PROJECT
REPORT
Submitted to: Ms. Urooj Shahid
Date of Submission: December 24th,2021
Abdul Haseeb Khan
Shahfain bin Ejaz
Sherjan Aamir
Madeeha Zainab
Zainab Furqan
Presented by:
Group 1
Company:
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Table of Contents
RECAPITULATION OF THE PROJECT PROPOSAL ____________________________ 3
EXECUTIVE SUMMARY _____________________________________________________ 4
PROJECT PLAN _____________________________________________________________ 5
→
Strategic Management Process________________________________________________ 5
→
Purpose/Objectives __________________________________________________________ 6
→
Project Selection _____________________________________________________________ 6
Project Scope Statement _____________________________________________________ 8
STAKEHOLDERS____________________________________________________________ 10
→
Dutch and foreign governments: _____________________________________________ 10
→
Customers: _________________________________________________________________ 11
→
Competitors: _______________________________________________________________ 11
→
Employees: _________________________________________________________________ 11
→
Suppliers: __________________________________________________________________ 12
→
Parent Organization: ________________________________________________________ 12
ROLE OF PROJECT MANAGER _______________________________________________ 12
STAGES OF PRODUCT LIFE CYCLE ___________________________________________ 13
PROJECT DIAGRAMS _______________________________________________________ 18
→
Gantt Chart __________________________________________________________________ 18
→
Activity-on-Node Diagram ______________________________________________________ 18
RISKS AND PROBLEMS OF THE PROJECT _____________________________________ 19
RECOMMENDATIONS ______________________________________________________ 23
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RECAPITULATION OF THE PROJECT PROPOSAL
Nature: Furniture Retail Company
Product Idea: A Smart Closet with a Virtual Try-On Interactive
Display Feature while accounting for the contents of the closet
Thesis: This project for IKEA has been brought to attention because of its novelty and
originality as well as the alignment of objectives of the concerned corporation. IKEA,
primarily a furniture and home appliances retail company, has stepped foot in the portfolio
of “Smart Home”. This entails automation in the domestic sphere.
We propose a smart closet with a virtual try-on feature based on an algorithm
incorporating Augmented Reality, Artificial Reality and Synthetic Media. This product
allows you to virtually try on your clothes within the comfort of your home, right in front of
your closet while accounting for the availability of the articles of clothing inside the closet
at that point in time. The interactive, touch-enabled display will help the customer pick out
and explore outfits with the utmost comfort, convenience and luxury.
IKEA has catered to the middle socioeconomic class for the most part. Though the launch
of this product, not only will it be changing the landscape of homeware and house
automation but also diversifying its customer base by catering to a mostly untouched
segment of the market
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EXECUTIVE SUMMARY
The undermentioned project report breaks down the launch of a new product by the future
retail company IKEA. It inspects the intricacies of the project from numerous angles.
The report provides an overview of the layout, prerequisites the overall plan of the project.
Through the use of charts and diagrams the proceedings of the project are made clear.
A stakeholder analysis is conducted in the beginning, later other more detailed parts of
the project are introduced. The project report includes the activities, duration, cost
estimates, project structure, project selection analysis, the work breakdown and the
potential risks that the project might face,
The project is closed with a brief overview post-completion and recommendations for the
firm based on the current experiences.
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PROJECT PLAN
To unleash the specifics of the project at hand i-e the launch of the Smart Closet by
IKEA. First order of business is getting acquainted with the industry and organization
that we are going to be operating in.
→ Strategic Management Process
Project management and the strategic management process comes in close
proximity as project managers are expected to respond to changes in the external
environment.
The current mission of IKEA emphasizes cost consciousness and acquiring cost
leadership strategy to maintain market share, but this mission statement can be
reimagined prudently. The current shape of the market that IKEA locates itself in
is stagnant. Albeit it has acquired a good position in market capitalization and
customer loyalty, it is not growing and the life cycles of most its current products
are not extremely promising. This is why via environmental scanning; it can be
predicted with optimism that engaging in a new alleyway of operations will surely
benefit the organization in the long run. Therefore, the strict adherence to cost
minimization is mildly eased to promote innovation, creativity and modernity.
