Aztek Chocolate Studio Accounting System Software Harvard Case Analysis

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Aztek Chocolate Studio Accounting System Software Case Study Solution and Analysis


Aztek Chocolate Studio Accounting System Software Case Study Solution is a global company in Sweden. It is mainly a house providing business established by Ingvar Kamprad in 1943. He named the business at the age of 17 when he initiated his very first mail-order business. It was named as IKEA by a mix of terms connecting to his individual life from his personalizes to his family farm i.e. Ignvar Kamprad Elmtaryd Agunnaryd. He began his vision to make real by offering his some products acquired by a cheap source for the local sellers by newsletter advertisement. In 1948, by the additional advertisement in the newsletter about the furniture has actually matched the criteria with its competitors. It has led to renounce the items sale and begin with furniture. For the client complete satisfaction and reduce the rate of returns, he purposely opened a shop in an Almhult called town near his home town. Later, the little newsletter advertisement changed into a catalogue.

Because 1950 to late 1990s, it has made incredible progress in both the profits as well as in expanding of business. Initially, it had one store while in the late 1990s it has more than 100 shops living in multiple nations( see Exhibition 1). The business was growing so well in competition with leading competitors in the market. The rivals due to decreased sale threatened the providers of IKEA to not take orders at low rates. In 1961, IKEA contracted with much of the factories manufacturing furnishings and hence it once again developed low costs. On the other hand, Aztek Chocolate Studio Accounting System Software Case Study divided its shop in a variety of departments like inexpensive price snack bar, children play-area, as well as a Sweden Shop for the cuisines making it a popular exporter of food. Nevertheless, over a period of time, the product variety was expanded ranging from carpets, floorings, lights to various line of product required in furnishing house.

The intention of the company was to sale quality items with reasonable prices with variation in products worldwide based on a vision to develop a much better way of life for practically everybody. Every year, the company commemorates an anti-bureaucrat week to establish much better contact between the suppliers and clients. Kamprad believed on the reality that it is only possible to make no mistake while you sleep. The idea of preparing for the future was extremely motivated. In 1986, Kamprad was changed by his Personal assistant who was a skilled individual of the business.
Executive 0Summary
In the mid duration of 1990s, IKEA has a broad working networking with about 70 nations locating its products about 11,200. It worked with practically a larger number of suppliers around 2300 internationally (see Exhibition 2). When there were eco-friendly issues arising about IKEA's items simultaneously the issuance on the child labor emerged. This has actually led the company to deal with the difficult scenario in the upkeep of their relation with suppliers. Due to this factor, IKEA's popularity reduced dropping the 20% of its sale in Denmark. .

Key Gamers.

There are two essential gamers in this case one is IKEA Business and other is its providers. IKEA's strategy is to outsource its item producing to suppliers. These suppliers are usually third party and based throughout the world.


There is negative effect of these issues on earnings of the business and likewise reputation of the company. They wanted Aztek Chocolate Studio Accounting System Software Case Study Solution to be socially accountable and wanted that it did not have any connection with child labour or any other environment problem. IKEA strategies likewise did not work well adequate to resolve this problem (see Exhibition 3).

Approaching Issue of Kid Labour.

IKEA method is to preserve high level of social obligation due to the fact that it is one of the substantial driver in success of company. IKEA is worried on child labour issue and other environmental issues to support this method.( Naidu & Ramaiah, 2006) Furthermore, Aztek Chocolate Studio Accounting System Software Case Study Solution was also encouraged by Swedish Save the Kid organization to act "in the finest interest of kid".

Action to German producers on Video Program:
Porter's 5 Forces Analysis
In response to the invitation of German manufacturers for IKEA, the invitation should need to be accepted. Specifically, Barner can potentially demonstrate her idea of mind with a clear reason letting individuals understand that for her it is more important to be more worried about the IKEA reputation as she is only responsible for this. It also provides Aztek Chocolate Studio Accounting System Software Case Study Analysis to mindful the German manufacturers to battle versus the child labour.

As the German Producers had actually just offered IKEA to see some of the shots from their documentary. They must be requested to let them watch the whole film rather of some shots which shows definitely an unclear picture of the reality. This may be the technique of German producers to show themselves right versus the accusation but leaving IKEA behind filled with doubts about their relationship with the companies of India on the issue of child labour.

On the contrary, the IKEA has been favorably represented about the concern of Child labour when the issue was initially put up by the Swedish Tv. There are a set of information on kid labour by IKEA which was considerably gathered by ILO and UNICEF.

As the German manufacturers declined to reveal their documentary to IKEA prior to it is telecasted simply shows there wicked intent of point the finger at somebody and their relationships with IKEA possibly. There might a strong contradiction that the IKEA is fearlessly engaged with a company which uses kid as their labour and continue their relations to make revenues with the providers while being mindful of the fact.

