Reduce Product Counterfeiting An Integrated Approach Harvard Case Solution

Home >> Finance >> Reduce Product Counterfeiting An Integrated Approach

Reduce Product Counterfeiting An Integrated Approach Case Study Solution & Analysis


IKEA is a worldwide business in Sweden. He named the company at the age of 17 when he initiated his first mail-order company. It was called as Reduce Product Counterfeiting An Integrated Approach Case Study Analysis by a mix of terms relating to his individual life from his personalizes to his family farm i.e. Ignvar Kamprad Elmtaryd Agunnaryd.

Since 1950 to late 1990s, it has actually made tremendous progress in both the incomes along with in broadening of the business. At first, it had one shop while in the late 1990s it has more than 100 shops living in multiple countries( see Exhibit 1). The business was growing so well in competition with leading rivals in the market. The rivals due to decreased sale threatened the suppliers of IKEA to not take orders at low rates. In 1961, IKEA contracted with much of the factories making furnishings and therefore it once again came up with low expenses. On the other hand, Reduce Product Counterfeiting An Integrated Approach Case Study divided its shop in a number of departments like cheap rate snack bar, children play-area, in addition to a Sweden Shop for the foods making it a popular exporter of food. Over a period of time, the item range was broadened ranging from carpets, floorings, lights to various product line required in providing house.

The intention of the company was to sale quality products with reasonable costs with variation in products worldwide based upon a vision to produce a better way of life for nearly everyone. Every year, the business commemorates an anti-bureaucrat week to develop better contact in between the clients and providers. Kamprad thought on the reality that it is just possible to make no error while you sleep. The idea of planning for the future was extremely motivated. In 1986, Kamprad was replaced by his Individual assistant who was an experienced individual of the company.
Executive 0Summary
In the mid duration of 1990s, IKEA has a broad working networking with about 70 countries tracking down its items about 11,200. When there were environmental concerns developing about IKEA's items concurrently the issuance on the kid labor emerged. Due to this factor, Reduce Product Counterfeiting An Integrated Approach Case Study Analysis popularity decreased dropping the 20% of its sale in Denmark.

Secret Gamers.

There are 2 key gamers in this case one is IKEA Company and other is its providers. IKEA's technique is to outsource its item manufacturing to suppliers. These providers are normally third party and based throughout the world.


The method of outsourcing has some issues like guidelines and guidelines of these countries. In some cases providers from these underdeveloped nations does not follow required requirements as compare to industrialized countries. These weak guidelines and policies can result in weak environment policies or child labour. There is negative effect of these concerns on profits of the company and also track record of the company. Because most of the company's customers are based in developed countries. These customers have high expectations from Reduce Product Counterfeiting An Integrated Approach Case Study Solution in regards to great quality products with low expense. (Marianne Baxter, 2012) These clients have likewise high expectations from IKEA in element of social duty. They desired IKEA to be socially accountable and wanted that it did not have any connection with child labour or any other environment problem. As IKEA got its supply of carpets mostly for under developed nations like India, Pakistan, Nepal. These under industrialized countries have uncontrolled kid labour. So this is main problem that IKEA is dealing with recently. The business is not managing its providers effectively. Also underdeveloped nations enable child labour due to the fact that of hardship. So company can not depend upon local government for resolving this concern. IKEA techniques also did not work well adequate to resolve this concern (see Display 3).

Approaching Concern of Kid Labour.

IKEA technique is to keep high level of social duty due to the fact that it is one of the substantial driver in success of business. IKEA is concerned on child labour problem and other environmental concerns to support this technique.( Naidu & Ramaiah, 2006) In Addition, Reduce Product Counterfeiting An Integrated Approach Case Study Help was likewise encouraged by Swedish Conserve the Kid organization to act "in the best interest of child".

