In this first part of this article, we explored the design strategy’s key role in achieving the organization’s business targets, and its creativity places it ahead of competitors in the market. The design role has a more holistic approach than just the product design. Design strategy and management is essential in forming the company’s whole vision and strategic planning.
Design at IKEA is inspiring the continued philosophy of its founder, Ingvar Kamprad, through a focus on people and creativity. This is reflected in the company environment, co-workers, and retailers. IKEA’s stores are also designed to achieve the maximum amount of comfort and pleasure for consumers and give them the chance to make their buying decisions.
IKEA has commitments to its customers and the environment that couldn’t be accomplished without strategic design for both products and the whole process. IKEA’s commitment to its consumers is to provide creative products that are functional and high quality with the lowest price possible. At the same time, the product must comply with IKEA’s sustainability strategy, which aims to create a product that meets consumer expectations while maintaining natural resources through the utilization of renewable energy, recycled materials, and recyclable materials.
In this part, we will continue to go through the different procedures that IKEA applied in its strategy in order achieve sustainable design products. Read the first part of this article: Guide to IKEA’s Sustainable Design Strategy (Part 1)
People and Planet Positive
Sustainability has been part of IKEA’s commitment to society for a long time. In 2012, IKEA launched its sustainability strategy for 2020, known as the “People and Planet Positive” strategy. This initiative aims to take sustainability to a new level in order to:
- Drive the innovation process.
- Transform the business.
- Share investments and open new business opportunities.
The anticipated rewards for applying this strategy are to increase IKEA’s competitive strengths, secure long-term access to resources and raw materials, maintain and develop its supplier base, improve relationships between IKEA and both its co-workers and consumers, increase productivity, and put IKEA in the lead position to act for the good of people and the planet.
IKEA builds its strategy on a deep understanding of the essence of sustainability, rooted in three principles:
- Sustainability is not a luxury, and people shouldn’t have to choose between it and other buying factors, such as design, function, quality, or price.
- Sustainability means to work for the good of the people and planet without compromising future generations to meet current needs.
- IKEA’s sustainability strategy is to put back more than it takes from nature and recycle the waste to create new resources.
- Sustainability is the driver for innovation and transformational change at IKEA as it drives the designers to create environment-friendly products.
The “People and Planet Positive” strategy is built on three main objectives that should be pursued to make IKEA’s innovative business more sustainable:
- Design and inspire millions of people to adopt sustainability practices in their homes through IKEA’s sustainable products that save energy, reduce waste, and use less water — all at the lowest possible price.
- Secure long-term access to raw materials and build resources and energy independence through raw materials supply strategies.
- Take the lead to create better life for people and communities by extending the use of the code of conduct (IWAY) through IKEA’s supply chain.
In order to apply the “People and Planet Positive” strategy, design plays an essential role throughout the different aspects of the plan:
- The design of IKEA products use renewable, recyclable, and recycled materials in their manufacture. Storage and transportation of IKEA products to stores and retailers is reduced using the self-assembly model and eliminating the middleman model.
- The design of IKEA stores saves energy and ensures the most efficient utilization of the space.
- Designing the price for each product meets IKEA’s low price strategy.
- Considering people in the design (human-centered design) creates better life for people.
Based on the IKEA Group Sustainability Report 2012, the following statistics show the impact of applying sustainability measurements to IKEA’s design process:
- 6 percent of wood comes from Forest Stewardship Council-certified forests, an increase from 16.2 percent.
- During operation, 86 percent of waste is being recycled.
- Plans are in motion to move to full LED lighting by 2016.
- 34 percent of cotton is produced from sources that fully comply with IKEA sustainability guidelines.
- A 17 percent reduction in carbon emissions in IKEA buildings.32 percent more efficiency in energy-consuming products.
- A 3 percent improvement in energy efficiency compared to 2011.
The price value of IKEA’s design strategy
IKEA’s low price policy is an example of focused cost leadership. This strategy focuses on producing products at a low price by targeting a narrow market segment. In IKEA’s case, the target customers are young buyers who would like to decorate their homes with beautiful and smart products with the lowest budget possible and without sacrificing quality.
Unlike other furniture stores, IKEA’s products are arranged based on rooms of the home rather than the type of the product. This helps consumers see different options and choose products that fit with each other in a low price range.
Because design plays an essential role in the IKEA production line, it has a deep contribution to determining a product’s price and even reducing this price to meet IKEA’s strategies and compete with other products in the market. Following are some of the design strategies that help reduce IKEA product prices:
- The product design process aligns price to a strategic focus model. When designing a new product, IKEA determines the target price and the market need. Subsequently, the designer starts to build the design based on this model.
