Renesas Electronics And The Automotive Microcontroller Supply Chain Harvard Case Solution

Home >> Finance >> Renesas Electronics And The Automotive Microcontroller Supply Chain

Renesas Electronics And The Automotive Microcontroller Supply Chain Case Study Solution & Analysis


Renesas Electronics And The Automotive Microcontroller Supply Chain Case Study Analysis is a worldwide business in Sweden. It is generally a home providing company founded by Ingvar Kamprad in 1943. He named the company at the age of 17 when he started his very first mail-order company. It was named as IKEA by a combination of terms relating to his individual life from his personalizes to his household farm i.e. Ignvar Kamprad Elmtaryd Agunnaryd. He started his vision to make true by offering his some items acquired by a cheap source for the regional sellers by newsletter ad. In 1948, by the additional advertisement in the newsletter about the furniture has matched the criteria with its rivals. It has actually resulted in renounce the items sale and begin with furnishings. For the consumer satisfaction and lower the rate of returns, he deliberately opened a store in an Almhult called municipality near his hometown. In the future, the small newsletter advertisement transformed into a catalogue.

Since 1950 to late 1990s, it has actually made incredible development in both the profits as well as in broadening of the business. Initially, it had one store while in the late 1990s it has more than 100 stores residing in numerous countries( see Exhibition 1). The business was growing so well in competitors with leading rivals in the market. The rivals due to declined sale threatened the suppliers of IKEA to not take orders at low rates. In 1961, IKEA contracted with a lot of the factories producing furniture and thus it once again created low expenses. On the other hand, Renesas Electronics And The Automotive Microcontroller Supply Chain Case Study divided its store in a number of departments like inexpensive price cafeteria, kids play-area, as well as a Sweden Look for the cuisines making it a popular exporter of food. Over a duration of time, the product range was expanded varying from carpets, floorings, lights to different item line required in furnishing house.

The motive of the company was to sale quality items with sensible prices with variation in items globally based on a vision to produce a better way of life for nearly everyone. Every year, the company celebrates an anti-bureaucrat week to establish better contact in between the consumers and providers.
Executive 0Summary
In the mid duration of 1990s, IKEA has a broad working networking with about 70 countries tracking down its products about 11,200. When there were eco-friendly issues emerging about IKEA's items all at once the issuance on the child labor emerged. Due to this factor, Renesas Electronics And The Automotive Microcontroller Supply Chain Case Study Help popularity reduced dropping the 20% of its sale in Denmark.

Key Gamers.

There are two key gamers in this case one is IKEA Company and other is its providers. IKEA's technique is to outsource its product making to suppliers. These suppliers are generally third party and based throughout the world.


There is negative effect of these concerns on income of the business and likewise track record of the company. They desired Renesas Electronics And The Automotive Microcontroller Supply Chain Case Study Solution to be socially accountable and desired that it did not have any connection with kid labour or any other environment problem. IKEA strategies also did not work well adequate to resolve this problem (see Exhibit 3).

Approaching Problem of Child Labour.

IKEA strategy is to maintain high level of social responsibility due to the fact that it is one of the considerable catalyst in success of company. IKEA is worried on kid labour issue and other ecological problems to support this method.( Naidu & Ramaiah, 2006) Additionally, Renesas Electronics And The Automotive Microcontroller Supply Chain Case Study Solution was also encouraged by Swedish Conserve the Kid company to act "in the best interest of child".

Reaction to German manufacturers on Video Program:
Porter's 5 Forces Analysis
In reaction to the invite of German manufacturers for IKEA, the invitation needs to need to be accepted. The first foremost thing to think about is that the documentary is made by a German company. It is not compulsory to accept the invite and be part of the live discussion but it is of important significance. As it supplies Barner to have live conversation throughout on-air programming. It creates a probability to provide much better description of their concerns about their relationship with India. Specifically, Barner can possibly demonstrate her thought of mind with a clear validation letting people understand that for her it is more vital to be more worried about the IKEA track record as she is just responsible for this. It is important to remove the criteria of kid labour however this can potentially refrained from doing by stopping company relate to their partner companies which include the pattern of kid labour. This perception of Barner may assist her in preserving IKEA clear reflection and might likewise lead to more powerful relationship of the companies. It also supplies IKEA to conscious the German producers to eliminate against the kid labour.

As the German Producers had actually just used IKEA to view some of the shots from their documentary. They ought to be requested to let them enjoy the entire film rather of some shots which shows certainly an unclear image of the fact. This may be the strategy of German manufacturers to show themselves right against the accusation but leaving IKEA behind filled with doubts about their relationship with the business of India on the problem of kid labour.

On the contrary, the IKEA has actually been positively portrayed about the problem of Kid labour when the issue was initially put up by the Swedish Television. There are a set of details on child labour by IKEA which was substantially collected by ILO and UNICEF.

