Ikea's Global Sourcing Challenge: Indian Rugs Essay

1242 Words Apr 11th, 2008 5 Pages
The case “IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor (A)” is about IKEA’s development from a backyard company to one of the world’s largest furniture retailers, which has to deal with the issues of child labor and how they should behave considering economical issues and the company’s policy!
Conclusions made in this study are only based on the facts given in the case, considering pros and cons of an action.

How should Marianne Barner respond to the invitation for IKEA to have a representative appear on the upcoming broadcast of the German video program?

A live discussion would give IKEA the possibility to explain themselves and their intention concerning their engagement in India. Especially Marianne Barner could
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What actions should she take regarding the IKEA supply contract with Rangan?
What long-term strategy would you suggest she take regarding IKEA’s continued operation in India? Should the company stay or should they exit?

IKEA aims for long-term relationships with its suppliers and also supports them in order to get a reliable but competitive supplier. The same attempt could be done in India as they did in Poland several years before. Of course at first sight it seems as if IKEA would risk to lose some of its reputation and sales power for continuing relationship with the Indian supplier but it would have an even more positive effect on its reputation if IKEA will maintain its connections and help them developing new systems, involving the public. Involving the public by marketing actions helps them to understand IKEA’s intentions so it won’t be misunderstood and will also have a marketing effect itself.
To continue their engagement would also match the company’s policy and Kamprad’s view “create a better everyday life for many people”. This was originally meant to insure affordable sales to customers but they also haven’t had the problem of child labor at that time. So by the time values change and should be extended to broader meanings. As it is a question of moral IKEA can
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