Organisational performance development Essay Example | Topics and Well Written Essays - 3750 words

Organisational performance development - Essay Example To improve their financial performance, businesses have been expanding their operations to foreign markets. One such company is IKEA, whose story is captured in a case study developed by Kippenberger (1997). In this article, Kippenberger (1997) extols the IKEA’s virtues and ethos and its business models. In a similar article, Jonathan (1988) discusses the IKEA’s pricing strategies and compares it with other flat-pack retailers based in the UK. This paper examines the IKEA’s key attributes and suggests ways through which they can be enhanced to create wealth and improve shareholder value. 2. Background IKEA is one of the privately held companies operating worldwide, and it sells flat pack furniture, and bathroom accessories.. The company is renowned for its flat-pack design furniture, which it sells at affordable prices. The IKEA’s origin can be traced to 1943 in Sweden, but it has since grown to 301 stores most of which are located in Europe, North America , Asia and Australia. The name IKEA is an acronym of the originator Ingvar Kamprad and the farm and village where he grew at. The growth of the company has been phenomenal starting in the 1950s, the company printed its first advertisements which were aired on different mass media platforms. The 1960s saw the company expand its presence in the neighbouring countries: Norway and Denmark. In 1970s, the company continued with its rapid expansion program by opening up stores in Germany, Australia, Canada, Austria and the Netherlands. In the UK, the company opened its first store in 1990s, then followed by Poland, Czech Republic, UAE, US, Spain and China. At the turn of the 21st century the company sought to increase its influence by opening retail stores in Russia and Japan. Throughout the years, the company has weathered stiff competition to emerge as one of the greatest furniture manufacturer and provider. It uses the hybrid strategy to provide its clientele with a wide variety of prod ucts and services. In order to control its costs, IKEA has embraced a standardized process and such strategy has helped the company maintain solid financial performance even after the 2008 financial turmoil. According to Ivarsson and Alvstam (2001) the company financial success can be traced to a confluence of many factors including: innovation, efficient supply chain management, ability to respond fast to the market conditions and customers’ needs. This report seeks to examine some of the key features of the IKEA’s business operations while suggesting ways through which it could be strengthened. The company’s vision is to ensure customers enjoy better life while its mission is to provide buyers with well designed furniture at affordable prices. Beside providing customers with affordable goods and services, the other objective of the company is to ensure that the customers receive standardized services in all its stores. To be able to serve its growing clientele , IKEA has a well established organizational structure headed by the CEO and its corporate structure is divided into two: operations and franchising. 3. Innovation and organizational stability 3.1 Innovation Through the one-suit model the company has been able to improve the popularity of its offerings all over the