IKEA - Case Study Essay Example for Free

IKEA Case Study Essay Synopsis of the situation IKEA (Ingvar Kamprad Elmtaryd Agunnaryd) is a privately held, international home products company that designs and sells ready-to-assemble furniture, appliances and home accessories. The company is now the worlds largest furniture retailer. IKEA was founded in 1943 by 17-year-old Ingvar Kamprad in Sweden, named as an acronym comprising the initials of the founders name (Ingvar Kamprad), the farm where he grew up (Elmtaryd), and his home parish. Kamprad started the company at his home as a mail order company. He sold goods which he purchased from low priced sources and then advertized in a newsletter to local shopkeepers. In 1948 he added in his catalogue furniture. Furniture was a success so he gave up the small items and focused only on furniture. In 1951 he opened the first display store in nearby Almhult where the customers could preview and inspect products and then order from the catalogue. This was also an immediate success as people travelled even from Stockholm to visit the store. This led IKEA to stop accepting mail orders. Now, the IKEA strategy is to publish a yearly catalogue, distribute it to the clients and encourage them to visit the store name (Barlett, Ghoshal, Beamish, 2008). The sales take off in the late 50s led IKEA to look abroad for new sources of supply as the local industry could not respond to the demand. In 1961, IKEA outsourced production to furniture factories in Poland. Poland became IKEAs largest source and lowered significantly the production costs. This allowed IKEA to reduce its prices even more. The success in Poland led IKEA to adopt a general principle that it should mot own its means of production but should look for suppliers with whom it should develop close long term relationships. Building on the first stores success, the first store in Stockholm opened in 1965. Even before that, in 1963, IKEA operated a store in Oslo. Other  countries followed and today IKEA operates 313 stores in 38 countries, most of them in Europe, North America, Asia and Australia (IKEA, 2010). Some of IKEAs competitive advantages are that the brand is associated with simple, low cost,  stylish products. The concept was furnishing products and house-wares that had wide appeal to a variety of markets and segments, both consumer and the business market exclusively. Both markets were looking for well styled, high quality furniture that reasonably priced and readily available. Also, IKEA developed a model for the business, where it was able to keep costs low. From the customer point of view, they were able to buy low cost furniture, even though they had to assemble and collect the flat-packed furniture from stores. IKEA to was able to reduce costs, as this costly part of the value chain was carried out by the customer. Adding to that, IKEA promoted the Swedish lifestyle. Many people associate Sweden with a fresh, healthy way of life. This Swedish lifestyle is reflected in the IKEA product range. The freshness of the open air is reflected in the colors and materials used and the sense of space they create: blond woods, natural textiles and untreated surfaces. Also IKEA stores promote Swedish food and products. IKEAs low-priced restaurant and grocery shop have made IKEA Swedens leading food exporter. However, global expansion was not without problems for IKEA. During the 1980s environmental problems arose with some of IKEAs products and during the 1990s IKEA was accused that its suppliers were using child labor. In the 1980s the formaldehyde regulations passed in Denmark caused problems to IKEA. After the discovery that some of its products emitted more formaldehyde than the legislation allowed the company was fined. The company responded and established stringent requirements regarding formaldehyde emissions. Even though, the problem did not vanish as in 1992 a German investigation team found that an IKEA bookcase had higher emissions that the ones allowed by the German law. Since then, IKEA has improved its procedures to evaluate the environmental impact of its products. Currently, IKEA uses a tool called the ‘e-Wheel’ to evaluate the environmental impact of its products. The e-Wheel  helps IKEA to analyze the four stages within the life of a product. This also helps suppliers improve their understanding of the environmental impact of the products they are supplying (The Times 100). Next, the issue with child labor arose in 1994 when a Swedish television documentary showed children in Pakistan working at weaving looms. IKEA was one of the several Swedish companies that were mentioned as importers of carpets from Pakistan. IKEA was unaware of the problem and tried to respond by sending a legal team to Geneva  for input and advice from the International Labor. Association(ILO). IKEA discovered that child labor was not illegal in these countries so the only way to handle the problem was by adding a clause for child labor in their contracts and outsource the monitoring of this clause to a third party company. But it seems that this measure was not effective enough, as in 2007, Anders Dahlvig, the multi-nationals Chief Executive Officer, admitted that some of the companys products were still produced using child labor (Wadsworth, 2007). Key Issues and Players The key players in this case are the IKEA company and its suppliers. In order to keep its competitive advantage IKEA outsources its product manufacturing to third party suppliers throughout the world. But, this practice is often the source of many issues. Many times the legislation in these countries does not match the standards and the ethical values of the western developed countries which are the main customer base of the company. This fact can cause issues like weak environmental policies or child labor that hurt the public image of the company. This has direct effect on the companys sales. Problem The main problem that IKEA faces nowadays is the uncontrolled child labor in countries which supply the company with carpets. Child labor in countries like India and Pakistan is a common phenomenon. The company lacks effective ways to control its suppliers in these countries. At the same time, child  labor is socially acceptable in these places as poverty pushes people to find ways to survive. So the company cannot rely on the local authorities for help. Also, any attempts on behalf of IKEA to control this issue didnt seem to succeed. Alternative Solutions A possible solution for controlling the child labor for IKEA is to cancel any contracts with suppliers in countries that do not adopt the convention 138 of ILO, that deals with the child labor issues. This way IKEA will be able to get assistance for child labor issues from local authorities since it will be prohibited by local laws. Another solution would be to come to more strict agreements with the suppliers and launch intensive controls for the effectuation of the agreement. Selected Solution The selected solution is IKEA to enhance its agreements with the suppliers and intensify its controls against child labor. The company should appoint inspectors in these countries that would inspect the suppliers and report the situation on frequent basis Results and Rationale of the Solution The cancelation of the contracts does not seem a rational choice at the moment because it will have a big cost for the company. The company will need to find new suppliers in other countries with higher labor cost and doubtable product quality. This is a move with higher risk and cost that the selected solution. Positive and Negative Results The positive results of the selected solution are that the child labor issues will decrease and the companys profile will be protected. The negative results are that the companys cost will increase as inspection staff will be hired to perform the inspections and some contracts will need to be canceled due to failure to adhere to the conditions of the contract by the suppliers References Barlett, C., Ghoshal, S., Beamish, P. (2008). Transnational Management. Singapore: McGraw-Hill. Building a sustainable supply chain. (n.d.). Retrieved November 27, 2010, from The Times 100: http://www.thetimes100.co.uk/case-studybuilding-a-sustainable-supply-chain110-279-3.php IKEA. (n.d.). Retrieved November 28, 2010, from IKEA: http://www.ikea.com/ms/sv_SE/about_ikea/facts_and_figures/ikea_group_stores/index.html Wadsworth, M. (2007, May 22). IKEA exposed over child Labour and green issues. Retrieved November 27, 2010, from The Latest: http://www.the-latest.com/ikea-slammed-over-child-labour-andgreen-issues

