Angel Investments In Europe And Recent Developments In Crowdfunding Harvard Case Solution

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Angel Investments In Europe And Recent Developments In Crowdfunding Case Study Solution & Analysis


Angel Investments In Europe And Recent Developments In Crowdfunding Case Study Help is an international company in Sweden. It is primarily a house providing company founded by Ingvar Kamprad in 1943. He named the company at the age of 17 when he initiated his first mail-order business. It was named as IKEA by a combination of terms connecting to his personal life from his personalizes to his household farm i.e. Ignvar Kamprad Elmtaryd Agunnaryd. He began his vision to make real by selling his some goods procured by a cheap source for the local merchants by newsletter advertisement. In 1948, by the additional advertisement in the newsletter about the furnishings has actually matched the criteria with its rivals. It has actually led to renounce the items sale and begin with furniture. For the consumer satisfaction and decrease the rate of returns, he intentionally opened a store in an Almhult called township near his home town. Later, the small newsletter advertisement changed into a brochure.

Given that 1950 to late 1990s, it has made tremendous development in both the earnings in addition to in broadening of the business. Initially, it had one store while in the late 1990s it has more than 100 stores living in numerous nations( see Exhibition 1). The business was growing so well in competitors with leading rivals in the market. The competitors due to decreased sale threatened the providers of IKEA to not take orders at low rates. In 1961, IKEA contracted with many of the factories producing furniture and therefore it again developed low expenses. On the other hand, Angel Investments In Europe And Recent Developments In Crowdfunding Case Study divided its shop in a number of departments like low-cost price cafeteria, children play-area, as well as a Sweden Look for the cuisines making it a popular exporter of food. However, over a period of time, the product variety was expanded varying from carpets, floor coverings, lights to various product line required in furnishing house.

The intention of the company was to sale quality products with affordable prices with variation in products worldwide based upon a vision to produce a better way of life for nearly everybody. Every year, the company celebrates an anti-bureaucrat week to develop much better contact between the clients and providers. Kamprad thought on the truth that it is just possible to make no error while you sleep. However, the idea of planning for the future was extremely encouraged. In 1986, Kamprad was replaced by his Personal assistant who was a knowledgeable individual of the business.

In the mid period of 1990s, IKEA has a broad working connecting with about 70 nations finding its products about 11,200. It worked with practically a larger variety of suppliers around 2300 internationally (see Exhibit 2). When there were ecological problems emerging about IKEA's products all at once the issuance on the kid labor emerged. This has actually led the company to face the tough circumstance in the upkeep of their relation with suppliers. Due to this reason, IKEA's appeal reduced dropping the 20% of its sale in Denmark. .

Key Players.

There are two crucial players in this case one is IKEA Company and other is its providers. IKEA's technique is to outsource its product producing to suppliers. These providers are typically 3rd party and based throughout the world.


The strategy of outsourcing has some problems like guidelines and regulations of these countries. In some cases providers from these underdeveloped nations does not follow needed requirements as compare to developed nations. These weak rules and regulations can result in weak environment policies or kid labour. There is unfavorable impact of these concerns on profits of the business and likewise reputation of the company. Because the majority of the company's customers are based in industrialized nations. These consumers have high expectations from Angel Investments In Europe And Recent Developments In Crowdfunding Case Study Solution in terms of excellent quality products with low cost. (Marianne Baxter, 2012) These consumers have likewise high expectations from IKEA in element of social responsibility. They desired IKEA to be socially responsible and desired that it did not have any connection with kid labour or any other environment concern. As IKEA got its supply of carpets primarily for under developed countries like India, Pakistan, Nepal. These under developed nations have unchecked kid labour. So this is main issue that IKEA is facing just recently. The business is not managing its suppliers efficiently. Underdeveloped nations allow kid labour due to the fact that of poverty. Business can not depend on local government for resolving this issue. IKEA techniques also did not work well adequate to address this issue (see Exhibition 3).

Approaching Problem of Kid Labour.

IKEA technique is to preserve high level of social responsibility because it is one of the considerable driver in success of company. IKEA is worried on kid labour issue and other environmental problems to support this technique.( Naidu & Ramaiah, 2006) Furthermore, Angel Investments In Europe And Recent Developments In Crowdfunding Case Study Solution was also motivated by Swedish Save the Kid organization to act "in the best interest of kid".