Action to German producers on Video Program:
Porter's 5 Forces Analysis
In action to the invitation of German manufacturers for IKEA, the invitation must need to be accepted. Particularly, Barner can potentially show her thought of mind with a clear validation letting people know that for her it is more essential to be more worried about the IKEA credibility as she is just responsible for this. It likewise supplies Reduce Product Counterfeiting An Integrated Approach Case Study Analysis to aware the German producers to combat against the child labour.

As the German Producers had actually only provided IKEA to view some of the shots from their documentary. They ought to be requested to let them see the whole movie instead of some shots which reveals certainly an unclear image of the reality. This may be the strategy of German manufacturers to show themselves right versus the allegation but leaving IKEA behind filled with doubts about their relationship with the business of India on the issue of child labour.

On the contrary, the IKEA has actually been positively portrayed about the issue of Kid labour when the problem was initially installed by the Swedish Tv. There are a set of details on kid labour by IKEA which was significantly gathered by ILO and UNICEF. This info really demonstrates the very same viewpoint as same as that of the documentary makers. This will let the producers to perplex about the problematic problem by clear representation of child aid during their labour at the production markets.

As the tv market has fantastic possible to reveal false news as the fact by their exceptional capability to modify any lie into a truth and makes people think on it with no doubts. For that reason, it seems rather difficult for Barnerto assess the documentary before the session. As the German manufacturers refused to show their documentary to Reduce Product Counterfeiting An Integrated Approach Case Study Solution prior to it is telecasted merely indicates there wicked objective of blame someone and their relationships with IKEA possibly. There may a strong contradiction that the IKEA is fearlessly engaged with a company which uses kid as their labour and continue their relations to earn earnings with the suppliers while understanding the fact.

The responsibility of the errors taken by anybody is thought about as the best source of pride.Despite of the fact that IKEA was not conscious about the growing issue over the kid labour as well as the including child's as labours by the industries, the providers of the Reduce Product Counterfeiting An Integrated Approach Case Study Solution. Throughout the approval of agreement, IKEA started examination against its supplier industries around the world.

Barner can likewise create another reason on the inefficient responsibility over social issues. It is meaning to be involved with the social concerns but has actually not taken such measures yet. In the field of marketing, IKEA is on leading with exceptional concepts as well as its captivating items.
Swot Analysis
The issues of the IKEA is towards leading long term relationships with its network of distribution globally. IKEA is not recently associated with any of the social activities about the rights and concerns of each private working in the industries and earning them a handsome revenue. In future, IKEA will plan to be part of duty over the social concerns.

It can be concluded that as per the issue for the business's reputation and share of share should accept the invite and present it legitimate thoughts just in case if whatever in documentary is versus the Reduce Product Counterfeiting An Integrated Approach Case Study Solution. Specifically, IKEA had started a Structure based on the concept of securing 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 concerns about the most logical and tactical method in reference to the kid labour problem should provide Rangan Exports with another chance to help them in conquering this predicament.

IKEA needs to take some procedures in order to identify of the fact. , if the evidence against the Rangan export is real therefore leading it in the failure on the moral level which were outlaid by IKEA.. This clearly suggests that on IKEA, the provider industry resulting in contravention on the child labour issue.

Subsequently, IKEA works with a vision of creating better way of life for every single individual which is a strong representation for the business to represent the rights of workers of Rangan Exports. The idea of child labour does not involve a single business as a huge network of business are responsible in putting it ahead. This is among the most critical concern of social issues and it would be injustice to blame a single one.

Barner can think about 2 alternatives to fix this problem. At first, either termination of the agreement 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 danger of losing brand position and credibility if the management of IKEA not decides for the agreement termination. This may lead to the monetary decrease state of IKEA by decreased ratio of sale, less appeal of the brand name and the issues over social duties. If any country to include kid labour, as it is undoubtedly not supported by the inhabitants. This replacement is legal and reliable with the policy of IKEA. The primary disadvantage of this alternative is the IKEA deprivation with a worthwhile association and may lead to the terminating relations with the sources of carpet by India.

