Ikeas Global Sourcing Challenge - 2533 Words

IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor (A) Case Synopsis IKEA is a â€Å"privately held, international home products company that designs and sells ready-to-assemble furniture such as beds and desks, appliances and home accessories† (www.worldisyouroyster.com). The company was established in 1943 by Ingvar Kamprad in Sweden when he was just 17 years old. Kamprad himself, who still owns the private company, is rumored to be the world’s richest man. IKEA is currently the world s largest furniture retailer and arguably the most successful global retailer. Being one of the biggest global retailers, IKEA benefited a lot by the globalization of its business; IKEA’s target market is the global middle class who is†¦show more content†¦He refused to let the IKEA preview the video; however he invited them to send someone to take part in a live discussion during the airing of the program. According to Barner, â€Å"it was immediately clear that this German-produced program planned to take a confrontational and aggr essive approach aimed directly at IKEA and one of its suppliers† (Bartlett et al 8). The refusal to show the movie to IKEA implicit shows that their intention is not to hear about IKEA’s engagement but having someone to blame. The discussion might have an aggressive and confrontational attitude towards IKEA for using a supplier, which employs children and suggesting IKEA a reckless company just caring about profit. Barner should first of all understand the situation thoroughly before taking any steps against Rangan Exports. The Global sourcing always brings with it the social, cultural and regulatory differences which should be dealt with effectively to ensure success in global supply chain. She should help Rangan Exports to avoid using child labor in production of rugs by bringing awareness about such social issues and how it impacts the life of child in physical, mental, spiritual, moral, and social terms. She should even pressurize the supplier for avoiding child labor in production. A live discussion would give IKEA the possibility to explain themselves and their intention concerning their engagement in India. Barner could make her intentions clear as she is feeling thatShow MoreRelatedIkeas Global Sourcing Challenge1241 Words   |  5 PagesIKEA’s Global Sourcing Challenge IKEA, one of the world’s largest specialized furniture retailers, has been presented with a large issue within their operations. In 1995, a German TV station released an investigative report which exposed one of the suppliers for IKEA rugs for exploiting child labor in their factory. A recent addendum was signed by all IKEA suppliers which forbid the use of child labor (Bartlett amp; Sjoman, p. 1, 2006), so this incident has called the company to make an actionRead MoreEssay on Ikeas Global Sourcing Challenge1028 Words   |  5 PagesBarner knows that the broadcast of the German video program is aimed at aggressively confronting IKEA and one of its suppliers, in my opinion she should accept the invitation for IKEA to have a representative appear on the video program. Because the IKEA’s philosophy says that anyone can make mistake but he/she should accept the responsibility of making a mistake. The IKEA made mistake unknowingly by accepting the contract without investi gating the production facility of the supplier. By having a representativeRead MoreIkeas Global Sourcing Challenge: Indian Rugs Essay1242 Words   |  5 PagesThe case â€Å"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 haveRead MoreIkea’s Global Sourcing Challenge: Indian Rugs and Child Labor1548 Words   |  7 PagesIKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor Ethics in Business and Society Professor Stephen Griffith Otis West Tuesday, November 6, 2012 IKEA is the world’s largest furniture store that offers well-designed, functional home furnishing products at low prices. The store offers home furnishings to meet the needs of everyone. The company vision is to create a better everyday life for the many people. Ikea is able to back their vision with their products and prices. In additionalRead MoreIkea’s Global Sourcing Challenge: Indian Rugs and Child Labor2782 Words   |  12 PagesIKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor Jordan de Jong Case Study _ The case I will analyze and discuss in this case study is â€Å"IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor†. I will begin with the vision, values, and strategy of IKEA and an internal analysis ofRead MoreIkea Global Sourcing Challenge2551 Words   |  11 PagesIKEAs 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 industryRead MoreIkea Children Labour6495 Words   |  26 Pages9-906-414 REV: NOVEMBER 14, 2006 CHRISTOPHER A. BARTLETT VINCENT DESSAIN ANDERS SJÃâ€"MAN 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 andRead MoreIkea Supply Chain Analysis4691 Words   |  19 Pagescontrol and continuous product development, which allows keeping its prices competitive and continue its global expansion (Jonsson et al, 2010). In order to have a better understanding, this report will use Porter’s five forces analysis to analyse the organisation and indicate some general potential challenges within IKEA’s supply chain management. Then it will propose the further challenges with a number of practical suggestions on Make-Buy, supplier selection and supply relationship. Porter’s fiveRead MoreCase Study of Ikea1445 Words   |  6 PagesCase Study of IKEA’s Global Sourcing Challenge In 1995, IKEA met a problem that its main supplier, Indian rugs, used the child labor to produce products, although they had signed an attachment of the contract to ban employing child labor. In addition, a German documentary maker was about to broadcast the problem of child labor on German television and also invited an employee from IKEA to have a live discussion in the TV program. Marianne Barner, the leader of IKEA, must find a great solutionRead MoreIKEA Global Sourcing Challenge: Indian Rugs and Child Labor1176 Words   |  5 PagesProposal Case: IKEA Global Sourcing Challenge: Indian Rugs and Child Labor Summary In this case, it is known that IKEA s procurement model is the mode of global sourcing. IKEA products are shipped to the 26 distribution centres from the trade area after procurement, and then delivered to the shopping malls in the world. IKEA s procurement philosophy and assessment of suppliers mainly include four aspects: continuous price improvement; strict supplier performance and service levels;