Response to German producers on Video Program:

In action to the invitation of German producers for IKEA, the invite ought to need to be accepted. The first foremost thing to consider is that the documentary is made by a German business. It is not compulsory to be and accept the invite part of the live conversation but it is of essential significance. As it supplies Barner to have live discussion throughout on-air shows. It generates a likelihood to offer better explanation of their concerns about their relationship with India. Particularly, Barner can possibly demonstrate her thought of mind with a clear justification letting individuals know that for her it is more important to be more concerned about the IKEA track record as she is just accountable for this. It is essential to remove the requirements of kid labour but this can possibly refrained from doing by stopping company links with their partner business which include the trend of child labour. This understanding of Barner might assist her in maintaining IKEA clear reflection and might likewise result in more powerful relationship of the business. It also offers IKEA to aware the German manufacturers to eliminate against the child labour.

As the German Producers had just offered IKEA to view a few of the shots from their documentary. They ought to be asked for to let them see the entire film rather of some shots which reveals definitely an unclear picture of the truth. This might be the method of German manufacturers to prove themselves right against the accusation but leaving IKEA behind loaded with doubts about their relationship with the companies of India on the concern of kid labour.

On the contrary, the IKEA has been favorably portrayed about the problem of Child labour when the problem was initially put up by the Swedish Television. There are a set of info on kid labour by IKEA which was considerably gathered by ILO and UNICEF.

As the tv industry has great possible to reveal false news as the fact by their exceptional ability to modify any lie into a truth and makes individuals believe on it without any doubts. It appears quite impossible for Barnerto examine the documentary before the session. As the German producers refused to show their documentary to Angel Investments In Europe And Recent Developments In Crowdfunding Case Study Help prior to it is telecasted merely shows there wicked intent of point the finger at somebody and their relationships with IKEA possibly. There may a strong contradiction that the IKEA is fearlessly engaged with a company which utilizes child as their labour and continue their relations to earn profits with the suppliers while being aware of the fact.

The obligation of the mistakes taken by anybody is considered as the best source of pride.Despite of the truth that IKEA was not conscious about the growing issue over the child labour as well as the including child's as labours by the industries, the providers of the Angel Investments In Europe And Recent Developments In Crowdfunding Case Study Help. Throughout the acceptance of contract, IKEA started examination versus its supplier industries around the world.

Barner can also come up with another reason on the ineffective duty over social concerns. It is meaning to be involved with the social concerns however has not taken such steps yet. In the field of marketing, IKEA is on top with outstanding ideas as well as its appealing products.

The issues of the IKEA is towards leading long term relationships with its network of distribution internationally. IKEA is not recently involved in any of the social activities about the rights and concerns of each specific working in the markets and earning them a handsome earnings. In future, IKEA will plan to be part of duty over the social issues.

Thus, it can be concluded that according to the concern for the company's reputation and share of share should accept the invite and present it valid ideas just in case if whatever in documentary protests the IKEA. Particularly, IKEA had started a Foundation based on the principle of securing rights of child labour and to provide them with complimentary environment to educate themselves. (Barlet, 2006).

Actions on Supply contract with Rangan Exports:.

Under the IKEA issues about the most strategic and logical technique in reference to the kid labour issue must provide Rangan Exports with another possibility to help them in overcoming this dilemma.

IKEA needs to take some procedures in order to figure out of the reality. , if the proof versus the Rangan export is real therefore leading it in the failure on the ethical level which were outlaid by IKEA.. This plainly suggests that on IKEA, the provider industry leading to conflict on the kid labour problem.

Subsequently, IKEA deals with a vision of creating better lifestyle for every single person which is a strong representation for the business to represent the rights of employees of Rangan Exports. The concept of kid labour does not include a single company as a large network of companies are responsible in putting it ahead. This is one of the most important issue of social concerns and it would be injustice to blame a single one.

Barner can consider 2 options to resolve this issue. At first, either termination of the contract with the Rangan Expors on the basis of including child labour to work after the examinations to be sure about the fact. This brings a hazard of losing brand name position and credibility if the management of IKEA not decides for the agreement termination. This might result in the financial decline state of IKEA by reduced ratio of sale, less popularity of the brand and the issues over social duties. As it is surely not supported by the residents if any country to consist of child labour. This replacement is legal and reliable with the policy of IKEA. The primary drawback of this replacement is the IKEA deprivation with a beneficial association and may result in the terminating relations with the sources of carpet by India.

This will help in upkeep of the healthy association in between the supplier and the IKEA. This makes obvious for the all suppliers that IKEA is strictly versus the child labour and genuinely condemn it. This might have a bad impact on the market credibility of IKEA by the generation of false publicity.

As it is for the second time that IKEA ended up being a victim of kid labour which has greatly damaged its credibility. For this function, Barner needs to pursue the help by ILO and UNICEF in addition to NGOs which may assist Rangan in leaving the requirement to used kid labour for the carpets production. It may pick to spread out awareness among the citizens globally about the social issues and how one's life is influenced by in terms of social, and ethical values.