The 2nd alternative is to warn the provider industry with continuation of the relate to a promise to let not do this error again and definitely hinder the child labour. This will help in maintenance of the healthy association in between the provider and the Reduce Product Counterfeiting An Integrated Approach Case Study Help. This also supplies a chance to better teach the suppliers about the disadvantages of the kid labour. Nevertheless, this decision is made on the basis of IKEA's self-created policy. This makes apparent for the all suppliers that IKEA is strictly against the kid labour and genuinely condemn it. This may have a bad impact on the marketplace credibility of Reduce Product Counterfeiting An Integrated Approach Case Study Analysis by the generation of false publicity.

As it is for the second time that IKEA became a victim of child labour which has considerably harmed its credibility. For this purpose, Barner must pursue the help by ILO and UNICEF in addition to NGOs which may help Rangan in escaping the requirement to utilized child labour for the rugs manufacturing. It might pick to spread awareness amongst the homeowners globally about the social issues and how one's life is influenced by in regards to social, and ethical worths.

Reduce Product Counterfeiting An Integrated Approach Case Study Solution by the adoption of very first alternative, terminates 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 outcomes in the failure. Furthermore, it can make a charge for the behaviour which is not morally ideal. Hence, Barner needs to decide of disuniting with Rangan public. Journalism ought to be called upon for the announcement of their choice with its factor with the summarization of the policy of IKEA on the use labour of kid. She ought to report all the entire circumstance of the problem emerged and be sure that all the providers are strictly following the guidelines of the contract. , if any of the supplier discovered in compliance to exploitation of the any of the agreement rule offering labour of kid need to be fired.


In amount, the business can preserve its track record in the market and in some way can bear the loss produced by one supplier. With the steady credibility in the market, Reduce Product Counterfeiting An Integrated Approach Case Study Help will certainly cover its monetary crisis within a short period of time.
Vrio Analysis
Strategy Relating to IKEA's Operations in India

IKEA technique is essentially concentrate on long term relationship with its suppliers rather than short-term. This long term technique helps IKEA in getting trusted and competitive supplier source. For long term relationship they used to assist their provider to make full use of their capacity. They asked providers to offer services and products other than their core products and services. The exact same technique that was utilized by IKEA in Poland might be borrowed.( Harapiak, 2013) The technique was to contract out production of furniture and not produce by its own. IKEA also requires to make sure that they involve public through its marketing actions which ought to be valuable in comprehending IKEA's intents.

Their intents should likewise be justifying business's policy. Their actions need to likewise be according to Kamprad's view i.e. "produce a much better everyday life for many people". They think that they can achieve this goal by providing best quality products with low cost. However at earlier time Reduce Product Counterfeiting An Integrated Approach Case Study Solution had no concentrate on ecological and social issues which also contains kid labor they used to focus on only one method i.e. providing budget friendly and quality items to consumers. So as time passed they required to include other values too to their focus. That enhanced focus could help IKEA in improving its credibility towards its customers. The brand-new focus consisted of the perspective "in the very best interest of the kid". For that function it needs to be make sure that engagements in India would be satisfying the required purpose too i.e. they did not engage any activity which includes child labor. Bulk of population in India is below poverty line so there is culture of kid labor and also child loan. Parents used to enable their children to operate in settlement with cash. Ceasing operations from India would not guarantee solution to child labor but also unfavorable credibility would be developed that IKEA is not taking any trusted action to resolve standard concern i.e. kid labor.

If Reduce Product Counterfeiting An Integrated Approach Case Study Help did not take any possible action to fix problem of kid labor then it would result in loss of sales and IKEA's value too. For a company like IKEA credibility loss is huge loss since value of business also based on it and also there would be decrease in revenues and goodwill if there is any credibility loss.

However if IKEA think about only sales figure then going out from Indian market is more effective. Due to the fact that sales from Indian market just contributes little portion to IKEA's earnings. In an economical/capitalistic view threat is more than benefits. To achieve business's long term objective i.e. "to develop a better daily life for numerous people" 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 needed preventative measures.

