Introduction to Business Management
Question One
One of the recommendations for recruitment and selection of Co-Workers at IKEA is to focus on internal recruitment Recruiting from within can be especially effective in the case of IKEA because these are employees who are already knowledgeable about the values and beliefs that the company espouses. Besides reducing IKEA’s recruitment cost, internal recruitment is also characterised by inexpensive and easier training since the applicants are already acquainted with IKEA’s business culture (Davis, 2010). Besides, internal recruitment is likely to improve employee morale as they are likely to interpret it as a form of reward for their good performance and loyalty. This in turn acts as an incentive for employees to deliver work effectively.
Another recruitment method that IKEA can rely on to select new Co-workers to work on their sales floor is external recruitment by interviewing candidates who have submitted their resumes in response to the job advertisements placed by the company. During the interview exercise, IKEA's HR team might decide to expand their selection criteria to encompass an evaluation of the applicant’s values and personality. This would be in keeping with the company’s philosophy of a culture-focused company. There is a growing trend among culturally-focused organisations to recruit and select individuals who are likely to 'fit in' with the company culture (Gilmore and Williams, 2009). Values, personality traits, and attitudes are hard to develop, unlike academic credentials, skills, and experiences (Thompson and McHugh, 2009). Asking about the applicants' beliefs and values would also enable the recruitment and selection team to shortlist only those candidates that match the values and beliefs that the company espouses.
Question Two
Applicants must be in possession of a Diploma and preferably, a Bachelor’s degree in business-related courses. Applicants with other educational backgrounds may also apply. Besides, the candidates should have an interest in working in a cross-cultural and international environment.
Preference will be given to applicants with 2 or more years of experience in sales.
Sales co-workers need to have an analytical mind, in addition to having a passion for business and consumer insight. Besides, they need to possess the ability to think strategically and tactically. This is besides the requirement of having excellent interpersonal and communication skills, being results-driven and curious being able to take responsibility, showing initiative, and commitment to IKEA's values and vision.
IKEA's sales co-workers interact with customers daily on the sales floor to communicate the company’s range of products, services offered, and their self-serve concept. Accordingly, a sales co-worker needs to possess a passion for retail, in addition to possessing knowledge of IKEA's concept, customers, and product range. The applicants must demonstrate the ability to respond promptly to customers' requests, and to provide them with accurate information. Above all, applicants should interact with customers in a helpful and friendly manner at all times, as this has been shown to generate a positive environment, thereby improving sales. The Sales Co-workers must also demonstrate an ability to collaborate effectively with other employees, including decorators and designers, customer relations, and logistics. This is important as a means of ensuring that customers not only shop independently but are also able to serve themselves.
The most sought-after qualities of sales co-workers at IKEA is possession of a respectful and cheerful disposition towards customers and other employees, in addition to having a passion for active selling (The Economist, 2011). Nonetheless, the sales co-worker should also be ready to embrace diverse tasks, including being able to continually learn on a daily basis, through listening to comments and needs of our customers, as well as the input of managers and colleagues. This goes a long way in developing the sales co-worker's know-how. Possession of a thorough and complete knowledge of the wide range of products that IKEA deals with, along with the company’s mode of working, allows sales co-workers to take individual initiatives for self-improvement.
Question Three
IKEA’s Marketing Mix
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Product |
Price |
Place |
Promotion |
People |
Physical Evidence |
Process |
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-Unique value chain -Value addition from supplier to consumer -IKEA customers treated as ‘prosumers’ due to need for assembly after purchase |
-Cost-based price leadership -Penetration price strategy enables IKEA to acquire considerable market share (Hyde, 2012). -IKEA sell products at low prices due to low-cost logistics, purchasing raw materials in large quantities, location of store in the suburban areas, and embracing a DIY concept in marketing
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-IKEA locates its stores in the suburban areas as part of its low pricing strategy. -Choice of location arguments IKEA’s target market of customers who need limited assistance in assembling furniture. |
-IKEA’s pricing structure and popular brand name informs their choice of trade promotions and sales promotions as the most ideal promotions - IKEA uses price discounts, coupons, and festival promotions, among other strategies, to guarantee that customers realise regular benefits from various deals on offer. IKEA concentrates on localised communication as a means of connecting with local audiences.
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-IKEA's sales people or Co-workers directly involved with customers in the front stage. -Empowers employees to deal with customers’ problems as soon as they occur thus developign a positive work enviornemnt (Blythe, 2012). Provide
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- IKEA’s showrooms designed in a family friendly and attractive environment. -Company offers safe play areas for children and restaurant services.
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-Company’s selling process is largely reliant on its show rooms. At the showrooms, customers get to experience furniture, make purchase decisions, pay for these, and have them delivered to their homes using the company’s delivery vehicles. The company also relies on its online stores to sell furniture.