As the German producers refused to show their documentary to IKEA prior to it is telecasted simply indicates there wicked objective of point the finger at someone and their relationships with IKEA perhaps. There might a strong contradiction that the IKEA is fearlessly engaged with an organization which utilizes child as their labour and continue their relations to earn earnings with the providers while being aware of the truth.

Barner has a strong point of validation which is their philosophical statement i.e. everyone makes errors but one takes its responsibility. The responsibility of the mistakes taken by anybody is considered as the very best source of pride.Despite of the fact that Renesas Electronics And The Automotive Microcontroller Supply Chain Case Study Analysis was not aware about the growing concern over the child labour in addition to the including kid's as labours by the industries, the providers of the IKEA. Throughout the approval of contract, IKEA began examination against its supplier markets around the globe. The management of IKEA is not scared of accepting its errors if shown in the documentary by German producers. It will accept its error and take procedure to put it right again.

Barner can also create another reason on the inefficient responsibility over social concerns. It is intending to be included with the social issues however has not taken such procedures. In the field of marketing, IKEA is on top with exceptional ideas as well as its attractive products.
Swot Analysis
The concerns of the IKEA is towards leading long term relationships with its network of circulation globally. IKEA is not recently involved in any of the social activities about the rights and issues of each specific working in the industries and making them a good-looking earnings. In future, IKEA will prepare to be part of obligation over the social concerns.

It can be concluded that as per the issue for the business's track record and share of share must accept the invitation and present it valid thoughts just in case if everything in documentary is against the Renesas Electronics And The Automotive Microcontroller Supply Chain Case Study Solution. Particularly, IKEA had started a Structure based upon the concept of protecting rights of child labour and to supply them with complimentary environment to inform themselves. (Barlet, 2006).

Actions on Supply agreement with Rangan Exports:.

Under the IKEA concerns about the most logical and tactical technique in recommendation to the child labour issue need to provide Rangan Exports with another chance to assist them in overcoming this dilemma.

IKEA requires to take some steps in order to identify of the truth. If the proof against the Rangan export holds true hence leading it in the failure on the ethical level which were outlaid by Renesas Electronics And The Automotive Microcontroller Supply Chain Case Study Solution. This clearly suggests that on IKEA, the supplier market leading to contravention on the child labour problem.

Subsequently, IKEA works with a vision of producing better way of life for each individual which is a strong representation for the enterprises to stand for the rights of employees of Rangan Exports. The principle of child labour does not include a single company as a huge network of companies are responsible in putting it ahead. This is one of the most important concern of social concerns and it would be injustice to blame a single one.

Barner can think about two alternatives to solve this issue. Initially, either termination of the agreement with the Rangan Expors on the basis of including kid labour to work after the examinations to be sure about the truth. This brings a risk of losing brand name position and track record if the management of IKEA not decides for the contract termination. This may lead to the monetary decrease state of IKEA by decreased ratio of sale, less appeal of the brand and the concerns over social duties. As it is surely not supported by the residents if any country to include child labour. This alternative is trusted and legal with the policy of IKEA. The primary downside of this alternative is the IKEA deprivation with a worthwhile association and may lead to the ending 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 apparent for the all suppliers that IKEA is strictly against the kid labour and really condemn it. This may have a bad effect on the market reputation of IKEA by the generation of incorrect publicity.

As it is for the second time that IKEA became a victim of kid labour which has significantly damaged its credibility. For this purpose, Barner ought to pursue the aid by ILO and UNICEF along with NGOs which might help Rangan in escaping the requirement to used child labour for the carpets manufacturing. It may pick to spread awareness amongst the locals internationally about the social concerns and how one's life is affected by in terms of social, and ethical worths.

Renesas Electronics And The Automotive Microcontroller Supply Chain Case Study Analysis by the adoption of very first alternative, ends its relationship with thesupplier violation. If lead to the failure then portray a bad effect on all suppliers by the increased power of bargaining and the offense of the policy of IKEA. Furthermore, it can make a charge for the behaviour which is not morally best. Hence, Barner must decide of disuniting with Rangan public. The press should be hired for the statement of their choice with its reason with the summarization of the policy of IKEA on the usage labour of child. She should report all the entire situation of the issue emerged and make certain 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 ought to be fired.

In sum, the company can preserve its track record in the market and in some way can bear the loss produced by one supplier. With the stable track record in the market, Renesas Electronics And The Automotive Microcontroller Supply Chain Case Study Solution will definitely cover up its monetary crisis within a brief time period.
Vrio Analysis
Technique Concerning IKEA's Operations in India

IKEA strategy is generally focus on long term relationship with its providers rather than short-term. This long term technique assists IKEA in getting dependable and competitive supplier source. For long term relationship they used to help their supplier to make full usage of their capacity. For instance, they asked suppliers to supply services and products other than their core products and services. The exact same strategy that was utilized by IKEA in Poland could be obtained.( Harapiak, 2013) The technique was to outsource production of furnishings and not produce by its own. IKEA likewise requires to ensure that they involve public through its marketing actions which must be valuable in comprehending IKEA's objectives.