Thus, with slight changes we reconstruct the mission as:
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→ Purpose/Objectives
Having illustrated the revised mission statement for the organization, it is convenient
to explain how the successful completion of this project will further the strategic goals
of IKEA and how it will prove beneficial to its profitability.
This project has the objective to propel the firm into a new direction that has not been
explored as of yet while staying true to its traditional operations. It has the right mix of
familiarity since most of the structure of the product is pretty similar to a decent
modern close and experimental diversity with the virtual try on feature which
provides a luxurious and sophisticated touch to the overall experience. This will garner
a new market towards the organization while retaining the one currently held.
→ Project Structure
The structure which was implemented for the execution of this project was strong
matrix. The reason behind this was the role of individual functional units like the
engineering and programming team is pivotal to the project but along with that the
significance of project management cannot be ignored either as the project involved
extensive collaboration and integration that can be smoothed out by the presence of
a skilled and competent project manager.
→ Project Selection
It is evident that that the adherence to low prices as a goal will be compromised with
the launch of this product due to the nature of its features and make. That does not ,
however, mean that the project we have selected does not align with any
organizational goals with IKEA.
Following are the publicly known core values of IKEA.
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Lead by example
Togetherness
Cost-consciousness
Caring for people and planet
Simplicity
Different with a meaning
Renew and improve
Give and take responsibility
Aside from cost-consciousness, each of these key organizational values can be
incorporated in the project we have selected. A couple of these bullets are inherently
integrated in the of the product itself like leading by example, improvement and renewal
and striking meaningful difference. Whereas, other can be worked into the project
strategically.
The selection of the launch of the Smart Closet as the project was done after careful
consideration. The potential project was run through the project screening matrix together
with other candidate projects and compared under different fields like the expected
payback period, net present value, strategic fit and urgency and was thence deemed the
most desirable and prudent selection out of the other candidates.
Moreover, under the lens of the project portfolio matrix, our selection is an oyster. This
means that after technical investment has been made on the project and somehow the
obstacle to commercial success is overcome by achieving an impressive but costly
breakthrough, the value obtained from the project increases exponentially. For IKEA, the
Smart Closet with clothes inventory and display system holds the same place; it does not
guarantee commercial success like some of their other home appliances or furniture
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pieces and has a higher cost as well so it is not exactly a safe bet but if the project is
executed efficiently then it show results way above the break-even line.
Project Scope Statement
SCOPE DESCRIPTION
The Smart Closet will be conceptualized with sophisticated
technical skill, made into a prototype, manufactured in a
batch of a number as per the predicted demand and then
propelled into the market for distribution.
IN SCOPE
 Design of the prototype
 Testing and approval of the prototype
 Ensuring the energy efficiency of the product
 Manufacturing
 Distribution
OUT OF SCOPE
 Market Analysis
 Estimation
PROJECT DELIVERABLES


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An efficient user-friendly interface and experience
of the program of the Smart Closet
A fully functional, energy efficient Smart Closet


EVALUATION CRITERIA
LIMITS AND EXLUSIONS
A fixed number of finished products as inventory
Marketing strategy integrated with this drastically
new product in IKEA’s line
FINANCIAL
 Profitability relative to other products sold
 Production Cost incurred
 Return on Investment
NON-FINANCIAL
 Customer Response to the contemporary
development to the product line
 Brand image and changes associated with the
launch of the new product
 Corporate Social Responsibility
 Energy-efficiency of the product
 Green and environment friendly manufacture
 Socio-economic disparity minimization in the
marketplace
 Expansion of the corporate image


Although the layout of the marketing plan
encompasses the scope of the project which will
involve collaborating with the marketing team, the
implementation and execution of marketing and
advertisement is not a direct output of the project
The analysis of the market landscape and research
involved inn that domain and compilation of the
results is also excluded from the scope of the
project
COST ESTIMATION
To estimate and delegate the costs we use top-down/macro approach specifically the
apportion method.
