The Wonder from Sweden: Is Ikea's Success Sustainable?

In: Business and Management

Submitted By maxiaoni
Words 355
Pages 2
Name
Course
Professor
Date
DISCUSSION QUESTIONS 1. Looking at IKEA's challenges, which ones do you think pose the greatest threat? Why? The one that faces the great threat is the lack of adequate supply of wood. This is because lack of wood supply implies that the company does not have the potential of expanding globally. Such a situation will occur since it does not have sufficient raw materials to sustain the conduct of its business activities. Moreover, deforestation has become a global issue, which implies that the company may lack carbon credits. As such, the target market may decline as potential customers become sensitive to the global issue of deforestation. 2. How would you address the challenges you identified in Question 1? The problem lack of adequate supply of wood can be solved if the company can engage in environmental activities, which involve planting of trees. This will ensure that the company has the ability to access its own raw materials, as well as from other sources. Further, IKEA should partner in business and environmental activities with companies that produce wood. As such, it will become easy for IKEA to acquire raw materials. 3. Did it surprise you to learn that both a developed country (the United States) and also emerging economies (i.e., China and Russia) are the fastest- growing international markets for IKEA? Does this fact pose any challenges in the way that IKEA ought to compete across the globe? Why or why not It was a surprise. This poses a challenge to IKEA in terms of marketing strategies. This is because there are several other companies, which have identified the potential of the global markets that are competing for the existing customers. Hence, IKEA has to formulate a marketing strategy that is sensitive to cultural differences, which will enable it to thrive in the stiff…...

Similar Documents

Arctic Survival – from Success to Failure

...Arctic Survival – From Success to Failure Contrary to the outcome exhibited by most other groups during the Arctic Survival exercise, our team score (34) was lower than my individual score (64). This is not to suggest that group collaboration is detrimental; in fact, our outcome was unique among the class and of great surprise to the professor and entire class section. To be sure, pooling resources, elaboration of material, and support and motivation, while perhaps more time consuming, typically offer improved results. In theory, this model implies that a team’s collective knowledge can maximize utility and ensure the best outcome given the available information and perspectives. In our case, our group dynamics were such that we did not effectively utilize the resources we had, and consequently pooled a very limited amount of information. Rather than minimizing our risk, we increased it. I attribute much of our group’s failure at this simulation to process loss, which is defined as the problems that arise from lack of effective coordination among group members. A number of factors at play could explain the process loss which led to our counterintuitive results. First and foremost, one must consider the way in which group dynamics impact the overall productivity of group collaboration. Our team consisted of K, R, W, J and myself. K and W were quite opinionated, and in contrast, both R and J were quiet – I did not have a sense of what their true opinions were. K......

Words: 1695 - Pages: 7

Sweden

...Sweden Sweden is a Scandinavian country in northern Europe and it borders Norway and Finland, and is connected to Denmark by a bridge across the Öresund. Sweden is the third largest country in the European Union by area, with a total population of about 9.5 million people. Sweden is also the 55th largest country in the world. The country has a low population density with the population mostly concentrated to the southern half of the country. Sweden’s capital city is Stockholm, which is also the largest city. Sweden has been a member of the European Union since 1 January 1995. Today, Sweden is a constitutional monarchy with a parliamentary democracy form of government and a highly developed economy. The year is divided in four distinct seasons’ with mild temperatures throughout the year. Temperatures vary greatly from north to south. The northern part of Sweden has a colder climate and longer winters than the southern part. However, Sweden is much warmer and dryer than many other places at similar latitude. The highest point is the mountain Kebnekaise. Around 65% of Sweden’s total land area is covered with forest. Sweden has 25 landscapes, based on culture, geography and history. The whole country is divided into three large lands, the northern Norrland, the central Svealand and southern Götaland. Gotland, Öland and Orust are Sweden’s three largest islands, and Vänern and Vättern are the largest lakes. Vänern is also the third largest lake in Europe. Children aged 1-5......

Words: 404 - Pages: 2

Sweden and New Age of Globalization

...Sweden and new age of globalization In the last recent years, world trade had an outstanding growth in domestic product leading to spread more about the word ’’globalization’’. However, the new market’s demand is reason of this development, yet the trade practices reduction that prevent movement of services from one state to another thru World Trade Organization (WTO) had an important impact on this growth in world (Christopher, 2011). In the start, globalization recognized as a solution to insufficiency and assistance to overcome the inadequacy, however, this view has changed after the US Presidential election speech in 2008 and globalization became a concern for both the U.S and Europe stated (Mandelson, 2008). Therefore, challenging those who state that ‘’the boom is not sustainable’’ is what Mandelson attempted to deliver. So in this paper I’m going to evaluate the globalization’s effect on Sweden’s economy & industry and will compare the achievement with Mandelson’s view. Let’s start with he’s opinion on Europe’s social models which are considerably well managed and in favor of globalization compared to the models from the states. Over the last decades, Europe attempted to come up with new social and economic model in order to handle the challenges exposed by the globalization. And one of the countries which could cope successfully with globalization challenges was Sweden by proposing ‘’Swedish model’’. This model defines that ‘’ it is perfectly possible to uphold......

