How IKEA has incorporated sustainability principles
Introduction
Traditionally, most multinational companies see themselves as competing to survive. However, if this philosophy leads to unwillingness to co-operate, it can be self-defeating. Behind this concept is the idea of supply chain management, which is the network of organizations and individuals who are involved in producing and delivering products to the end users. Thus, a home furnishing company such as IKEA is a part of a supply chain that includes the suppliers of raw materials, component manufacturers, transporters, retail stores and end customers. In the past it was often the case that the relationship with the suppliers was competitive rather than co-operative. It is still the case today that multinational companies will try to achieve cost reductions and quality improvements at the expense of their supply chain partners, but a further dimension has been added sustainability. The aim of this essay is to examine IKEA’s sustainability report and evaluate its sustainability principles. It will explore how IKEA has incorporated its sustainability principles with its suppliers whilst maintaining and improving its strategic competitive advantage in the home furnishing industry.
About IKEA
IKEA is a multinational company that produces home products including disassembled furniture, accessories, bathrooms, and kitchens at retail stores around the world. The company focused on disassembled design furniture at reasonable prices in the beginning and is currently the largest furniture manufacturer in the world. From IKEA’s headquarter in Sweden, it operates more than 265 stores in twenty-five countries and employs one 123,000 (Bartlett & Nanda, 1996, pp. 5-20). IKEA designs all of its products, which are mostly manufactured by independent sources, and sells them under its brand name through its own stores and a number of other distribution channels. IKEA owns almost all strategic business units that it relies on for its production, which is crucial for their
Traditionally, most multinational companies see themselves as competing to survive. However, if this philosophy leads to unwillingness to co-operate, it can be self-defeating. Behind this concept is the idea of supply chain management, which is the network of organizations and individuals who are involved in producing and delivering products to the end users. Thus, a home furnishing company such as IKEA is a part of a supply chain that includes the suppliers of raw materials, component manufacturers, transporters, retail stores and end customers. In the past it was often the case that the relationship with the suppliers was competitive rather than co-operative. It is still the case today that multinational companies will try to achieve cost reductions and quality improvements at the expense of their supply chain partners, but a further dimension has been added sustainability. The aim of this essay is to examine IKEA’s sustainability report and evaluate its sustainability principles. It will explore how IKEA has incorporated its sustainability principles with its suppliers whilst maintaining and improving its strategic competitive advantage in the home furnishing industry.
About IKEA
IKEA is a multinational company that produces home products including disassembled furniture, accessories, bathrooms, and kitchens at retail stores around the world. The company focused on disassembled design furniture at reasonable prices in the beginning and is currently the largest furniture manufacturer in the world. From IKEA’s headquarter in Sweden, it operates more than 265 stores in twenty-five countries and employs one 123,000 (Bartlett & Nanda, 1996, pp. 5-20). IKEA designs all of its products, which are mostly manufactured by independent sources, and sells them under its brand name through its own stores and a number of other distribution channels. IKEA owns almost all strategic business units that it relies on for its production, which is crucial for their
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