Ikea Global Sourcing Challenge

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IKEA's GLOBAL SOURCING CHALLENGE EXECUTIVE SUMMARY 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. Based on the case “IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor (A)” we will build a modified SWOT analysis that will assess the company’s internal performance and determine the current position it’s facing, followed by…show more content…
The organization has mastered the art of doing business internationally and is considered to be one of the strongest global entities in today’s world. Although IKEA has succeeded on many levels, leaving the competition far behind, there are a few possible threats the company may face in the future while doing business: * With growing competitive retail markets in developing countries, mainstream retailers such as IKEA, have to deal with possible competition from low-cost economies * The regulatory environments across the globe vary and can affect how IKEA does business and its product costs, especially the use of natural resources * Rising shipping prices (IKEA’s business concept is solely based on manufacturing in low-cost countries and shipping the products over to its distribution centers) * Aging population of key shopper segments * The slowdown in first time buyers entering the housing market (This is a core market segment for IKEA products) * The recession slows down consumer spending and disposable income reduces * Rising commodity prices STRATEGIC GAP = the difference between what IKEA is and what it wants to be * The IKEA vision "To create a better everyday life for the many people." * The business idea
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