Additionally, Barner has a strength of reason which is their philosophical declaration i.e. everyone makes mistakes but one takes its obligation. The obligation of the mistakes taken by anyone is considered as the very best source of pride.Despite of the truth that Aztek Chocolate Studio Accounting System Software Case Study Help was not conscious about the growing concern over the kid labour along with the including kid's as labours by the markets, the providers of the IKEA. During the acceptance of contract, IKEA started examination against its provider markets worldwide. The management of IKEA is not afraid of accepting its errors if displayed in the documentary by German manufacturers. It will accept its error and take procedure to put it right again.

Barner can also come up with another validation on the ineffective responsibility over social issues. It is meaning to be involved with the social concerns but has actually not taken such measures. In the field of marketing, IKEA is on top with outstanding concepts along with its distinctive items.
Swot Analysis
The issues of the IKEA is towards leading long term relationships with its network of distribution worldwide. IKEA is not just recently associated with any of the social activities about the rights and issues of each private working in the industries and making them a good-looking revenue. In future, IKEA will plan to be part of obligation over the social issues.

It can be concluded that as per the concern for the business's track record and share of share must accept the invite and present it valid ideas only in case if whatever in documentary is versus the Aztek Chocolate Studio Accounting System Software Case Study Solution. Specifically, IKEA had actually started a Foundation based upon the principle of protecting rights of child labour and to offer them with free environment to inform themselves. (Barlet, 2006).

Actions on Supply contract with Rangan Exports:.

Under the IKEA issues about the most logical and strategic strategy in referral to the child labour problem ought to supply Rangan Exports with another opportunity to assist them in conquering this dilemma.

IKEA needs to take some procedures in order to determine of the reality. If the proof versus the Rangan export is true therefore leading it in the failure on the ethical level which were outlaid by Aztek Chocolate Studio Accounting System Software Case Study Help. This clearly suggests that on IKEA, the provider industry leading to breach on the kid labour concern.

Subsequently, IKEA works with a vision of developing much better lifestyle for every person which is a strong representation for the business to mean the rights of workers of Rangan Exports. The concept of child labour does not include a single business as a huge network of business are accountable in putting it ahead. This is among the most vital problem of social concerns and it would be injustice to blame a single one.

Barner can think about two options to resolve this concern. In the beginning, either termination of the contract with the Rangan Expors on the basis of involving child labour to work after the investigations to be sure about the reality. This brings a risk of losing brand name position and credibility if the management of IKEA not decides for the contract termination. This might result in the monetary decline state of IKEA by decreased ratio of sale, less popularity of the brand and the concerns over social obligations. As it is definitely not supported by the occupants if any nation to consist of kid labour. This substitute is reputable and legal with the policy of IKEA. The primary downside of this replacement is the IKEA deprivation with a worthwhile association and might lead to the ending relations with the sources of carpet by India.

The second alternative is to caution the supplier market with continuation of the relate to a promise to let refrain from doing this error again and surely hinder the child labour. This will assist in maintenance of the healthy association in between the provider and the Aztek Chocolate Studio Accounting System Software Case Study Analysis. This also provides an opportunity to better teach the providers about the disadvantages of the kid labour. This decision is made on the basis of IKEA's self-created policy. This makes obvious for the all suppliers that IKEA is strictly against the kid labour and truly condemn it. This might have a bad impact on the market credibility of Aztek Chocolate Studio Accounting System Software Case Study Help by the generation of incorrect promotion.

As it is for the 2nd time that IKEA became a victim of child labour which has greatly damaged its credibility. For this purpose, Barner needs to pursue the aid by ILO and UNICEF along with NGOs which may help Rangan in getting away the requirement to used child labour for the carpets manufacturing. It may select to spread out awareness amongst the locals internationally about the social issues and how one's life is affected by in regards to social, and ethical worths.

Aztek Chocolate Studio Accounting System Software Case Study Help by the adoption of very first alternative, ends its relationship with thesupplier offense. Then portray a bad effect on all providers by the increased power of bargaining and the infraction of the policy of IKEA, if results in the failure. Furthermore, it can make a charge for the behaviour which is not ethically best. Hence, Barner should decide of disuniting with Rangan public. Journalism needs to be called upon for the announcement of their decision with its factor with the summarization of the policy of IKEA on the usage labour of kid. She must report all the entire scenario of the concern emerged and make certain that all the suppliers are strictly following the guidelines of the contract. If any of the provider discovered in compliance to exploitation of the any of the agreement rule offering labour of kid must be fired.

In amount, the company can keep its track record in the market and in some way can bear the loss developed by one supplier. With the stable track record in the market, Aztek Chocolate Studio Accounting System Software Case Study Help will surely cover its monetary crisis within a brief period of time.
Vrio Analysis
Strategy Concerning IKEA's Operations in India

IKEA technique is basically focus on long term relationship with its providers rather than short term. This long term method helps IKEA in getting competitive and reliable provider source. For long term relationship they utilized to help their supplier to make full usage of their capacity. For example, they asked providers to provide services and items other than their core product or services. The exact same technique that was utilized by IKEA in Poland might be borrowed.( Harapiak, 2013) The strategy was to outsource production of furnishings and not produce by its own. IKEA also needs to make certain that they involve public through its marketing actions which need to be valuable in comprehending IKEA's intents.