Smart Closet=$2000
1.1 Closet Frame $800
1.1.1 Press Boards $400
1.1.1.1 Wood $160
1.1.1.2 Cutting and Sanding $40
1.1.1.3 Polish and Paint $100
1.1.1.4 Scales and Adjustment $100
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1.1.2 Handles $200
1.1.2.1 Steel and Polish $200
1.1.3 Valet Rod $200
1.1.3.1 Steel $100
1.1.3.2 Welding $100
1.2 Display Feature $1200
1.2.1 Display Screen $400
1.1.2.1 LCD Panel $300
1.1.2.2 Fitting and Measurement $100
1.2.2 Coding $400
1.2.2.1 Artificial Reality/Augmented Reality $140
1.2.2.2 Object Oriented Programming $140
1.2.2.3 Synthetic Media $120
1.2.3 Electrical Engineering $400
1.2.3.1 Power Plan $200
1.2.3.2 Circuit Diagram $200
STAKEHOLDERS
The word “stakeholders” refers to a party that has an interest in a certain organization
and is affected by the way that organization chooses to conduct business. It is a common
misconception to refer to shareholders as stakeholders when the two words are not
interchangeable. This is made clear by our organization as IKEA is not a public limited
company and thus , does not have any shareholders but rather is owned by Stitching
INGKA Foundation, which was founded by IKEA founder Ingvar Kamprad.
We will now identify the various stakeholders of IKEA and how our new project affects
their interest in us.
→ Dutch and foreign governments:
A conglomerate the size of IKEA has lasting effects on the economy of various
countries especially the Netherlands. IKEA is the leading home furnishing retailer
and has headquarters currently based in Delft, Netherlands. IKEA is often under
the microscope by European Parliament (EP) which resulted it criticizing IKEA in
2015 for evading tax payments of €1 billion from 2009 to 2014 by purposefully,
finding loopholes and designing the organization in such a way to take part in tax
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avoidance. The Dutch government was also criticized with fingers being raised that
they were helping IKEA hide their shady dealings as IKEA is a big pillar for its
economy, but the Dutch government denied such allegations and emphasized that
they will indeed, help the investigation in any and every way possible.
→ Now given that our project lies in the “oyster” part of the project portfolio matrix,
the European governments are bound to keep a keen eye on IKEA as this
breakthrough can lead to a financial boom in the market with IKEA being
responsible for revolutionizing home technology and thus, reshaping the market.
→ Customers:
IKEA is currently worth $18 billion, and it prides itself over the loyal customers that
significantly add to its value chain. With the decision of IKEA choosing to invest in
smart home, there is always the risk of alienating the loyal customers that have
made our brand a leader in furniture retail. The customers are the ones who will
decide whether, the price tag listed for our new product is worth it or is it just a
fancy gimmick promising “the future”, whatever choice the customer base will
make is bound to affect IKEA and the way it chooses its projects.
→ Competitors:
As previously mentioned, IKEA is leading name in home retail, so its decisions
are not just affecting its own organization but rather, all the competitors who are
trying to overthrow IKEA and its position and thus, the decision of investing in a
novel Smart Home is bound to generate a reaction out of them. Since this product
steps out of the natural realm of home appliances and enters innovation and
novelty. This might give impetus to tending towards a new direction for the
competition and the related industry. Now, the response is not as lucid depending
on the prediction whether, they see investing in smart home as a gamble or an
evolution of home retail is something that they will decide internally but if our
decision turns out to be a success then it is almost a guarantee that our competitors
will try to imitate the same route.
→ Employees:
IKEA is not just responsible for keeping its customers happy but also the
employees it has in 27 countries. If smart home turns out to be a success for IKEA,
it can lead to a shift of investment from traditional home furniture to smart furniture
and with such automation being integrated into the products being offered means
an overhaul of the current employees by engineers and designers who know about
augmented reality and other key features. Such new requirements can lead to
some staff members being let go as their duties will become obsolete as IKEA will
view them as an expense that is not contributing to enough returns to justify its
presence.
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→ Suppliers:
IKEA group is currently responsible for approximately 1% of world commercialproduct wood consumption, making it one of the largest users of wood in the retail
sector. IKEA has suppliers in more than 100 countries. IKEA’s raw materials
suppliers will have a keen interest in the organization’s decision to invest in smart
homes and how it can affect their relationship with IKEA. If IKEA chooses to shift
more towards smart home furniture, then it is bound to reshuffle some of its
suppliers and thus, some can lose business while others will gain more requests
from IKEA.
