Ikea Global Sourcing Challenge
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 recommendations on the steps IKEA can take in order to solve the issues addressed.
Background:
* Founded 1943 - Ingvar Kamprad * An international retailer of home products (flat pack furniture, bathroom and kitchen accessories) * 313 stores in 38 countries * A privately held retailer chain, Dutch-registered foundation, owned by the Kamprad family * Not present on the stock market – control over the company * IKEA acronym → Ingvar Kamprad (its founder) Elmtaryd (the farm where Ingvar grew up) Agunnaryd (the home town of Ingvar)
BUSINESS DESCRIPTION
Nature of the Organization: * Scandinavian modern style furniture and accessories * International company that designs and sells ‘ready-to-assemble’ furniture * World’s largest furniture retailer * IKEA was founded in 1943 by 17-year-old Ingvar Kamprad in Sweden * As of October 2010, the chain has 313 stores in 38 countries, most of them in Europe, North America, Asia and Australia * Many stores include restaurants serving traditional Swedish food * The IKEA corporate structure is divided into two main parts: operations and franchising * The net sales of IKEA group amounted to €21.846 billion (none of the profit is taxed)
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 recommendations on the steps IKEA can take in order to solve the issues addressed.
Background:
* Founded 1943 - Ingvar Kamprad * An international retailer of home products (flat pack furniture, bathroom and kitchen accessories) * 313 stores in 38 countries * A privately held retailer chain, Dutch-registered foundation, owned by the Kamprad family * Not present on the stock market – control over the company * IKEA acronym → Ingvar Kamprad (its founder) Elmtaryd (the farm where Ingvar grew up) Agunnaryd (the home town of Ingvar)
BUSINESS DESCRIPTION
Nature of the Organization: * Scandinavian modern style furniture and accessories * International company that designs and sells ‘ready-to-assemble’ furniture * World’s largest furniture retailer * IKEA was founded in 1943 by 17-year-old Ingvar Kamprad in Sweden * As of October 2010, the chain has 313 stores in 38 countries, most of them in Europe, North America, Asia and Australia * Many stores include restaurants serving traditional Swedish food * The IKEA corporate structure is divided into two main parts: operations and franchising * The net sales of IKEA group amounted to €21.846 billion (none of the profit is taxed)
References: IKEA gives UNICEF $48 mln to fight India child labor - February 2009 Preventing child labor – IKEA Website UNICEF and IKEA mark ten years of collaboration to protect children 's rights and prevent child labor – June 2010 Bartlett, Christopher A., Vincent Dessain, and Andres Sjoman. "IKEA 's Global Sourcing Challenge: Indian Rugs and Child Labor (A)." Harvard Business Review (2006). Print Bartlett, Christopher A., Vincent Dessain, and Andres Sjoman. "IKEA 's Global Sourcing Challenge: Indian Rugs and Child Labor (B)." Harvard Business Review (2006). Print Reise, N (2009). Shocking Tell-All Book Takes Aim at Ikea. Bloomberg Businessweek, November 12, 2009. Retrieved from: http://www.businessweek.com/globalbiz/content/nov2009/gb20091112_575818.htm http://www.ikea.com/ms/en_GB/about_ikea/press_room/student_info.html#