Analizes of a case Study Example | Topics and Well Written Essays - 1250 words

Analizes of a - Case Study ExampleThe company always used outside the box mentation in its crease strategies such as buying idle production time from manufacturers in other industries. One of the reasons for the success of the firm in the article of furniture business was its introduction of self-assembled furniture. This concept help the firm reduce its prices because it eliminated two of the highest cost drivers in the industry which are assembly and delivery. The companys managerial philosophy is to have an open system in which nobody is superior to others. Input from the employees is always welcomed at IKEA. The management process stressed simplicity and anxiety to detail. Being cost conscious was also a part of the business culture of the firm. IKEA penetrated the United States marketplace in 1985. In the 1990s the company was uncovered to bad media when a revelation was made to the public that IKEA was dealing with suppliers in Asia that used child turn over. Stakeholders Ingvar Kamprad Founder of the firm. His values and beliefs are embedded in IKEAs culture. Using child labor goes against everything he stands for. He does not want to hurt the reputation of the company through a child labor scandal. Marianne Barner IKEA business area manager for carpets division. She is responsible for finding a solution to the problem. Shareholders The shareholders of the firm are worried about the problem of child labor because its occurrence go away hurt the image and reputation of the company which will negatively impact the price of the common stocks of the company. Asian children The children population in Asia are at hazard due to employment exploitation by IKEA suppliers. The children are the biggest victims in this scandal. Issues By the mid 1990s the company had grown tremendously. IKEA had 98 stores across 17 countries worldwide. Its leave chain had become extremely complex since the firm had almost 2,300 suppliers. It had become extremely difficul t to monitor the actions of its suppliers. To make things worse those 2,300 suppliers were scattered across 70 countries. The firm was sourcing around 11,200 products. During the 1980s environmental problems occurred with some of the products IKEA sold. In the 1990s a new and extremely serious issue occurred as the company was incriminate of doing business with suppliers that used child labor. Child labor is a growing problem in our society with over 250 million children working in the labor market (Humanium, 2010). IKEA in the 1980s faced new regulations from the Denmark government that redefine the limits of formaldehyde emissions permissible in product building. At concentration above 0.1 mg/kg in air this material caused watery eyes, headaches, burning sensation in throat, and difficult breathing. The company was fined by the government of Denmark and it was heavily criticized by the media. IKEA gross sales in the aftermath of this scandal drop by 20% in Denmark. The company r eacted quickly to the problem by establishing stringent requirement regarding formaldehyde levels. At first the problem was not simply to attend since suppliers bought from sub-suppliers that were exposed to formaldehyde. The firm resolved the problem by dealing directly with glue producing chemical companies. A decade later the firm was once again facing issues with formaldehyde in Germany. Its best selling bookcase series had high levels of