- Low-priced raw materials contribute to IKEA’s price policy and sustainability strategy. The raw materials used in IKEA products should be renewable and recyclable. The raw materials are covered earlier in this report, in the Democratic Design strategy.
- The self-assembly model helps reduce the storage and transportation costs, which affect the final price. Additionally, the carbon emissions produced from transporting products decreases to support IKEA’s sustainability strategy.
Human-centered design strategy at IKEA
IKEA’s design and sustainability strategies focus on people and the environment. While the sustainability strategy’s major focus is the environment and reducing the consumption of the planet’s resources, the design’s major focus is the human being and how to provide a product design that meets consumers’ requirements and needs, which are form, functionality, quality, sustainability, and low price. This design strategy aligns with the roles of human-centered design.
Human-centered design is defined by Krippendorff in1989 as “an approach to design and research that takes seriously the proposition that behavior and understanding go hand-in-glove, that the use of artifacts is inseparable from how users conceive of them and engage with them in their world. Let me state the proposition more concisely: Humans do not respond to the physical qualities of things but to what they mean to them.”
The IKEA design process meets the human-centered design definition above in both the production and marketing context. Implementing the human-centered concept in the production process is previously covered in the Democratic Design strategy earlier in this report. The marketing strategy includes a number of methodologies, including the design of IKEA stores. The target in IKEA store design is to give customers the maximum level of comfort and a relaxing experience in order to help them make buying decisions. Categorizing products based on the room of the home and their relation to each other is another method that helps consumers see different combinations and make a decision about which items to buy for every room in their homes.
The self-assembly policy contributes to both the design strategy as well as the sustainability strategy that was discussed earlier in the price value strategy section of this report. As a requirement for human-centered design, IKEA product design should comply with the self-assembly policy so customers can easily get the product from the loading zone into their cars with the least amount of effort possible.
The self-assembly strategy involves customers in the design process as they assemble the design in their home based on completely visual instructions that are understandable without the need for any writing. If the consumer faced any trouble assembling the product, IKEA provides an assistance service by phone.
Apply the Design for Sustainability Model (D4S)
In order to build beneficial relationships between companies with sustainability and social impact in mind, the United Nations Environment Programme (UNEP) initiated the Design for Sustainability model (D4S). This strategy aims to provide a model for companies that improves profit margins, increases product quality, and builds market opportunities while maintaining sustainability and positive social impact.
The D4S model acts like an auditing procedure for companies to identify how each complies with sustainability rules, such as energy savings, using recycled materials, and reducing toxic materials. The UNEP initiative encourages companies in developing economies to apply the D4S measurement, but most of these companies are considered small and medium enterprises (SMEs), and they do not have the awareness, budget, or experience to apply the sustainability measurements and ensure that their product or service design meets them. Many of these SMEs follow larger companies that have the resources to apply D4S measurements, such as IKEA.
IKEA provides a practical example of how to utilize resources in developing and under-developed countries to attain high-quality and low-price raw supplies that can be produced into goods under the IWAY quality control measurements. The benefits for applying this model are higher profit margins for IKEA and better opportunities for developing countries’ small businesses and individuals to produce raw materials and basic products that meet the D4S rules and guidelines. Applying the D4S aligns with IKEA’s “People and Planet Positive” strategy to secure long-term access to resources and build energy independence.
The mechanism to IKEA’s model is based on training individual groups and start-ups to raise plants or animals using the least amount of chemical pesticides and fertilization possible and save energy and resources. While the companies and individuals in developing countries experience a lack of infrastructure resources, such as water and energy, the energy-saving practices and wise usage of natural resources help them to be more productive and in turn to be part of IKEA’s production process using what they already have.
In the IKEA Group Sustainability Report for 2012, IKEA was able to make a difference for cotton farmers by helping them become involved in the IKEA and WWE project and apply sustainability in agriculture, such as using drip irrigation and organic fertilizers instead of the chemical ones.
Applying IKEA’s sustainability strategy required creative design processes and innovative solutions in order to overcome the obstacles that were faced across all phases, from product design and the company production process to facilities and stores.
Design plays an important role in achieving IKEA’s goals on multiple levels. The product design process has to meet the quality, price, and sustainability challenges, such as determining raw materials and creating a product design that ensures energy and resource savings. Additionally, the product design must take the least amount of storage and transportation space possible and be able to be self-assembled.
IKEA provides a clear example of how a company can lead the market through design and creativity. The design strategy helped IKEA to keep its commitment to people and the planet to achieve better life for everyone.
Read the first part of this article: Guide to IKEA’s Sustainable Design Strategy (Part 1)