Reduce Product Counterfeiting An Integrated Approach Case Study Help required to make certain that child labor is not utilized for their items. So for that function IKEA needs a system that can monitor entire procedure. That system ought to rapidly discover whenever kid labor is utilized in any activity. Suppliers should be motivated to supply education to kids so children can learn something. For that purpose, suppliers would be having financial issues. As supplier has lack of funds to offer education to children, so Reduce Product Counterfeiting An Integrated Approach Case Study Solution ought to assist provider financially and supply them financial aids and ask to offset by future deliveries.

There might be one other service for this problem that Reduce Product Counterfeiting An Integrated Approach Case Study Help might install its own production business combined with school. All financial needs of that school could be fulfilled by earnings from that producing company. IKEA must run this school by itself and its auditing task ought to be provided to any other institute like Rugman to make certain it is working correctly for best interest of kids. (Usman, 2010).

Reduce Product Counterfeiting An Integrated Approach Case Study Solution Needs To Register to Rugmark.

IKEA thinks that every company has its own strengths and weaknesses. As IKEA has no experience concerning kid labor so brand-new personnel would be required for this function. It must register to Rugmart becausethey are experienced in this field of kid labor and ask Rugmort to keep track of and develop procedure suggested by Reduce Product Counterfeiting An Integrated Approach Case Study Solution. Apart from this there must be likewise random tracking from IKEA to make sure that necessary purpose is accomplished.

Resolving Origin of Kid Labor.

IKEA requires to fix source of child labor in order to support its long term vision. For that function kid welfare and education needs to be promoted. There need to be collaboration with suppliers and encourage providers to carry out programs for child well-being and education. As suppliers had absence of resources so they need to be supplied financial assistance and asked then to offset by future orders. This is long term method not short-term service. (Martin, 2013) So it might not be performed by IKEA alone. Reduce Product Counterfeiting An Integrated Approach Case Study Analysis beginning executing its strategy in multi ways. There was partnership in between UNICEF and IKEA. The purpose of this partnership was to provide education to all children who are operating in carpet producing cluster. For example some alternative learning centres were developed for those kids who were not permitted to get education from public schools. Neighborhood well-being was also promoted through this program. Collaboration they likewise partnered with their providers in order to create solution for problem of child labor. There was program developed with supplier. The significant quality of program was audit of providers on regular basis. If there was any kid labor found during audit, corrective action plan would be required. In restorative action plan child labor is needed to be gotten rid of and supplier is required to make up for welfare and education of that child. There would be appropriate follow up from IKEA to make sure that in real needed corrective action plan is implicated. However if it is found that provider did not take any corrective action strategy then IKEA would broke agreement with that provider and there would be no trade with that specific provider in future.

Assessment of Reduce Product Counterfeiting An Integrated Approach Case Solution Technique.

IKEA has dedication to its consumers to offer high quality products with low costs. If IKEA remained in Indian market then it would result in greater expenses for consumers. A customer would not feel comfortable when he came to understand that he acquire a carpet which was woven by kid but is now getting educated by provider of Reduce Product Counterfeiting An Integrated Approach Case Study Solution.

It can be concluded from analysis that IKEA had actually been facing problem in under developed countries since guidelines and regulations of under developed countries are different from develop countries. The main problem that IKEA is dealing with presently is child labor because a German documentary maker makes documentary of a provider of IKEA that was utilizing kid labor for production of items. Since in this method they would be having chance to protect and explain their case to public, it is concluded that Reduce Product Counterfeiting An Integrated Approach Case Study Help ought to accept invitation to live conversation. Since IKEA has no any knowledge regarding child labor and Rugmart is professional having understanding concerning concerns of child labor, it was likewise concluded that IKEA ought to sign up Rugmart. As IKEA has no experience regarding kid labor so new personnel would be required for this purpose. The method that is suggested for child labor is that there ought to be collaboration with providers and motivate suppliers to perform programs for kid welfare and education. As suppliers had lack of resources so they should be provided financial aid and asked to balance out by future orders. This method would make complete use of engaging suppliers and interact to resolve concern of kid labor.