→ Parent Organization:
As mentioned earlier, IKEA is not a public limited but is rather owned by Stitching
INGKA foundation and is responsible for funding IKEA and in return, receive the
profits generated from it. Such a straightforward financial relationship is selfexplanatory as Stitching INGKA would never want IKEA to fail as it tends to lose
its monetary position by IKEA failing and would want IKEA’s decision to invest in
smart homes to be a success and revolutionize the industry.
ROLE OF PROJECT MANAGER
The role of the project manager is exceptionally important for this project because of the
integration of two contrasting operations involved in the making of the desired product ie the closet frame and the interactive display screen. This means that there needs to be
smooth flow between the two sub-teams and the project manager is responsible fr
The project manager for the smart closet project needs to keep in mind the time and
budget constraints as they are of the utmost importance for this. The timing of our decision
is important as we are choosing to introduce the smart closet at a time when it is not made
common and is indeed a thing that gives us a glimpse of what we will be able to achieve
in the future. Any delays in the introduction of our product can lead to a major blowback
to the organization as major competitors such as Walmart may be able to introduce a
similar product before us in the market and thus, making ours lose all its charm and the
attraction it could have had for the market so the project manager must make sure that
the timeline for the project is followed at all times and the project is always on track to be
completed on time.
Budget constraints must also be kept in check as something as technically advanced as
the smart closet can face expenses that were not thought of earlier and are now, a
necessary to complete the product. The project manager can help minimize this by
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discussing the project in detail with the team of designers and accounting for all the
possible charges that can come forward so that there is not an expense that blindsides
the project.
The project manager may also need to play various roles during the project to keep it
sailing smoothly, that can be the role of a communicator which makes sure that long chain
of communication IKEA that is situated in various countries is not broken or the
role of a negotiator that arranges the materials required for the project.
The project manager has tremendous responsibility for a project this big and must be
attentive, smart and quick in order to overcome the challenges that may arise during it.
STAGES OF PRODUCT LIFE CYCLE
1. Smart Closet (100%)
1.1. Smart Mirror (70%)
1.1.1 Augmented Reality (AR)
1.2. Closet (30%)
1.2.1. Woodwork (20%)
Hardware (30%)
1.1.2 AR Software (40%)
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1.2.2. Painting &
Polishing (10%)
ACTIVITIES/
IDEATION
STAGES
Initiating (01/01 –
06/01: 6 Days)
Planning (04/01 –
15/01: 22 Days)
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-
Decide and develop a
project charter including
required features in the
smart closet.
-
Announce to relevant
employees, suppliers and
to the owning
organization.
-
Determine team
members required for the
product like software and
hardware engineers etc.
-
Determine budget
including direct labor and
management
compensation including
salaries of team
members, labor
employed, material costs
including wood, mirror,
software & hardware
equipment, direct
overheads as well as
machinery costs,
-
Determine time required
for each activity
-
Create a WBS, Gantt
Chart and Activity on
Node
-
Risk Management:
Identify potential micro
and macro risks, do risk
assessment, create risk
responses including
contingency plans and
establish risk response
control mechanism
MANUFACTURING
PRODUCT
COMPLETION
Executing (15/01 –
09/02: 25 days)
Monitoring &
Controlling (09/02 –
19/02: 10 days)
-
-
-
Closing (19/02 –
21/02: 2 days)
Allot tasks to relevant
team members
Monitor and analyze if
everything is on schedule
using Gantt Chart and
AoN
Control and monitor
costs and duration
allocated to each activity
-
Compare actual plan
with ongoing plan and
Take corrective action
against any significant
deviations found
-
Communicate to the
stakeholders
-
Start manufacturing
processes for
required materials
like wood cutting to
build closet structure
-
Assemble AR
hardware for smart
mirror
-
Develop AR software
-
Install software and
integrate with
hardware including
closet
-
Painting &
Polishing
-
Test the software
multiple times
-
Run multiple tests
on hardware
technology
-
Use customer’s
feedback for
improvements
-
Alpha and
beta
launches
to get
customer’s
feedback
-
Post
Project
Evaluation
Project
Report
-
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WORK BREAKDOWN
STRUCTURE
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PROJECT DIAGRAMS
→ Gantt Chart
Gantt Chart
01.янв
11.янв
21.янв
31.янв
10.фев
20.фев
02.мар
1)Initiation
Decide and develop a project charter
Announcement to relevant employees
2)Planning
Determining team members
Detereminig budget
Determining time required
WBS
Risk Management Plan
3)Executing
Alloting tasks
Assemble AR
Develop AR
Installing software
Painting & Polishing
4)Monitoring and Control
Analysing progress
Controlling costs and duration
Comparison of actual work vs schedule
5)Closeout
Audit Procurement
Communication to stakeholders
→ Activity-on-Node Diagram
The activity-on-node diagram is preceded by a breakdown of the major activities with respect to
the development and launch of the new product.