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Question Four
A company’s accounts refer to a report prepared from your financial records at the close of a financial year. This information is of important to various stakeholders in the firm, including employees, the management, shareholders, lenders, and the government's revenue and customs department, as well as suppliers. The company’s account that IKEA prepares should include such crucial information as the company’s balance sheet. This is an indication of the different assets and liabilities owned by the company at the end of a given financial year. The company's account must also include a profit and loss account that details IKEA’s running costs, sales, and loss or profit made over a given financial year.
IKEA’s shareholders have a vested interest in the company in that they have invested in it. Accordingly, they would want therefore, to evaluate the level of profitability of their investment (Bach and Edwards, 2013). This will determine whether they will realise capital growth or payable dividends, based on the company’s share price. There main concern therefore is on price/earnings ratio, dividend yield, and earnings per share.
Employees would be interested in the growth and profitability of IKEA as it would guarantee their job security. The management is interested in IKEA's company accounts in order to make decisions regarding the management of the firm, to decide if targets set were met, and to determine the amount of supplies needed. Such lenders as financial institutions have a vested interest in the company’s balance sheet and profit and loss account because they are interested in IKEA’s solvency, or its ability to pay liabilities. Suppliers too, are interested in IKEA’s level of liquidity, which indicates its ability to repay its debt for supplies made. Finally, tax authorities would be interested in IKEA’s accounting information due to regulatory and taxation purposes. This will enable the taxman to establish the tax due based on IKEA’s earnings.
Question Five
The Four V's refer to the four attributes of demand in terms of managing processes. The first V relates to the volume of services and products produced. Processes characterised by high output volumes also enjoy a high level of repeatability. Repeating tasks leads to specialisation and streamlining of activities. It may necessitate developing specialised technology to realise improved processing efficiencies seeing as tasks are repeated and systemized. Conversely, low-volume processes are characterised by limited repetition but higher opportunities to produce low-cost services or products (Bamford and Forrester, 2010). For example, KFC or MacDonald's can produce high volumes of products with greater efficiency in comparison with a small, local restaurant. Low-volume processes are less systematized and rarely integrate specialised technology.
The second V relates to variety. Processes characterised by a high variety of services and products also involve diverse activities and diverse technology and skills to deal with these various activities (Neeta, 2015). Such diversity could also be indicative of comparatively diverse inputs to the processes, in addition to the added intricacies of ensuring that services and products match customer requirements. Consequently, high-variety processes tend to be more costly and complex compared to low-variety ones.
The third V deals with variation. Processes can be managed with eases if one is dealing with predictably constant demand. This is because it is easier to plan all activities in advance and channel the resources needed to meet demand. Conversely, unpredictable demand requires that resources be adjusted over time, or that one provides additional resources as a cushion against unexpected demand (Williams, Hickey and Nadel, 2011). For example, manufacturers of high-fashion garments have a predictable demand depending on the seasonality of the garment market. On the other hand, manufacturers of conventional business suits could be faced with unexpected fluctuations in demand.
The fourth V relates to visibility. Process visibility refers to the level to which customers directly ‘experience’ the processes (Williams et al., 2011). For example, customers are more likely to be 'exposed' to such direct processes as healthcare or retail processes in comparison with processes involving information and materials. An example of high-visibility processes is an organisation’s front-office environment such as the information desk or check-in counter at the airport. Conversely, an example of a low-visibility environment in an airport includes cleaning services and baggage handling as these processes are rarely witnessed by customers.
References
Bamford, D., and Forrester, P., 2010. Essential Guide to Operations Management: Concepts and Case Notes. London: John Wiley & Sons.
Bach, S., and Edwards, M.R., 2013. Managing Human Resources: Human Resource Management in Transition. London: John Wiley & Sons.
Blythe, J., 2012. CIM Coursebook Marketing Essentials. London: Routledge.
Davis, A., 2010. Competitive Success, How Branding Adds. London: John Wiley & Sons.
Gilmore, S., and Williams, S., 2009. Human Resource Management. Oxford: Oxford
University Press.
Hyde, M., 2012. CIM Coursebook 03/04 Marketing in Practice. London: Routledge.
Neeta, B., 2015. Handbook of Research on Entrepreneurship in the Contemporary Knowledge-Based Global Economy. Hershey, PA: IGI Global.
The Economist., 2011. The secret of IKEA’s success. [Online].
Thompson, P., and McHugh, D., 2009. Work Organisations: A critical approach, 4th ed. Basingstoke: Palgrave Macmillan
Williams, T., Hickey, M., and Nader, T., 2011. Cambridge HSC Business Studies 2ed Toolkit. Cambridge: Cambridge University Press.
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