...S ustainable sourcing and procurement Sourcing and procurement as driving forces for sustainable business b y Helen van Hoeven, Lean & Green Foreword President Obama recently said that there are only two kinds of car companies: those that sell hybrid cars and those that will sell hybrid cars in the near future. The same is true for sustainability in supply chains. There are companies that source and sell more sustainable products and there are those that will do so in the near future. With a world soon populated by nine billion people and over two billion new middle-class citizens, traditional sourcing and selling will simply be a no. You are either on the pathway to sustainable development or you are out of business. The challenge of sustainability is reshaping the relation ship between business and society. Industry needs to better manage natural resources and significantly lower its global ecological footprint. And companies need to engage much better with suppliers and workers in the emerging and developing economies. The mission of the Dutch Sustainable Trade Initiative (IDH) is to upscale and accelerate the mainstreaming of sustainability in international commodity chains. IDH joins the forces of business, non-governmental organisations, labour unions and governments. We bring diverse stakeholders together in focused and result-oriented sectoral coalitions that implement ambitious improvement programmes. These programmes tackle social, ecological and economical bottlenecks...
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...IKEA WRITTEN REPORT SUMMARY Introduction:............................................................................................................................................ 3 First question: .......................................................................................................................................... 3 IKEA’s business model: ........................................................................................................................ 3 IKEA’s strengths and weaknesses:....................................................................................................... 4 IKEA’s competences: ........................................................................................................................... 5 Summary about IKEA’s successful: ...................................................................................................... 7 Conclusion: .......................................................................................................................................... 7 Second question: ..................................................................................................................................... 7 The drivers of their internationalization: ............................................................................................ 8 IKEA’s internationalization strategy: ................................................................................................... 9 IKEA’s...
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...9-906-415 REV: NOVEMBER 14, 2006 CHRISTOPHER A. BARTLETT VINCENT DESSAIN ANDERS SJÖMAN IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor (B) After more than a decade spent struggling with the issue of child labor, Marianne Barner felt good about how IKEA had responded. But occasionally, she found herself wondering whether the progress the global furniture retailer had made was real and durable. Just as it had in the mid-1990s, in 2005 the company could still find itself on the defensive in dealing with the issue. Even more troubling to Barner was that after 10 years of working to prevent child labor among IKEA’s suppliers— introducing a clear code of conduct, developing internal controls and third-party audits, training its suppliers, supporting their corrective actions, and instituting stiff sanctions against offenders—the company was still finding cases of child labor in its supply chain. The latest issue had been drawn to Barner’s attention by Kaisa Mattson, the head of IKEA’s compliance office in south Asia. Like Barner herself a decade before, Mattson was facing the decision of whether to terminate a relationship with a long-standing major supplier. This one, however, had violated not one but several items in IKEA’s detailed code of conduct, known as “The IKEA Way on Purchasing Products”—or IWAY for short. Venkat Industries was a textile mill with over 10,000 workers, and a recent audit had shown that it had stopped using the water treatment plant it had...
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...IKEA The Impact of Globalisation Definition of Globalisation Globalisation is the process by which organisations or businesses start operations on an international scale by committing facilities and resources in foreign countries. The International Monetary Fund, (IMF) continues to believe that this will lead to global convergence through aspects of trade and transactions, capital and investment movements, migration and the movement of people and dissemination of knowledge. Mission Statement - “to create a better everyday life for the many”. Focus Areas & Goals:- Children: IKEA believe that children are the most important people in the world. By supporting their local communities, they hope to assist in children to achieve their fullest potential through development and learning. IKEA has experience in this area and can make a difference. Environment: “Low Price, but not at any price”. IKEA aim to have a positive impact on the local environment and how their business may impact upon it. Their store effectiveness, is measured on how environmentally responsible they are. (IKEA.com (2012). About IKEA, The IKEA Way) Introduction Ingvar Kamprad was born in 1926 on a farm called Elmtaryd, in the small Swedish village of Agunnaryd. At the young age of just 5, he was already showing that he was to become a successful entrepreneur by selling matches to his parent’s friends and neighbours and within two years was selling further afield by travelling to other villages on...