Essay examples --

Over the last few decades, the organizational role of management accountants has changed radically, along with the environment. Many of these changed management accountants undertake more advisory and strategic roles in their organizations. Their work has become more similar to that to business partners who are involved in both the everyday and the long term strategic decision making process. This essay will critically analyze the role of management accountants in the present day, as compared to their more traditional role in previous decades. First a distinction between financial accounting and management accounting must be made. Financial accountants are concerned with having financial systems put in place that allow them to maintain records, perform routine transactions, and produce year end reports (Cook 1995). Management accountants are more involved in using that financial information to improve management of the organization. Management can be defined as involved in â€Å"identifying, presenting, and interpreting information used for formulating strategy, planning and controlling activities, decision taking, and optimizing the use of resources† (Cook 1995). Historically speaking, management accountants have been viewed as â€Å"functional scorekeepers who are preoccupied with the past and reluctant to accept responsibility for decisions† (Parker 2002). The traditional role is one which concentrates on two main areas: supporting management decision-making and monitoring and controlling (Feeney & Pierce 2007). These management accountants focused primarily on the internal aspects of their work places, as well as a more statistical, financial and analytical perspective. Traditionally management accountants were not involved in decisio... ...e involved (Byrne & Pierce 2007), and operational managers may continue to consider the accountants to be in the role of making suggestions rather than decisions. Over the last few decades, the role of the management accountant has changed drastically. Traditionally involved in analyzing past decisions and statistics, present day management accountants have become more involved in forward thinking strategies and actual operational decision making. This leads to management accountants who perform a wide range of activities which might have been unheard of for them in previous years. However, this transition is not necessarily as straightforward as anticipated. These new kind of management accountants must overcome considerable challenges and conflicts in order to achieve the new role that is seen as both necessary and beneficial for the present business environment. Essay examples -- Over the last few decades, the organizational role of management accountants has changed radically, along with the environment. Many of these changed management accountants undertake more advisory and strategic roles in their organizations. Their work has become more similar to that to business partners who are involved in both the everyday and the long term strategic decision making process. This essay will critically analyze the role of management accountants in the present day, as compared to their more traditional role in previous decades. First a distinction between financial accounting and management accounting must be made. Financial accountants are concerned with having financial systems put in place that allow them to maintain records, perform routine transactions, and produce year end reports (Cook 1995). Management accountants are more involved in using that financial information to improve management of the organization. Management can be defined as involved in â€Å"identifying, presenting, and interpreting information used for formulating strategy, planning and controlling activities, decision taking, and optimizing the use of resources† (Cook 1995). Historically speaking, management accountants have been viewed as â€Å"functional scorekeepers who are preoccupied with the past and reluctant to accept responsibility for decisions† (Parker 2002). The traditional role is one which concentrates on two main areas: supporting management decision-making and monitoring and controlling (Feeney & Pierce 2007). These management accountants focused primarily on the internal aspects of their work places, as well as a more statistical, financial and analytical perspective. Traditionally management accountants were not involved in decisio... ...e involved (Byrne & Pierce 2007), and operational managers may continue to consider the accountants to be in the role of making suggestions rather than decisions. Over the last few decades, the role of the management accountant has changed drastically. Traditionally involved in analyzing past decisions and statistics, present day management accountants have become more involved in forward thinking strategies and actual operational decision making. This leads to management accountants who perform a wide range of activities which might have been unheard of for them in previous years. However, this transition is not necessarily as straightforward as anticipated. These new kind of management accountants must overcome considerable challenges and conflicts in order to achieve the new role that is seen as both necessary and beneficial for the present business environment.