IKEA by the adoption of first option, terminates its relationship with thesupplier offense. If results in the failure then portray a bad effect on all providers by the increased power of bargaining and the offense of the policy of IKEA. The press must be called upon for the statement of their choice with its factor with the summarization of the policy of IKEA on the use labour of kid.

In amount, the business can keep its credibility in the market and somehow can bear the loss developed by one provider. With the stable reputation in the market, Angel Investments In Europe And Recent Developments In Crowdfunding Case Study Solution will surely cover up its financial crisis within a brief period of time.

Strategy Concerning IKEA's Operations in India

IKEA technique is generally concentrate on long term relationship with its providers instead of short-term. This long term technique helps IKEA in getting competitive and trusted provider source. For long term relationship they used to assist their provider to make complete usage of their capability. They asked providers to supply products and services other than their core products and services. The very same strategy that was utilized by IKEA in Poland might be borrowed.( Harapiak, 2013) The technique was to contract out production of furnishings and not produce by its own. IKEA likewise requires to make sure that they include public through its marketing actions which need to be practical in comprehending IKEA's objectives.

Their intentions should likewise be justifying company's policy. Their actions must likewise be according to Kamprad's view i.e. "develop a better daily life for many individuals". They believe that they can attain this objective by providing highest quality products with low expense. However at earlier time Angel Investments In Europe And Recent Developments In Crowdfunding Case Study Analysis had no concentrate on social and ecological issues which likewise consists of child labor they used to concentrate on only one method i.e. offering budget-friendly and quality items to clients. As time passed they required to consist of other worths too to their focus. That improved focus could help IKEA in improving its track record towards its customers. The brand-new focus consisted of the viewpoint "in the very best interest of the child". For that function it requires to be make sure that engagements in India would be fulfilling the required function too i.e. they did not engage any activity which consists of child labor. Bulk of population in India is listed below hardship line so there is culture of kid labor and also kid loan. Moms and dads used to allow their kids to work in payment with money. Discontinuing operations from India would not guarantee option to child labor however likewise unfavorable reputation would be developed that IKEA is not taking any trusted action to fix basic issue i.e. kid labor.

There would be likewise one other unfavorable result i.e. disagreement from public. As there prevails view point that big business are constantly selfish and have an interest in only generating revenue and customers would be believing that IKEA is among them. Public has common view that these companies ought to be socially accountable to society as like they are needed to be responsible to its investors. Then it would result in loss of sales and IKEA's worth too, if IKEA did not take any possible step to solve problem of child labor. For a business like IKEA reputation loss is big loss because value of company likewise based upon it and likewise there would be decline in incomes and goodwill if there is any reputation loss.

If IKEA think about just sales figure then getting out from Indian market is more effective. Due to the fact that sales from Indian market only contributes little part to IKEA's profits.

IKEA needed to make sure that kid labor is not used for their products. For that purpose IKEA requires a system that can monitor whole treatment. As supplier has absence of financial resources to offer education to children, so IKEA needs to assist provider financially and offer them monetary help and ask to offset by future shipments.

There might be one other solution for this problem that IKEA could install its own manufacturing business combined with school. IKEA ought to run this school by itself and its auditing task should be provided to any other institute like Rugman to make sure it is working properly for finest interest of children.

Angel Investments In Europe And Recent Developments In Crowdfunding Case Study Help Ought To Sign up to Rugmark.

As IKEA has no experience concerning kid labor so brand-new staff would be needed for this purpose. It ought to sign up to Rugmart becausethey are experienced in this field of kid labor and ask Rugmort to keep track of and develop process suggested by IKEA.

Resolving Origin of Child Labor.

Angel Investments In Europe And Recent Developments In Crowdfunding Case Study Help requires to fix root cause of kid labor in order to support its long term vision. IKEA beginning executing its technique in multi methods. If it is found that provider did not take any corrective action plan then IKEA would broke contract with that supplier and there would be no trade with that specific supplier in future.

Assessment of Angel Investments In Europe And Recent Developments In Crowdfunding Case Solution Technique.

IKEA has dedication to its clients to provide high quality items with low costs. If IKEA remained in Indian market then it would result in higher costs for customers. A consumer would not feel comfortable when he came to know that he purchase a rug which was woven by kid but is now getting informed by provider of Angel Investments In Europe And Recent Developments In Crowdfunding Case Study Analysis.


The primary problem that IKEA is dealing with currently is kid labor since a German documentary maker makes documentary of a provider of IKEA that was using child labor for production of items. It was likewise concluded that Angel Investments In Europe And Recent Developments In Crowdfunding Case Study Analysis must sign up Rugmart since IKEA has no any understanding regarding child labor and Rugmart is expert having knowledge regarding problems of child labor. As IKEA has no experience regarding kid labor so brand-new personnel would be required for this purpose.