The implications for IKEA in this debate are that, in the decisions taken, the company has to considerate the impact on brand and image. Innovation within the company always led to savings for customers which only helped increase his consumer following.
Likewise, the interest attracts more and more investments which is targeting this big cake. As he was reducing the costs, once again he reduced his prices.
Should the company stay or should it exit? It would be expensive to have such an operation, however it saves cost compared to terminate contract with Rangan Export in a long term perspective. IKEA sent a legal team to Geneva to seek input and advice from the International Labor Organization on how to deal with the problem and to find out more about the child labor issues.
Furthermore, IKEA could make a proposal about how to prevent such thing happen again in the future and gain experience from learning the lesson. Dropping the supplier could also result in dire consequences since consumers might think that IKEA was running away from the problem. Evaluation of alternatives All the proposed alternatives brings out some pros and cons that will be described in the next paragraphs in order to choose the best option for Ikea in this situation.
That is the reason why IKEA had to look abroad for manufacturers because it was impossible to meet demand with their actual situation.
Computer equipments have to be purchased and maintained regularly. In a competitive world, businesses should start to focus on their core competencies. Rugmark has a bigger power and influence in the child labor issue and is able to do more than Ikea since it is dealing with much more suppliers.
First, the situation of IKEA about this subject is difficult since when a Swedish television declared that one of their suppliers in Pakistan was using children in their factories.
Outsourcing may decrease the quality or fail to realize business value. Moreover, Ikea would be involved in that kind of scandals repeatedly and would lose more and more customers and profits because people do not want to buy from company that encourages child labor.
In those countries, the children are even often used to help to pay the debts of their parents. The film may contains some images that would not give any chance for IKEA to explain. To date, this company has continually offered a wide range of products to meet the growing demands of customers all over the world.
By withdrawing they would not improve the company image and would be seen as a company that is not involves in the well being of the society and that does not take part of a solution for the child labor problem. It attracts numerous customers who are looking for modern designs at good value.
If such principles do conflict, unsatisfactory relationship could possibly occur and lead to an early termination of the contract.
Outsourcing is the process of transfer of management or the day to day function of a business function to an outside service provider. Again, IKEA could set up much stricter and more effective rules to monitor and restrict suppliers. Globalism Global trade agreement would allow many countries to enjoy trade with each other free from most restrictions Regional trade and free trade blocs lower trade barriers among members Major trade blocs: It is important for IKEA to not only focus on eliminating the use of child labor in their supply chain, but to also engage in broader action to address the root causes of the child labor issue as save the Children in urging.
Due to the business globalization, the global market brings more opportunities and creates more profits to the companies which invest in.IKEA Global Sourcing Case Study Essay Sample.
IKEA is being forced to make a difficult decision after a German documentary maker announced the prevalence of children working at looms at Rangan Exports, a major supplier of the furniture company.
IKEA s Global Sourcing Indian Rugs and Child Labor 1 How should Marianne Barner respond to the invitation for IKEA to have a representative appear on the. 1. How should Marianne Barner respond to the invitation for IKEA to have a representative appear on the upcoming broadcast of the German video program?
IKEA’S global sourcing challenge: Indian rugs and child labor; IKEA’S global sourcing challenge: Indian rugs and child labor IKEA’S global sourcing challenge: Indian rugs and child labor.
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Below is an essay on "Ikea Global Sourcing Challenge" from Anti Essays, your source for research papers, essays, and term paper examples. IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor Executive Summary Ingvar Kamprad founded IKEA in the early s and served as CEO until By the mids the company was the world’s.
IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor Ikea is a multinational global leader in the home furnishing industry. Founded as a family.Download