Pardo, I.P.G. and Nieto, M.R.M., 2015. Competitiveness based on logistic management: a real case study. Annals of Operations Research, 233(1), pp.157-169.

Mendibil, K., Rudberg, M., Baines, T. and Errasti, A., 2013. Operations Strategy and Deployment. Global Production Networks: Operations Design and Management, p.61.

Reimann, H. and Rolfson, J., 2016. The Process of E-commerce Returns: A Case Study of the IKEA Customer Distribution Center in Torsvik, Jo?nko?ping Sweden.

Ringsberg, H. and Lumsden, K.K., 2016. Logistic management of trailers based on the EPCIS standard: A cross-case analysis. Research in Transportation Business & Management, 19, pp.65-72.

Shi, Y., Shi, Y., Arthanari, T., Arthanari, T., Wood, L. and Wood, L., 2017. Developing third-party purchase (3PP) services: New Zealand third-party logistics providers’ perspectives. Supply Chain Management: An International Journal, 22(1), pp.40-57.

Stadtler, H., 2015. Supply chain management: An overview. In Supply chain management and advanced planning (pp. 3-28). Springer Berlin Heidelberg.

Szymonik, A. and Bielecki, M., 2015. Safety of logistics systems as an element of the total logistics management concept. Annals of the Faculty of Engineering Hunedoara, 13(1), p.155.

Tejedor, A.C.P., Tejedor, J.P. and Elola, L.N., 2016. A guide to business management diagnosis applied to a logistic warehouse. The Business & Management Review, 7(5), p.79.

Trkman, P., Budler, M. and Groznik, A., 2015. A business model approach to supply chain management. Supply Chain Management: An International Journal, 20(6), pp.587-602.

Waters, D. and Rinsler, S., 2014. Global logistics: New directions in supply chain management. Kogan Page Publishers.

Zhang, Y. and Shen, X., 2014. The Strategies for Market Risk Management in International Shipping. Management Studies, 2(7), pp.447-464.

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