IKEA

What is values-based service? How can a company create value for customers and other stakeholders?

Values-based service is defined as service that is firmly based on the core company values as well as social and environmental responsibility. When the core company values and the social and environmental values are in accordance with the values of customers and other stakeholders, resonance (rather than dissonance) occurs. To be successful, a values-based service business must seek resonance with its customers and other stakeholders in terms of values and avoid any suggestion of dissonance. Companies, such as IKEA, nurture and communicate values in their customer relationships.

Read the article “Values-Based Service Brands: Narratives from IKEA” by Edvardsson from the readings for this module. Using IKEA as the company in point, conduct research, using the Argosy University online library and the Internet, to better understand the “IKEA environment.”

Based on your research, write a report addressing the following points:

• IKEA’s Marketing (1 page) 
  Corporate strategy begins with marketing and understanding the key elements of the marketing plan. For IKEA, describe the following elements of its marketing strategy:
  • How do IKEA’s products, services, and related attributes satisfy the wants and needs known as its value proposition?
  • How does IKEA create a well-defined market position that appeals to customer wants and needs and differentiates its offering from competitive offerings in a process known as positioning and differentiation?
• Assess IKEA’s strategy using the criteria listed below:
  • Value Chain (1 page) 
    Analyze the three sources of value (economic, social, and environmental) in IKEA’s value chain.
    • Explain sources of value as they relate to the wants and needs of IKEA’s core customer.
    • Explain how IKEA’s supply chain supports its value proposition.
    • Explain how IKEA’s focus on customer value (economic, social, and environmental) is reflected in its supply chain.
  • Intangible Products (1 page)
    • Explain IKEA’s intangible products and benefits.
    • Explain how other firms employ this concept of intangibles to erect barriers to entry for competitors.
    • Explain how the concept of intangible benefits is used to increase profits.
  • Customers (1 page) 
    IKEA considers the customer to be a critical stakeholder. The IKEA message is directed to the majority of people and what they can afford, and its pricing is dependent on the economic values that serve a majority of its customers.
    • Explain how this approach may or may not maximize profits for IKEA.
    • Explain if this premise is at odds with supply and demand economics. Give reasons for your answer.
  • Performance Measures (1 page) 
    Suppose you are a vice-president of manufacturing for IKEA and are responsible for establishing operating performance measures.
    • For all of the performance factors other than quality and cost, create a set of 4–6 performance measures for evaluating your managers that integrates IKEA’s values (economic, social, and environmental) as discussed in the article written by Edvardsson.
    • For each performance measure, identify one specific process measure that demonstrates how well these values are being upheld in the manufacturing activities including suppliers of the company.
    • Recommend how you would develop the workforce to live these values in the workplace. Suggest types of hiring, training, and performance management criteria that you will apply to the workforce.