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...“IKEA – A Long March to the Far East” Global Strategic Marketing Case Study Table of Contents 1 Introduction to the case 2 2 Critically and systematically analyse the global strategic advantages of IKEA 3 2.1 Branding , designer appeal 3 2.2 Critical mass, low cost, low price 3 2.3 Quality, green credentials 3 2.4 Global appeal, local sensitivity 3 3 What were the key challenges that IKEA faced in a) China and b) Japan? 4 3.1 Key challenges faced by IKEA in China 4 3.1.1 Cultural 4 3.1.2 Structural 4 3.2 Key challenges faced by IKEA in Japan 4 4 Critically discuss the marketing strategies used to address the challenges the company faced in China and in other markets. 6 4.1 China 6 4.2 Other markets 7 5 Discuss and justify what IKEA’s marketing strategies should be in the future in these two markets. 8 5.1 China 8 5.2 Japan 8 6 Conclusions 9 7 Bibliography 10 1 Introduction to the case From humble origins in the woods of Sweden in 1926, IKEA has developed into a major retail experience in 41 countries / territories around the world, with a current turnover of €23.1 Billion (IKEA, 2010). This case study explores the establishment and development of IKEA’s retail ventures in China and Japan – its first moves outside westernised countries and its first significant retail activity in Asia, despite substantial sourcing activity in the region, and discusses how IKEA might continue its market development...
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...Author Author Strategic Marketing Plan for IKEA in INDIA [Document subtitle] Strategic Marketing Plan for IKEA in INDIA [Document subtitle] Contents Introduction 2 About IKEA 2 1.0 Analysis of Indian Market 3 1.1 Micro Analysis 3 1.1.1 PESTEL Analysis 3 1.2 Micro Analysis 4 1.2.1 SWOT Analysis 4 1.3 Impact on Hofstede Culture Dimension 5 a) Collectivism vs Individualism 6 b) Femininity vs Masculinity 6 c) Avoidance of Uncertainties 6 d) Power Distance 6 1.4 Porter’s Diamond Model 7 2.0 Global Marketing Objective 7 2.1 Porter’s Generic Strategy Mix 8 2.2 Ansoff’s Marketing Strategies 8 3.0 Mode of entry 9 4.0 7 P’s of Marketing 10 a)Product 10 b) Process 10 c) Price 10 d) Physical evidence 11 e) Place 11 f) People 11 g) Promotion 11 References 0 List of Figure Figure 1: SWOT Analysis 5 Figure 2: Hofstede Dimensions 7 Figure 3: Comparison of Entry Mode 9 Introduction India is developing country, populated with 1.2 billion people. India’s economy is of very worthwhile. The current analysis shows India is expected to be considering in Top 5 economies in the world. Due to powerful economic development in past few decades, the living standards of Indian nation are improved and improving day by day. The people of India are establishing themselves in the field of information technology and in other industries. They also step up in urbanization and trend of using foreign band has increased much. The retailing...
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...9-906-414 REV: NOVEMBER 14, 2006 CHRISTOPHER A. BARTLETT VINCENT DESSAIN ANDERS SJÖMAN IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor (A) In May 1995, Marianne Barner faced a tough decision. After just two years with IKEA, the world’s largest furniture retailer, and less than a year into her job as business area manager for carpets, she was faced with the decision of cutting off one of the company’s major suppliers of Indian rugs. While such a move would disrupt supply and affect sales, she found the reasons to do so quite compelling. A German TV station had just broadcast an investigative report naming the supplier as one that used child labor in the production of rugs made for IKEA. What frustrated Barner was that, like all other IKEA suppliers, this large, well-regarded company had recently signed an addendum to its supply contract explicitly forbidding the use of child labor on pain of termination. Even more difficult than this short-term decision was the long-term action Barner knew IKEA must take on this issue. On one hand, she was being urged to sign up to an industry-wide response to growing concerns about the use of child labor in the Indian carpet industry. A recently formed partnership of manufacturers, importers, retailers, and Indian nongovernmental organizations (NGOs) was proposing to issue and monitor the use of “Rugmark,” a label to be put on carpets certifying that they were made without child labor. Simultaneously, Barner...
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...CHAIN MANAGEMENT TERM PAPER ON IKEA’S SOURCING, DISTRIBUTION STRATEGY AND ITS GREEN SUPPLY CHAIN MANAGEMENT BY: SUBMITTED TO: KANIKA MURARKA Dr. P R S SARMA 1226113122 MBA-IB IIIrd TRIMESTER INTRODUCTION IKEA Group (IKEA) is a global retailer of Scandinavian designed furniture and accessories founded in Sweden in 1943. It has operations in 44 countries across Europe, North America, Asia and Australia and is headquartered in Delft, Netherlands. It employs 13000 people and sells 9500 home furnishing products in 298 retail stores worldwide. IKEA recorded revenues of $36101.5 million during the financial year ended in August 2012, an increase of 9.8% over 2011. IKEA offers a range of furniture for living rooms, bedrooms, kitchens and children’s rooms. Its emphasis on providing home furnishing products at low prices has been the main reason for the widespread customer acceptance of its products which, in turn, has facilitated its growth in various geographies. The company designs, manufactures, transports, sells and assembles its merchandise to minimize cost at each level. To help keep prices low, the group ensures that production equipment and raw materials are used efficiently. Customer involvement also contributes to low prices. IKEA relies on customers to choose, collect, transport...