DESCRIPTION
Procurement
A
PRECEDING DURATION
ACTIVITY
6
Conceptualization of the Smart Feature
B
-
12
Prototype of the Programmed Virtual Try On
C
A&B
2
Integration of Digital Protype with Closet for the
Aggregate Prototype
D
C
2
Testing Phase
E
D
4
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ACTIVITY
Tweaks and Adjustments to the Prototype
F
E
3
Manufacture
G
F&E
13
Finishing and Packaging
H
G
2
Storage
Transit
I
J
H
I
1
2
Distribution
K
J
3
Critical Path Analysis
Slack A= 6
Slack C= 1
Slack D=1
Slack F=1
Critical Path: B → C → D → E → G → H → I → J → K
18
0
6
A (6)
START
6
5
12
12
14
14
C(2)
12
0
ES
37
15
12
15
1
6
22
35
35
G(13)
18
19
21
22
35
37
37
40
40
H(2)
35
37
42
22
45
K(3)
FINISH
42
45
12
EF
Activity (Dur)
LS
LF
RISKS ANALYSIS
Every new or ongoing project is vulnerable to risks therefore it is the duty of the project
manager to perform project risk analysis. This will help the project manager identify,
analyze, and respond to any risks. It is crucial for IKEA’s management to list all
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42
J(2)
40
F(3)
19
40
3
18
D(4)
B(12)
0
22
E(4)
42
unexpected events to effectively manage losses and minimize the magnitude of internal
and external risks. By performing risk management process, IKEA’s management is
provided with a platform to avoid or mitigate potential risks.
The following risks are identified by our project manager at the start of the project,
different response actions are prepared to avoid these risks however, if they do occur,
we have necessary contingency plans in place.
Funding/Financial risk
A financial risk is faced due to the use of expensive technology and high-cost
specialized labor. The mitigation of risk would require the determination of the actual
cost of the product and the appropriate funding required for it from investors already
working in the IT industry. However, if we are unable to mitigate the financial risk, as a
contingency plan, additional cushioning in the budget would be utilized.
Unprofitable Market Response
The Smart Closet being developed is outside the current market of IKEA, as it is a highcost high-tech luxury product and might affect the break-even and the success of the
project. Since the product is new and presents an optimistic outlook, we will keep quality
assurance in check and go ahead with the project. There are other ongoing successful
operations at IKEA, so we are willing to accept the risk.
Tight Dependency on Staff/Shortfall:
The personnel hired for the initial prototype who have highly specified skill set to
combine the IT canvas with niche closet-making, their presence would be pivotal to the
project and their absence would be a huge stumbling block in the completion of the
product. The risk would be transferred to the employees in this case, by offering them
contractual agreements which would ensure reimbursement of money and a
replacement provided in case they leave. This contractual agreement would work as a
contingency plan in a scenario where a shortfall of pivotal employees appears.
Compromised Confidentiality of Technology
The algorithm incorporating Augmented Reality, Artificial Reality and Synthetic Media
carefully adjusted in the smart closet is novel technology which if leaked might lead to
loss of competitive advantage. To mitigate the risk, employees will be bound by a nondisclosure agreement (NDA). IKEA’s legal team would provide legal support to avoid
idea theft and patent infringement.
Unreasonable Energy Consumption
The current plan of the smart closet might require more electricity than the acceptable
threshold of the customer, making it undesirable. We would avoid this risk and would
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make changes to the prototype plan, with improvements in the power unit of the closet,
making it a more sustainable and efficient product.
