IKEA S Global Sourcing Challenge Case Questions Essay

Child labor is a serious problem that affects children from third-world countries all over the world. These children are exploited by multinational corporations ,for their cheap labor all over the world. People, then buy products that come at a cheaper price, from these multinational corporations.These children are often overworked and treated unfairly. People need to stop buying items from countries that endorse child labor.

This paper aims to demonstrate a detailed description of the elements of ‘IKEA’ company based on its famous name in the furniture industry.

Child labor is a sigsignificant problem in developing. Countries across the globe(Dilascia,tracey m).one of the most oftern -cited examples of child labor abuse occurs in manufacturing industries(Dilacia, tracey m).one of the most frequently proposed solutions to the child labor problem is the imposition of economic(Dilacia tracey m ). Many international organizations as well a number of European counties oppose placing on countries that permit child labor( Dilacia tracey m).ultimately ,the problem of child labor will not truly be solved until the poverty( Dilacia tracey m).It is estimated that a staggering million child across the world are exploited child laborers(zoltan, melania barto ).while the u.s. often speaks against child labor and has federal and state laws punishing those who illegally exploited children in this country(zoltan, melania barton). In order to prevent child labor,the u.s. must impose economic santions on countries that continue to exploit children(zoltan ,melanina barton).For instance ,the worst forms of child labor convention 182, enacted in 1999 , was designed to prohibit the worst forms of child labor.( zoltan.

“The main cause for children doing work is poverty,” says Nadira Faulmuller in “This Company is Employing Children”. People should buy products made with child labor. Buying these products will support the many families of the working children, since the reason children are working is poverty. Not buying the products can create more problems for the children working. Even though some say that working children are robbed of their education, individuals should buy products made with the use of child labor because hard labor has the ability to motivate children to get an education.

Ikea is investing 10, 500 crore in India, that send a positive signal to other investors, and had uncertain view of

Global sourcing is an important sourcing strategy for IKEA Company. According to Hultman, Hertz and Johnsen (2012), in 2008, IKEA has 54 different sourcing countries and 30 purchasing departments which were located all over the world. With the expansion of its market, IKEA was not satisfied with selling its product only in domestic and Nordic market instead it put its higher goal in global market. Therefore the sourcing market also expanded with the growing market. There were 64% of its products were sourced from European countries which were mainly in eastern part like Czechoslovakia, Rumania and Hungary; China with a 22% share of the supply was the largest single supply market, and Poland with a 16% share (IKEA 2007). However, IKEA also trades off the cost of raw materials and cost of transportation, hence IKEA combined the Global sourcing with local sourcing strategy to lower the total cost.

The case I will analyze and discuss in this case study is “IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor”. I will begin with the vision, values, and strategy of IKEA and an internal analysis of the issues that they have faced as of the time of the case. Next, I will detail the issues IKEA faced in the years prior to the Indian rugs and child labor challenge. Then I will describe the Indian rug and child labor problem that IKEA faced

IKEA is rumored to be a very standardized retailer, i.e., a certain set of marketing strategies is used that are the same around the world. This indeed sets IKEA, operating on markets in Europe, US as well as Asia and Australia, apart among international retailers. Often the theoretical conclusions in international

IKEA is one of the largest multinational companies in the world dealing with several products. The company sells and designs furniture appliances and home accessories at an affordable price. Ikea has over three hundred stores worldwide enjoying the good name it has created for itself. While they are one of the most profitable furniture companies in the world there are significant challenges and threats that have been overcome and are still needed to be tackled.

At this point I believe it is critical that IKEA takes a bold stance against child labor to

The primary step of my project is raise awareness of child labor because although it is not seen in a place like America, it is relevant in other countries and we are unknowingly supporting it. For example, Nestle and Hershey’s attain their cocoa from farms that use child labor. Or H&M, which supplies clothes made from cotton picked by children (Lamarque). Mostly importantly Microsoft and Tesla, who use cobalt, a substance dangerously mined by children (Sanderson). All these companies have profited through products of child labor because they are cheap. In fact, the National Labor Committee states that a Microsoft supplier paid child workers “$.65 per hour to work 16.5 hour days.” (Carlson) With such a salary, a child would barely buy food. Unfortunately, we are unwittingly supporting child labor by consistently buying

IKEA is one of the most successful manufacturing and retail furniture companies operating in today’s global marketplace. IKEA manufacture from the bottom up, top down furniture that offers environmentally friendly, state of the art designed furniture that is both affordable and attractive to its customers via their online, catalogue and worldwide distribution channels, with a logistics network that are low cost footprints with the enforces on cost efficiencies couple with technology, product design, excellence and customer satisfaction. IKEA was founded by Ingvar Kamprad in a small village in Sweden. Its Scandinavian–style home furniture offer attractive designs at affordable prices. And IKEA is obtainable from 275 stores

IKEA is the largest furniture chain in the world, and in 2011 the Swedish company operated over 270 stores in 25 countries. In 2011 IKEA sales soared to over $35 billion, or over 20% of the global furniture market. Most of its stuffs believed IKEA will massive growth throughout the world in the coming decade because IKEA could provide what customer wanted: good design, and good made contemporary furniture with an affordable price. In one word, IKEA’s global approach focuses on simplicity, attention to detail, cost consciousness, and responsiveness in every aspect of its operations and behavior. (Jones, 2013)

The IKEA Group, one of the world’s top furniture retailers, has emerged as the fastest-growing furniture retailer in the US. Its unique business strategy has given it its strengths for its success today. However, like all strategies, IKEA’s strategy has its own flaws that can pose as weaknesses. IKEA also has a lot of opportunities in the marketplace such as expansions of their company and threats such as competitors in the same industry.

IKEA’s strategy before the mishaps in America could be characterized as going against the norm charting their own path to success using low priced manufactures to secure lower selling prices aimed to target those who were of older age and of middle class standing. Their new strategy was to target those of a younger demographic, young married couples, college students, and 20-30 something singles. By reemphasizing design, promoting through hip quirky advertisements, and encouraging consumers to do away with their old furniture, IKEA revenues doubled in a four-year period. IKEA today has adapted somewhat of a local customization strategy where their store layouts will resemble that of many local household layouts as proven by their success in China where they failed to expand beforehand. They also keep their prices extremely low in some areas as China by sourcing a large percentage of products in the area of operation.