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...Case 2: IKEA DESIGN & PRICING Submitted By: Team Samyeong Arcedo, Lloyd L. ● Ladja, Johnraja-Zaid M. ● Mendoza, Sheila Mozenda C. ● Pangilinan, Jayson E. I. Problem Statement Given IKEA’s success in the global market, how can it ensure continued success in the business? II. Case Analysis What are IKEA's competitive priorities? Describe IKEA's process for developing a new product. Cost leadership and an exceptional supply chain management are IKEA’s major competitive advantage. With the principle of “low price with meaning” IKEA is able to incorporate cost minimization in every process of developing a product that are modern, functional and a true value for money. What are additional features of the IKEA concept that contribute to creating exceptional value for the customer? Aside from creating chic functional products at a low cost, IKEA is also keen to reducing negative impact of products in the health of its customers and the environment. Inbound and outbound logistics also contributes in making IKEA products affordable and available to its customers. What would be important criteria for selecting a site for an IKEA store? IKEA stores and distribution areas should be close to shipping, rail and truck routes to allow a faster delivery response time which also translates to lower logistics costs. A market study should also be done to align IKEA’s array of products with customer needs. Study may include information about the location, cultural background...
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...Project Management Case Studies: IKEA and Timbuk2 Table of Contents Case I: IKEA Design and Pricing 3 Case Summary: 3 Key Terms: 3 Case Questions 5 Conclusions 9 Case II: The Tao of Timbuk2 9 Case Summary: 9 Key Terms: 10 Questions: 11 Conclusions: 15 Bibliography 16 Case I: IKEA Design and Pricing Case Summary: IKEA is a Swedish retailer that dominates the home market in 32 countries and is currently expanding in the United States. The success of the company is providing low cost products that include function, modern design, environmental considerations and healthy manufacturing conditions. IKEA designs its products, manufacturing, and distribution systems with the target price in mind. IKEA’s processes and corporate mantras feel unique and cheerful. Both customers and employees count on the company to operate responsibly. IKEA makes customers feel like they are living well even though they aren’t paying for premium product. There is a great deal to learn from its operations and management. The company’s goals have been incorporated into the product design process that IKEA uses. Key Terms: • Triple bottom line – A business strategy that includes social, economic and environmental criteria. IKEA is an example of a company that judges itself by the triple bottom line. While it strives to do good business, it includes a business and operating model designed to minimize the impacts on the environment. The company markets its philosophy...
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...approach to the world? IKEA in China Ulf Johansson Department of Business Administration, Lund University, Lund, Sweden, and Standardised approach to the world 199 ˚ Asa Thelander Department of Communication Studies, Lund University, Helsingborg, Sweden Abstract Purpose – The purpose of this paper is to analyse the marketing strategy in China of the furnishing retailer IKEA in the context of standardisation and adaptation of marketing activities. IKEA’s strategy in China is compared to its corporate strategy throughout the rest of the world. Design/methodology/approach – The four P classifications are used as a framework to compare the central marketing strategies of IKEA with marketing strategies used in China. The paper builds on both primary and secondary data. Interviews with senior managers at IKEA are conducted and studies on business and retailing in China are used. Findings – The marketing strategies used by IKEA in China are found to be different from the standardised strategies it uses throughout the rest of the world. Several of the changed strategies are central to the business concept of IKEA. Research limitations/implications – The present paper shows the challenges for a standardised marketing concept and its implications. Originality/value – The paper provides, in the context of the standardisation and adaptation of marketing activities, a more nuanced and up-to-date picture of the strategies used by IKEA compared to previous studies. Keywords Retail management...