Words: 1330 - Pages: 6

From R.Evolution to Sustainable Development

...FROM “(R)EVOLUTION” TO SUSTAINABLE DEVELOPMENT: CURRENT FEATURES AND PERSPECTIVES ABSTRACT This article aims to address the issue of Sustainable Development (SD) in an evolutionary perspective within its multidisciplinary scope. The complexity of developments for sustainability has frequently proven difficult in its implementation, evaluation and effective communication.It was our intention to provide an outline of the diverse views on the subject, focusing on globalization as a change of attitude towards sustainability.It is a review of terminology associated with the SD and its multiple interpretations.It is referenced the apparent and irrelevant impact of initiatives to solve the economic, social and environmental problem. It emphasizes the influence and importance of strategies and the positioning of SMEs on the way to SD in the policy of act local think global. KEYWORDS Strategy Sustainable development Sustainability, SMEs JERÓNIMO, WINSTON CENSE, Center for Environmental and Sustainability Research, Departamento de Ciências e Engenharia do Ambiente, Faculdade de Ciências e Tecnologia, Universidade Nova de Lisboa, Portugal OLIVEIRA, NUNO GASPAR DE CIGEST, Assistente Instituto Superior de Gestão, Portugal 1. INTRODUCTION “(R)Evolution or Death”, adapted from the revolutionary slogan used and popularized by the Cuban regime, serves as motto for the urgent need to transform our production and consumption systems and our standing towards the environment around us....

Words: 9085 - Pages: 37

Economicentrepreneurship for Sustainable Economicentrepreneurship for Sustainable Economicentrepreneurship for Sustainable Economicentrepreneurship for Sustainable Economicentrepreneurship for Sustainable

...Journal of Sustainable Development Studies ISSN 2201-4268 Volume 2 (2013), Number 2, 197-215 Entrepreneurship for Sustainable Economic Growth in Nigeria Oyelola, O. T. Centre for Entrepreneurship Development, Yaba College of Technology, P.M.B 2011, Yaba, Lagos, Nigeria Ajiboshin, I. O. Centre for Entrepreneurship Development, Yaba College of Technology, P.M.B 2011, Yaba, Lagos, Nigeria Raimi, L. (Corresponding author) Centre for Entrepreneurship Development, Yaba College of Technology, P.M.B 2011, Yaba, Lagos, Nigeria Raheem, S. Centre for Entrepreneurship Development, Yaba College of Technology, P.M.B 2011, Yaba, Lagos, Nigeria Igwe, .C. N. Centre for Entrepreneurship Development, Yaba College of Technology, P.M.B 2011, Yaba, Lagos, Nigeria Abstract. This paper underscores the importance of entrepreneurship as a realistic mechanism for sustainable economic growth in Nigeria considering the experiences of developed nations like the United States and vibrant economies like China and India. The paper discusses that entrepreneurship has been instrumental in economic growth, balanced regional development and job creation in most dynamic economies, where technology is changing at a faster rate and the product lifetime cycle is shrinking. The methodology adopted in this paper is the narrative-textual case study (NTCS); it is a social science research method that relies on the information and data from several sources for problem-solving or problem-identification. The paper...

Words: 5540 - Pages: 23

Ikea’s Global Strategy: Furnishing the World

...IKEA’s Global Strategy: Furnishing the World 2014-2015 submitted by Brian Albanese April 26, 2014 Executive Summary This author has provided an analysis of the IKEA case study found in the Marketing Management textbook. It analyzes the strategies used by IKEA to gain competitive advantage in markets outside of its original market. The report provides a background of the organization, recognizes IKEA’s main markets and examines corporate level strategies by identifying its target market and evaluating its pricing strategies. This case study will further analyze how culture, design, and price play significant roles in determining IKEA’s success. In addition, IKEA’s “global sourcing network of more than 2300 suppliers in 67 countries” (Peter & Donnelly, 2013, p. 411) allows its suppliers to provide furniture of all kinds to its customers. IKEA produced standardized products, however, this international strategy did not work for the United States. Therefore, the company has to take corrective actions. Table of Contents Executive Summary i Situational Analysis 1 Environment 1 Economic conditions and trends 1 Cultural and social values and trends 1 Political and legal issues 1 Technological factors 1 Summary of environmental opportunities and threats 2 Industry 2 Classification and definition of industry 2 Analysis of existing competitors 2 Analysis of potential new......