At earlier time IKEA had no focus on ecological and social concerns which also contains child labor they used to focus on only one strategy i.e. offering affordable and quality items to customers. That improved focus might assist Aztek Chocolate Studio Accounting System Software Case Study Solution in enhancing its credibility towards its customers. Stopping operations from India would not ensure solution to kid labor however likewise unfavorable track record would be constructed that IKEA is not taking any reputable action to solve fundamental concern i.e. child labor.

There would be likewise another unfavorable effect i.e. dispute from public. As there is common view point that big business are always selfish and are interested in just producing revenue and consumers would be believing that IKEA is one of them. Public has common view that these business should be socially accountable to society as like they are needed to be accountable 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 issue of child labor. For a business like IKEA track record loss is huge loss due to the fact that value of company likewise based on it and likewise there would be decline in profits and goodwill if there is any track record loss.

If IKEA consider only sales figure then getting out from Indian market is more suitable. Since sales from Indian market just contributes small part to IKEA's revenues. In an economical/capitalistic view risk is more than benefits. To achieve company's long term objective i.e. "to produce a much better everyday life for lots of individuals" and "in the finest interest of the child" it is suggested to not get out from Indian market and continue operations in Indian market with taking necessary preventative measures.

Aztek Chocolate Studio Accounting System Software Case Study Help needed to make certain that kid labor is not used for their items. For that function IKEA needs a system that can monitor whole procedure. That system should quickly discover whenever child labor is utilized in any activity. Suppliers must be motivated to supply education to children so children can find out something. For that function, providers would be having monetary issues. As supplier has lack of funds to supply education to children, so Aztek Chocolate Studio Accounting System Software Case Study Solution must help provider economically and offer them financial aids and ask to offset by future deliveries.

There might be another option for this issue that Aztek Chocolate Studio Accounting System Software Case Study Help might install its own manufacturing business combined with school. All monetary needs of that school could be met by profits from that making business. IKEA ought to run this school by itself and its auditing task ought to be given to any other institute like Rugman to make certain it is working appropriately for benefit of kids. (Usman, 2010).

Aztek Chocolate Studio Accounting System Software Case Study Help Should Register to Rugmark.

As IKEA has no experience regarding child labor so new staff would be needed for this function. It needs to sign up to Rugmart becausethey are experienced in this field of kid labor and ask Rugmort to establish and keep track of process recommended by IKEA.

Handling Origin of Kid Labor.

Aztek Chocolate Studio Accounting System Software Case Study Help requires to resolve root cause of kid labor in order to support its long term vision. IKEA beginning performing its method in multi methods. If it is discovered that supplier did not take any restorative action strategy then IKEA would broke agreement with that provider and there would be no trade with that specific provider in future.

Examination of Aztek Chocolate Studio Accounting System Software Case Solution Technique.

Aztek Chocolate Studio Accounting System Software Case Study Solution has dedication to its consumers to supply high quality items with low rates. Their method would make complete use of engaging suppliers and collaborate to deal with concern of kid labor. According to my personal understanding as from investors point of view, business is not utilizing its resources effectively through this method. They would be having hard choice in future from choosing that whether to increase return on investment for shareholders or continue involvement with social responsibilities of Indian and UNICEF. Shareholders would be having negative picture of IKEA due to the fact that of less return of financial investment if is greatly invests for social welfare. Then it would result in higher expenses for customers, if Aztek Chocolate Studio Accounting System Software Case Study Analysis remained in Indian market. Nevertheless disputes of interest for society and management would be fixed. When he came to understand that he acquire a carpet which was woven by kid however is now getting informed by provider of IKEA, a customer would not feel comfy. However he would be feeling more comfy when he familiarized that he purchase a rug on slightly greater price which was not woven through kid labor.

Due to the fact that rules and policies of under developed countries are different from develop countries, it can be concluded from analysis that Aztek Chocolate Studio Accounting System Software Case Study Analysis had actually been facing problem in under industrialized countries. The primary problem that IKEA is dealing with currently is child labor since a German documentary maker makes documentary of a provider of IKEA that was using child labor for production of items. Since in this method they would be having chance to safeguard and explain their case to public, it is concluded that Aztek Chocolate Studio Accounting System Software Case Study Help must accept invite to live discussion. Because IKEA has no any understanding regarding kid labor and Rugmart is professional having knowledge concerning problems of kid labor, it was likewise concluded that IKEA should sign up Rugmart. As IKEA has no experience regarding kid labor so brand-new staff would be needed for this purpose. The technique that is suggested for kid labor is that there need to be collaboration with suppliers and encourage providers to carry out programs for kid welfare and education. As providers had absence of resources so they should be supplied financial assistance and asked them to balance out by future orders. This technique would make full usage of engaging providers and work together to fix problem of child labor.