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...Case study : How IKEA adapted its strategies to expand & become profitable in China Executive Summary: IKEA is known globally for its low prices and innovatively designed furniture. In China, however, it faced peculiar problems. Its low-price strategy created confusion among aspirational Chinese consumers while local competitors copied its designs. This case study analyses how IKEA adapted its strategies to expand and become profitable in China. It also assesses some lessons the company learnt in China that might be useful in India, where it plans to open its first store by 2014 and 25 stores in 10 to 15 years. Swedish furniture giant IKEA was founded by entrepreneur Ingvar Kamprad in 1943. He began by selling pens, wallets and watches by going door to door to his customers. When he started selling his low-priced furniture, his rivals did everything to stop him. Local suppliers were banned from providing raw material and furniture to IKEA, and the company was not allowed to showcase its furniture in industry exhibitions. What did IKEA do? It innovated to stay in business. It learnt how to design its own furniture, bought raw material from suppliers in Poland, and created its own exhibitions. Today, IKEA is the world's largest furniture retail chain and has more than 300 stores globally. In 1998, IKEA started its retail operations in China. To meet local laws, it formed a joint venture. The venture served as a good platform to test the market, understand local needs...
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...strategies in Sweden, the UK and China ˚ Steve Burt a, Ulf Johansson b,n, Asa Thelander c a University of Stirling, Institute for Retail Studies, Stirling Management School, Stirling FK9 4LA, Scotland, UK Department of Business Administration, Lund University, P.O. Box 7080, SE-220 07 Lund, Sweden c Department of Communication Studies, Lund University, Campus Helsingborg, PO Box 882, SE-251 08 Helsingborg, Sweden b a r t i c l e in fo Available online 29 September 2010 Keywords: IKEA Retail internationalisation Retail marketing mix Standardisation Sweden the UK China abstract IKEA is often cited as an example of a ‘global’ retailer which pursues a similar ‘standardized’ approach in every market. This paper systematically assesses the degree of standardisation (and adaptation) of four commonly identified retail marketing mix activities – merchandise, location and store format, the selling and service environment, and market communication – within three countries. These countries – Sweden, the UK and China – represent different cultural settings and are markets in which IKEA has been operating for different lengths of time. The data upon which the comparison is based was generated from personal interviews, in-country consumer research, company documentation and third party commentaries. The conclusions drawn suggest that whilst IKEA operates a standardized concept, degrees of adaptation can be observed in customer facing elements, and in the supporting ‘back office’ processes...
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...Standardized marketing strategies in retailing? IKEA’s marketing strategies in China, Sweden and the UK Steve Burt University of Stirling Department of Marketing, Institute for Retail Studies STIRLING FK9 4LA, Scotland, the UK. Ulf Johansson* *Contact author Department of Business Administration Lund University P. O. Box 7080 SE-220 07 Lund, Sweden e-mail:ulf.johansson@fek.lu.se Åsa Thelander Department of Communication Studies Lund Universitety, Campus Helsingborg, P O Box 882 SE-251 08 Helsingborg, Sweden Paper accepted for presentation at the 1st Nordic Retail and Wholesale Conference in Stockholm (Norrtälje), 6-7/11, 2008 Abstract IKEA is rumored to be a very standardized retailer, i.e., a certain set of marketing strategies is used that are the same around the world. This indeed sets IKEA, operating on markets in Europe, US as well as Asia and Australia, apart among international retailers. Often the theoretical conclusions in international marketing literature, as well as empirical evidence, argue convincingly for the more adaptation (to different markets) in different national markets. But is IKEA so standardized in marketing strategies? So far there are quite few, and very dated, empirical studies of IKEA marketing strategies (yet many refer to IKEA as having a standardized marketing strategy). Here marketing activites are conceptualized to concern: Merchandise - putting together an assortment of products (e.g., national and retailer brands, pricing and pricing...
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...corporate strategy…………………………. 2.1 IKEA business and corporate strategy 2.2 Micheal Porter’s Five Forces Model 2.3 IKEA as a competitive advantage Chapter 3 Why IKEA failed in USA………………………………….. 3.1 Cause of the failure 3.2 Different management styles in USA 3.3 Different consumer decision process 1.0 INTRODUCTION 1.1 Scope 1.2 Objective 1.3 IKEA Company Background IKEA is a Swedish furnishing company and was founded by Ingvar Kamprad 1943. It started as a one-man mail order company in a farming village in Southern Sweden called Smaland. (IKEA, 2011a) Today IKEA has become a big international company which has stores in 44 countries worldwide. The IKEA Group has grown into a major retail experience with 123,000 co-workers and is generating annual sales of more than 21.5 billion Euros. (IKEA, 2011b). The sales growth is shown in Appendix 1. The IKEA concept started in the 1950’s with catalogue marketing combined with a showroom where customers could see and touch IKEA products. The company’s three distinct features were function, quality and low price. Problems with suppliers led the company to start purchasing from foreign producers in Eastern Europe. During the 1060’s the concept was taken even further by introducing the warehouse principle. A huge store in Stolkholm was opened where customers picked the products from the shelves themselves. IKEA turned a capacity problem into a new way of...
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