Words: 3656 - Pages: 15

Globalisation of Clothing Industry in Sweden

...KARELIA UNIVERSITY OF APPLIED SCIENCES International Business Degree Program Swedish Clothing Industry Global Business Environment November 2013 Introduction The distance between people in the world is decreasing. In stores in Sweden we find goods from all corners of the world. We are intertwined in a world of mutual dependences and it is what we now call globalization. Economic globalization is a historic process and the result of human innovation and technological development. The economies in the world are integrating, particularly through trade and financial flows, but globalization can also involve movement of people and labor, as well as knowledge and technology across international borders. This means that countries can specialize and produce what they are best at. Countries across the world wills also have access to more capital, better technology, cheaper imports and major export markets. This does not mean that all countries have access to the benefits of globalization, in the poorest countries, the international community help with contributions. The question is that is globalization a treat or an opportunity? Some believe that the difference between the rich and poor countries only increased with globalization, while others argue that the difference in income or GDP between countries across the world has increased, but it is not the whole truth. Wider measurements of welfare that takes social conditions in the calculation shows those developing......

Words: 1826 - Pages: 8

The Key Success Factors of Ikea

...Success Factors of IKEA 1 The Key Success Factors of IKEA Advanced English Writing 2 Abstract Taking advantage of three mayor cost-cutting strategies, IKEA has been able to maximize its profit and to succeed internationally with its concept. The self-service and do-it-yourself approach to selling furniture is one of the critical success factors IKEA uses to save costs and increase profit margins. Furthermore, it has a complicated company structure, partially in order to avoid taxes, but also to allow for some flexible management decisions to be made, based on the international needs. The third key success factor that can be held responsible for IKEA’s international triumph is its production and ordering system. The company uses recycled materials and wood alternatives in its mass productions, attracting customers from all kinds of layers of society. IKEA Key success factors International franchise Success Factors of IKEA 3 Table of Contents 1. Table of Contents ..................................................................................... 3 2. Introduction .............................................................................................. 4 3. Discussion ................................................................................................ 4 3.1 The Self-Service Approach ............................................................. 4 3.2 Advantageous Tax Planning and Decentralized Management ........ 5 3...

Words: 2040 - Pages: 9

Ikea's Success

...successful global retailers in terms of profitability. IKEA is a home-furnishings company from Sweden. In 2010, IKEA had more than 310 stores worldwide in 38 countries, employed around 127,000 people, and earned revenues of 32 billion euros (Rothaermel, 2013). IKEA has recently shifted from an international strategy to a global-standardization strategy. IKEA has many challenges, but the two that throw up the biggest threats are the ecological factors and rivalry among competitors. Ecological factors concern broad environmental issues such as the natural environment, global warming, and sustainable economic growth. Managers can no longer separate the natural and the business worlds because they are linked (Rothaermel, 2013). Wood is one of IKEA’s main input factors; however, consumers are becoming more sensitive to the issue of deforestation and its possible link to global warming. The issue is that IKEA needs to find low-cost replacement materials for wood. To address this challenge, I would make sure IKEA has a specific team working on finding wood substitutes. Perhaps the team can look into wheat straw sunflower hulls. These are two materials that companies are using to replace hardwood to fabricate cabinets and furniture. Also, particleboard, oriented-strand board (OSB), medium-density fiberboard (MDF), and other composites that were formerly made from wood are now manufactured from agricultural wastes. These new composites can make home furnishings (Lees,......

Words: 454 - Pages: 2

The Wonder from Sweden: Is Ikea's Success Sustainable?

...DISCUSSION QUESTIONS 1. Looking at IKEA's challenges, which ones do you think pose the greatest threat? Why? The one that faces the great threat is the lack of adequate supply of wood. This is because lack of wood supply implies that the company does not have the potential of expanding globally. Such a situation will occur since it does not have sufficient raw materials to sustain the conduct of its business activities. Moreover, deforestation has become a global issue, which implies that the company may lack carbon credits. As such, the target market may decline as potential customers become sensitive to the global issue of deforestation. 2. How would you address the challenges you identified in Question 1? The problem lack of adequate supply of wood can be solved if the company can engage in environmental activities, which involve planting of trees. This will ensure that the company has the ability to access its own raw materials, as well as from other sources. Further, IKEA should partner in business and environmental activities with companies that produce wood. As such, it will become easy for IKEA to acquire raw materials. 3. Did it surprise you to learn that both a developed country (the United States) and also emerging economies (i.e., China and Russia) are the fastest- growing international markets for IKEA? Does this fact pose any challenges in the way that IKEA ought to compete across the globe? Why or why not It was a......