Their intents ought to likewise be justifying company's policy. Their actions need to likewise be according to Kamprad's view i.e. "produce a much better daily life for lots of people". They think that they can accomplish this objective by offering highest quality items with low cost. However at earlier time Renesas Electronics And The Automotive Microcontroller Supply Chain Case Study Solution had no concentrate on ecological and social problems which likewise contains child labor they used to focus on only one method i.e. offering budget friendly and quality products to consumers. So as time passed they needed to consist of other values too to their focus. That improved focus might help IKEA in enhancing its credibility towards its customers. The new focus included the viewpoint "in the best interest of the child". For that purpose it needs to be make sure that engagements in India would be satisfying the required function too i.e. they did not engage any activity which includes child labor. Bulk of population in India is listed below poverty line so there is culture of kid labor and also kid loan. Parents utilized to allow their children to operate in settlement with loan. Ceasing operations from India would not make sure solution to child labor however likewise unfavorable reputation would be built that IKEA is not taking any reputable action to solve fundamental concern i.e. kid labor.

There would be likewise one other unfavorable impact i.e. difference from public. As there is common view point that big business are constantly selfish and have an interest in only producing revenue and consumers would be thinking that IKEA is one of them. Public has common view that these business must be socially responsible to society as like they are required to be responsible to its shareholders. If IKEA did not take any possible action to fix issue of child labor then it would lead to loss of sales and IKEA's worth too. For a business like IKEA track record loss is big loss since value of company also based on it and also there would be decline in profits and goodwill if there is any reputation loss.

If IKEA think about just sales figure then getting out from Indian market is preferable. Since sales from Indian market just contributes small portion to IKEA's profits. In an economical/capitalistic view threat is more than benefits. However to attain business's long term objective i.e. "to produce a much better daily life for many people" and "in the very best interest of the kid" it is recommended to not get out from Indian market and continue operations in Indian market with taking necessary preventative measures.

IKEA needed to make sure that kid labor is not utilized for their products. For that purpose IKEA needs a system that can monitor whole procedure. As provider has absence of monetary resources to provide education to kids, so IKEA should assist provider economically and provide them monetary aids and ask to balance out by future shipments.

There could be one other solution for this issue that IKEA could install its own production company combined with school. IKEA must run this school by itself and its auditing job should be provided to any other institute like Rugman to make sure it is working appropriately for finest interest of kids.

Renesas Electronics And The Automotive Microcontroller Supply Chain Case Study Solution Should Register to Rugmark.

IKEA believes that every business has its own strengths and weak points. As IKEA has no experience concerning child labor so brand-new staff would be needed for this function. It should sign up to Rugmart becausethey are experienced in this field of kid labor and ask Rugmort to keep track of and develop procedure suggested by Renesas Electronics And The Automotive Microcontroller Supply Chain Case Study Solution. Apart from this there ought to be also random monitoring from IKEA to make certain that required purpose is attained.

Resolving Source of Kid Labor.

Renesas Electronics And The Automotive Microcontroller Supply Chain Case Study Analysis needs to deal with root cause of kid labor in order to support its long term vision. IKEA starting performing its technique in multi ways. If it is discovered that provider did not take any corrective action plan then IKEA would broke contract with that provider and there would be no trade with that specific supplier in future.

Assessment of Renesas Electronics And The Automotive Microcontroller Supply Chain Case Analysis Strategy.

IKEA has dedication to its consumers to supply high quality items with low rates. If IKEA remained in Indian market then it would result in higher expenses for consumers. A customer would not feel comfy when he came to understand that he purchase a carpet which was woven by child but is now getting educated by provider of Renesas Electronics And The Automotive Microcontroller Supply Chain Case Study Help.

It can be concluded from analysis that IKEA had been dealing with problem in under industrialized nations due to the fact that guidelines and regulations of under developed countries are various from establish nations. Due to the fact that a German documentary maker makes documentary of a provider of IKEA that was utilizing child labor for production of items, the main issue that IKEA is facing currently is kid labor. Due to the fact that in this method they would be having chance to defend and explain their case to public, it is concluded that Renesas Electronics And The Automotive Microcontroller Supply Chain Case Study Help must accept invitation to live conversation. Since IKEA has no any knowledge relating to kid labor and Rugmart is expert having knowledge relating to concerns of child labor, it was also concluded that IKEA needs to sign up Rugmart. As IKEA has no experience relating to child labor so new personnel would be required for this purpose. The strategy that is recommended for kid labor is that there ought to be collaboration with providers and motivate suppliers to perform programs for child well-being and education. As suppliers had lack of resources so they must be provided financial aid and asked to balance out by future orders. This method would make complete usage of engaging providers and work together to fix issue of child labor.