Faulty Communication and Integration of Software Engineering Team and Closet
Manufacture
The manufacturing of the closet with the help of traditional closet making craftsmen and
a highly skilled IT team can be a risk since issues would arise during the integration of
interactive features in the closet. In order to mitigate the risk effective project
management would be essential. During any lapse of communication or conflict the
project manager would be at work to present efficacious solutions acceptable to both
parties.
Following is the risk response matrix for the project of development and launch of the
suggested product i-e the smart closet.
The risk value taken in the second column of the matrix is a measure of the severity of
the risk at hand which is determined using Failure Mode and Effective Analysis
(FMEA).
The risk value is a product of the impact, probability and the chance of detection of the
risk.
Risk Value= Impact* Probability*Detection
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RISK EVENT
Funding/Financial Risk due to
Expensive technology and labor
required
for the execution of virtual try-on
display
feature
Unprofitable Market Response
The product being developed is outside
the
Current market of IKEA, as it is a highcost high-tech luxury product and might
affect the breaking-even and success of
the project
Tight Dependency on Staff/Shortfall
Personnel hired for the initial prototype
who have highly specified skillset to
combine IT canvas with niche closetmaking, their presence is pivotal to the
project and their absence has a huge
cost
Compromised Confidentiality of
Technology
RISK
VALUE
The current plan of the smart closet
might require more electricity than the
acceptable threshold of the consumer
making it undesirable
Faulty Communication and
Integration of Software Engineering
Team and Closet Manufacture
A close mix between traditional
closet manufacture and highly
sophisticated IT feature
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CONTINGENCY
PLAN
RISK
OWNER
3
Mitigate:
Accurate Cost
Determination and fund
acquisition
Additional cushioning
in Project budget for
contingency
Zainab Furqan/
Finance Manager
2
Retain:
Optimistic outlook,
Quality assurance
There are ongoing
successful
operations of IKEA so
we are willing to accept
the risk
Sherjan Aamir/
Sales Manager
4
Transfer:
Contractual
Agreements for
availability, ensuring
money reimbursement
and replacement
In case of shortfall of
pivotal
Employees the
contractual agreement
will work as
contingency plans
Madeeha
Zainab/
HR Manager
4
Mitigate:
Employees bound by
NDA’s
Legal support to avoid
idea theft,
Patent infringement
Shahfain
Ejaz/ Head of Legal
5
Avoid
Abdul Haseeb/
Project Manager
2
Mitigate:
Effective project
management
Restructuring the
prototype plan allowing
reduction of
sophistication to
increase sustainability
Project manager to
dismantle any lapse in
communication, conflict
by offering efficacious
solutions
The algorithm incorporating Augmented
Reality, Artificial Reality and Synthetic
Media carefully adjusted in the smart
closet is novel technology which if
leaked might lead to loss of competitive
advantage
Unreasonable Energy Consumption
RESPONSE
Abdul Haseeb/
Project Manager
RECOMMENDATIONS/CONCLUSION
The use of a Strong Matrix structuring was useful for the project which shows that each
project is like a key with very specific nooks and crannies,
and they need to be tended to accordingly.
Although, the deadline for the project was made but it was a close cut. For future
references, a more prudent look at the timescales would help the performance, morale
and output of the project.
The project of launching a new product in the product line of IKEA which was not only
alien to the current operations of IKEA but also a completely novel piece of home
appliance that has not entered the market yet. This project was eye-opening and
horizon-broadening for the firm. Albeit there were concerns for market response and the
profitability of the project but like entrepreneurial ventures, the risk of novelty and the
thrill of uncertainty pays off if it they executed efficiently and wisely.
This means IKEA should surf in these waters further and expand its customer base and
responsive market and exponentially increase its cash flows.
Work Delegation:
Abdul Haseeb: Process Groups
Madeeha Zainab: Executive Summary+ Conclusion
Shahfain Ejaz: Risk Analysis
Sherjan Aamir: Stakeholder Analysis/Role of Project Manager
Zainab Furqan: Project Plan/Cost Estimation/Scope/Project Diagram/WBS
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