Words: 318 - Pages: 2

Ikea's Global Sourcing Challenge - Indian Rugs

...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,......

Words: 6420 - Pages: 26

Sustainable Fashion Supply Chain: Lessons from H&M

...3390/su6096236 OPEN ACCESS sustainability ISSN 2071-1050 www.mdpi.com/journal/sustainability Article Sustainable Fashion Supply Chain: Lessons from H&M Bin Shen Glorious Sun School of Business and Management, Donghua University, Shanghai 200051, China; E-Mail: binshen@dhu.edu.cn; Tel./Fax: +86-216-237-3621 Received: 15 July 2014; in revised form: 15 August 2014 / Accepted: 19 August 2014 / Published: 11 September 2014 Abstract: Sustainability is significantly important for fashion business due to consumers’ increasing awareness of environment. When a fashion company aims to promote sustainability, the main linkage is to develop a sustainable supply chain. This paper contributes to current knowledge of sustainable supply chain in the textile and clothing industry. We first depict the structure of sustainable fashion supply chain including eco-material preparation, sustainable manufacturing, green distribution, green retailing, and ethical consumers based on the extant literature. We study the case of the Swedish fast fashion company, H&M, which has constructed its sustainable supply chain in developing eco-materials, providing safety training, monitoring sustainable manufacturing, reducing carbon emission in distribution, and promoting eco-fashion. Moreover, based on the secondary data and analysis, we learn the lessons of H&M’s sustainable fashion supply chain from the country perspective: (1) the H&M’s sourcing managers may be more likely to......

Words: 6445 - Pages: 26

Sweden

...14 3.4 Economy 14 3.5 National Culture and hierarchy 15 4. Conclusion 17 References 18   1. Introduction The Kingdom of Sweden; IKEA, VOLVO, forests, lakes, snow, democracy, how is it up there? We all know about how well IKEA is doing, and we all know about Zlatan and Abba… but how do we become equally successful? The demands on Human Resource Management is currently increasing as it has been widely discovered and discussed that it directly affects the economic growth. What do we have to think about when we develop our HR department? In this paper we will analyze the institutional context of Sweden and evaluate what impact they have on the decision making of Human Resource management. As students of Economics and Business it is a vital part of our education to go in depth to actually understand and be able to adapt our theoretical skills in a new country. To do this we will consider the government aspect, with political system and political landscape included and its affect in the context of people management practices. Subsequently, the political economic system and its impact will be reviewed, looking at aspects such as welfare distribution, welfare benefits and unemployment. Closely linked to the aforementioned factors are also employment laws, which have a direct impact on the management practices of HR of any company operating in Sweden. The following section will analyze and evaluate various laws such as employment contract and employment discrimination. The......

Words: 7654 - Pages: 31

Ikea's Success

...------------------------------------------------- Leeds Business School ------------------------------------------------- Corporate Strategy Critically examine how the success of Ikea has been supported by its organisational culture Mona Thorvaldsen, Kate Mulvana, Joan Kawalewale, Tom A. Trosterud, Jodie Evans MA Public Relation Management & MA Business Studies Semester Two Module Leader: Lawrence Bellamy Contents Page No Chapter 1 – Introduction | 3 | | | | | Chapter 2 – Background | 3 | | | | | Chapter 3 - Appraisal | 4 | | | | | Chapter 4 – Analysis | 9 | | | | | Chapter 5 – Conclusion | 14 | | | | | Bibliography | 15 | Executive summary This report examines the corporate culture of the global furniture leader IKEA and discusses the link between Ikea’s culture and its performance. The cultural web is used as a device for breaking up the complexity of organisational culture and for demonstrating that Ikea enjoys a strong and consistent culture. The report identifies synergy between Ikea’s culture and strategy, arguing that culture has given the organisation competitive advantage. Furthermore it points to the complex set of factors influencing performance, and how Ikea’s culture is one of several components in its success-formula. 1.0 Introduction Organisational culture is built on the assumptions and beliefs that construct purpose, guidelines......

Words: 3872 - Pages: 16

Sustainable Procurement

...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......

Words: 9903 - Pages: 40