Consumer Market Profile Worksheet

Demographic market description: Describe the demographic details of your target market. The following items include general descriptive categories you might identify for your customers. Skip items which are not applicable and add items that are. ; Age range ; Income range ; sex ; Occupation ; Marital Status ; Family size ; Ethnic Group ; Level of Education ; Home ownership ; Other 2. Geographic market description: ; Area served (city, region, nation, etc. ) ; Density (urban, rural, suburban, etc. ) ; Location (mall, strip center, business district, etc. Climate conditions 3. Lifestyle description: What kind of people need or want your product or service? Your natural instincts and experience with customers should give you some sense of what your customers are interested in. A little research can help you identify other aspects of your target market's lifestyle. 3-1 . Cryptographic description: Describe your target market in terms of selections made from the following terms relevant t o your business. ; Technically adept ; Status seeking ; Trend-setting ; Conservative ; Socially responsible ; Environmentally conscious ; Smart shopper ; Family-oriented ;Fun-seeking

Middle Class Family - Free Essay Example

Sample details Pages: 2 Words: 513 Downloads: 8 Date added: 2019/07/29 Category Literature Essay Level High school Tags: Canterbury Tales Essay Did you like this example? Geoffrey Chaucer was born into a middle class family in London during the early 1340s. Hes the father of the English poetry he became a page to an eminent family who received the finest training in good manners. Chaucer is well known for being a government official who served under three kings. Don’t waste time! Our writers will create an original "Middle Class Family" essay for you Create order He spoke Anglo Norman composite and his respectability to a language that would develop into the medium for the worlds greatest bodies for literature. The Canterbury Tales is a bunch of good stories and a snapshot of life in the Middle Ages. Chaucer places the characters on a pilgrimage which is a good setting. They exchanged tales to pass the time along so that everyone in Canterbury would tell people and it came back to London. Chaucer is telling a story on how life was in Canterbury and is using a popular literary device that frames stories. NUNS Nuns are women who served the church were called nuns. Their physical description that they showed you was a shy smile, they have grey eyes, elegant nose, and wore long gowns or tunics. Over the tunic was a scapular which was a piece of cloth with an opening for the head. Some nuns wore a chain around their necks Its also two different types of nuns but this nuns personality was sentimental, pleasant, they have a tender heart, friendly, and well mannered. In the middle Ages, it was common for a woman to become a nun. Nuns prayed, taught young girls, and cared for the poor. They also lived in a small convents which wasnt fair. The daily life of nuns in the Middle Ages was based on poverty, chastity, and obedience they choose the life to live and work under strict routines and were discipline in their life. Nuns were part of the clergy which is the order of rank following the pope who are higher. The nun was introduced as a prioress that always smiles and sang the service divine. She goes to great lengths to show others what she wishes to be, rather than who she is. Chaucer uses the word counterfeit to describe the Nun, whose real name is Madame Eglantine, and indeed much about the Nun is downright false. He describes her as someone who helps herself before she helps others. He also detailed her as if she likes to eat a lot stating she is a little on the bigger side. CONCLUSION The conclusion is the nuns in this tale arent who they seem to be their worldly knowledge for the family and they were concerned for the loved ones. Thus women in reality enable the family to run smoothly and the menfolk to dominate with ease since their worldly needs have been fulfilled by the women. The various women in the tales of the monk similarly touch upon the secular aspect of life. The women are biblical and historical, each of them acting by their impulses and priorities in life. They were in a clergy which Chaucer makes fun of those people involved with the church.