The rationale behind the launch of this product is due to the change in external environment. This environment refers to all factors outside of the organization that can act as pressures on the way it operates (ref: book).There are two components of external environment, namely task and general environment. However, the one that is particularly prevalent in this case is the task environment that includes customers, suppliers, competitors and labour market (ref: lect2), because through research, IKEA had found a change in consumer taste. The research showed that three out of four people want to have less visible cables and about half wants to have less electronic lying around in their living room (ref: article), (talk more about research give numbers). In other words, people want to have simpler electronic arrangements, and as reflected in its furniture design, IKEA is all about simplicity. As a result, IKEA came up with its Uppleva range for the solution, a TV set with no visible cables and only one remote control. (define task environment)
IKEA’s ability to capitalize on this change in consumer taste comes from actively scanning the external environment for changes. It listens to what its customers want and make it happen (ref: 10). This occurs because the external environment of an organization will not stay constant forever. There is a certain level of uncertainty in each industry that the organization is operating in. In this case IKEA has managed its environmental uncertainty in an effective and efficient fashion. In analyzing this part, we need to determine the environmental uncertainty of the industry as a whole. The first part is to determine the simple-complex dimension of the industry (ref: textbook?). This refers to the number of components in the organisation’s external environment. Since IKEA is a global business, its environment tends to be more complex rather than simple. It has to deal with many stakeholders including consumers, governments, suppliers and many more, especially considering that each of those stakeholders have different agendas and come from different cultural background. The second part of environmental uncertainty is the stable and unstable dimension. It refers to the stability and/or volatility of the external environment. In this case, it can be argued that there is not much stability in the industry. There are too many external factors affecting the industry and especially seeing that design of the furniture plays a pivotal role in consumer’s decision to purchase, it is more difficult to predict which products will be successful and which will not.
That is why it is still too early to tell whether Uppleva will be successful and one can only speculate. Seeing that the demand is there and IKEA has extensive distribution network, it may seem that Uppleva will be a successful products, especially considering that there is a sizeable market for convenience and elegance as evident in Apple’s case and to which IKEA can better capitalize to some extent due to its experience, compared to other furniture retailers. Furthermore, IKEA’s next step of introducing a way for consumers to purchase items directly from their TV during advertisement has the potential to change the landscape of many industries especially in marketing (ref; 11).
In addition, this new product has the potential to differentiate IKEA from other furniture retailers because not only does IKEA provides a one-stop shopping for home furniture, it now provides a TV integrated with the furniture, making purchase more convenient. Furthermore Guo, L. (ref:6) argued that companies with better product design tend to perform better financially. Combined these two facts together, IKEA has a bright future because it has placed itself in a unique position by providing well-designed products at a low cost to consumers.
One of the reasons how IKEA has managed to think of such innovative solution to everyday problems lies in its corporate culture. IKEA’s corporate culture can be described as laid back, simple and cost conscious (ref: 9). From this culture comes the innovative ways to cut costs and make life easier such as the flat pack and now Uppleva. As an organization, IKEA try to harness the innovativeness of its employees by allowing them to make mistakes (ref: 7). One employee even said that IKEA will allow him to do what interest him (ref:8).
IKEA’s innovative solution to our everyday problems is one of the reasons that it is the leader in furniture retail industry. Its ability to respond to changes and to constantly monitor the external environment will only strengthen its position as an innovator. Of course this capability comes from the people and the culture at IKEA. Its strong vision and mission created a culture of cost-saving organization that comes up with solutions to make life simpler and more affordable.
IKEA History
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Ref 4:
Ref article: http://www.dailymail.co.uk/news/article-2131353/IKEA-sell-TVs-integrated-furniture.html
Ref 5:
Ref 6: Guo L
Ref 7:
Ref 8:
Ref 9: ikea ceo anders dahlvig on international growth and…
Ref 10: http://ehis.ebscohost.com.ezp.lib.unimelb.edu.au/eds/pdfviewer/pdfviewer?sid=c9a8e873-2ee5-41ed-93be-fa7f2b2cddef%40sessionmgr11&vid=2&hid=2
Francis Cayouette, designer of
Uppleva, said: "The idea behind
Uppleva came from our visits
to people's homes around the
globe to understand their home
furnishing needs and dreams. We
realized that many people look
for an attractive solution that
takes care of the different media
devices in a way that match their
furniture."
Ref 11: http://gigaom.com/video/ikea-remote-control-shopping-connept/
by
scahyadi (student)
