Culture and Ikea

Topics: China, IKEA, Culture Pages: 4 (1466 words) Published: August 24, 2006
In order to attract customers and investors, many multinational corporations with Chinese supply chains have begun to require certification to global standards associated with quality and environmental management, such as ISO 9000 or ISO 14000. Others impose their own more demanding ‘codes of conduct' upon those who supply them with finished products or components for assembly. IKEA and the shower curtain manufacturer discussed previously are one example. After a manufacturer of some of their carpets was linked to child labor in the mid-1990s, IKEA developed "The IKEA Code of Conduct" for its suppliers, as do many retailers sensitive to public image and the value of their brand names. IKEA was an early and high profile leader in openly addressing issues of social and environmental responsibility in the supply chain. IKEA's motto is "low prices, but not at any price." Clothing and sport goods retail giants such as The GAP and Nike have experienced similar, though more troubled, conversions to high profile implementation of social responsibility programs. The difficulties that western multinational corporations have in balancing their desire to maximize the financial bottom line, while addressing the social and environmental costs of doing business and wishing to appear and to be socially responsible, are apparent within the business model of IKEA. Publicly and internally, IKEA is dedicated not only to maintaining its low prices, but to continually lowering its prices. Recently IKEA committed itself to implementing this strategy not only in its European and North American stores, but in the world's most ferociously price competitive market, China. In order to gain and hold market share in China, IKEA has made significant price reductions to attract reluctant Chinese consumers to products which reflect strong Swedish and European aesthetics. IKEA sells some of its featured items more cheaply in China than in Europe . We recently wandered through IKEA's Beijing...
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