Decision Making and Challenges in Global Business

DECISION MAKING AND CHALLENGES IN GLOBAL BUSINESS |
DECISION MAKING AND CHALLENGES
IN GLOBAL BUSINESS

DECISION MAKING AND CHALLENGES IN GLOBAL BUSINESS |
Table of Contents
INTRODUCTION...........................................................................................................................1
Strategy used by IKEA for the business environment.................................................................1
Brief explanation regarding the effectiveness of IKEA's CSR stance.........................................3
Brief explanation of the strategy used to deal with the Indian rug issue.....................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business organizations enter the global market facing new challenges go through
environmental, political, and social issues as the opinion and requirements of the customer vary
from each country. The achievements of the organization depend on how successful the manager
achieve to solve global issues. IKEA Founded by Ingvar Kamprad established in 1943 in
Sweden. IKEA Company runs 422 stores in 50 markets around the world. IKEA has 22 Pick-up
and Order Points in 11 countries, 41 Shopping Centres in 15 countries, and 38 Distribution sites
in 18 countries. IKEA offers a wide range of home furnishing items, kitchen and dealing with
home accessories of good design and function, excellent quality, and durability, at low prices so
that most people can afford to buy them. The aim of this report to explain global issues IKEA
face when they enter the international market, as well as the importance of corporate social
responsibility towards the success of the organization. This report explains how IKEA deal with
problem arises regarding child labor while trading with south Asian countries.
The strategy used by IKEA for the business environment.
IKEA is considered as one the most popular organization in Sweden which operates its
business all over the world. IKEA spread its market shares in very large areas within a short
period. However, IKEA faces many issues regarding with environment.
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Transactional issue: IKEA build a strong position in the market within a short period.
1951, the demand for furniture and products offered by IKEA has been increasing, to fulfill the
requirement of the order management department of IKEA not have sufficient resources, to solve
issues by using outsourcing strategy. In which to fulfill the requirement of their customers
outsources material or furniture parts which help in saving time for the organization. They can
easily provide products or furniture to customers (Van Linden, Young, and Birkey, 2019).
International issue: The main policy is to find out a supplier that provides a source at a
reasonable rate. the management department of IKEA deals with some of the local industries of
Poland, they build a strong relationship with the supplier. Poland becomes the largest source of
providing materials or parts of furniture. IKEA uses an effective strategy by maintaining good
communication with the supplier to control cost and provides a product at a reasonable rate in the
market.
To spread its market, IKEA uses a diversification strategy, open a new showroom in
Norway, Stockholm, Switzerland. The management department of IKEA uses an effective
strategy based on identified requirements and customers' preferences apply different strategy and
provides furniture based on the requirement of their target market customer. They used to offer
low price of furniture; it also introduces the self-surviving concept in this country. IKEA used to
launch new products, chairs, tables, buckets to attract target market customers of Switzerland.
Build the best quality of the product: IKEA able to maintain its position in the world
market and attain top position because of applying the vision is to provide the best quality of
furniture to their customer. The manager set the benchmark and standard target which every
department needs to achieve. also took focus on changing rules on production for customers
Believe in democratic style: The managers of IKEA use democratic leadership style,
they took weakly meeting with their employee and took suggestion regarding how to improve the
sale rate, attract the customer or any problem employee face at workplace, condition of the
market, career issues facing at work premises. This will help in creating a positive working
environment. Which useful to attain target department aims within the given time. This also
advantageous to reduce the cost and control wastage of business activities by taking an idea from
employees (Evers, and Andersson, 2019).
Environment-related issue: IKEA has been focused on spreading its market in
worldwide regions. started business in Mid-Asian regions as well as African continent countries.
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