Ikea Global Sourcing Challenge Essay

2542 Words Mar 21st, 2012 11 Pages
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
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SES: * Retail * 17 countries * Differing cultures * Differing languages * One management ideal * Too many suppliers * Difficult to assure that all are following IKEA guidelines * Hard to keep standards between suppliers * Language barriers

* Ability to maintain highest level of quality * Formaldehyde in the glue * Surfaced in the 1980s * Resurfaced in the 1990s * Billy = deadly poisoned bookshelf * Inability to completely prevent child labor * Surfaced in 1994 * Barner thought she handled * Resurfaced again in 1995

OPPORTUNITIES: * Move from international to global * Focus on regional products * Keep prices low * Especially during economically tough times * Large potential for growth * Only has 5-10% of market share on average * IKEA cares * Supports: UNICEF, World Wildlife Fund, Save the Children * Greener company * Attempt to make a lower carbon footprint * Purchase wood from forests with high conservation value * Lower transportation costs * Environmentally conscious stores * Recycled paper for catalogs * Removed PVC from all packaging * Attempt to keep products out of landfills * Recycling and reusing products in manufacturing * Consistency of low prices * Suppliers all

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