Strategic Management

03 Task Performance ARG

Group 4
Abililla La Angela
Bautista Cathlyn May
Brucal Darwin
Esparrago Jhay Iverson
Lacsamana Aaron
Perez Rose Ann
BSCM3.2A
 IKEA

( Inguar Kamprad, Elmtaryd and Agunnaryd )

I. Company Background

Ingvar Kamprad founded IKEA in 1943. With its headquarters in Delft,

Netherlands, the company has evolved significantly from a small Swedish business to a

reputed home furnishing brands in the world that used to sell initially through a mail-

order catalog. Currently, IKEA operates more than a hundred stores across the globe

with prospects of growth in the future.

IKEA Vision Statement

“To create better everyday life for the many people.”

IKEA Mission Statement

“Our business idea supports this vision by offering a wide range of well-designed,

functional home furnishing products at prices so low that as many people as possible

will be able to afford them.”

Objectives

“To offer a wide range of home furnishing items of good design and function,

excellent quality and durability, at prices so low that the majority of people can afford to

buy them.”
Code of Conduct or Policies regarding the rights of workers

1. Employment must be freely chosen No coercion may be used, including forced labor,

slavery or non-voluntary work in prisons (ILO Conventions nos. 29 and 105). Nor must

workers be asked to make "deposits" or leave their ID as pledges with their employers.

2. No discrimination in employment There will be equal opportunities and equal

treatment regardless of race, color, gender, creed, political views, nationality, social

background or any other special characteristics (ILO Conventions nos. 100 and 111).

3. Child labor must not be used Child labor must not occur. Only workers aged 15 and

over, or over the age of compulsory education if higher, may be employed (ILO

Convention no. 138). Exceptions to this rule may only be made if national legislation

provides otherwise.

4. Respect for the right to freedom of association and free collective bargaining the right

of all workers to form and belong to trade unions shall be recognized (ILO Conventions

nos. 87 and 98). Workers' representatives may not be discriminated against and must

have access to all the work-places necessary to exercise their functions as trade unions

representatives (ILO Convention 135 and Recommendation 143). Employers shall

adopt positive views of the activities of trade unions and an open attitude to their

organizing activities.

5. Adequate wages must be paid Wages and conditions of work must fulfil at least the

requirements laid down in national agreements or national legislation. Unless wage

deductions are permitted by national legislation, they may not be made without express

permission of the workers concerned. All workers must be given written, understandable
information in their own language about wages before taking up their work, and the

details of their wages in writing on each occasion that wages are paid.

6. Working time must not be unreasonable working time should follow the appropriate

legislation or national agreements for each trade.

7. Working conditions must be decent working environments must be safe, hygienic and

the best health and safety conditions must be promoted considering current knowledge

of the trade and any special hazards. Physical abuse, the threat of physical abuse,

unusual penalties or punishments, sexual or other forms of harassment and threats by

the employer shall be strictly forbidden.

8. Conditions of employment must be established employers' obligations to workers

according to national labor legislation and regulations on social protection based on

permanent employment must be respected. Apprenticeships that do not truly aim to

provide knowledge must not be permitted. The parties shall work towards creating

permanent employment.

II. Corporate Social Responsibility

IKEA, a renowned Swedish furniture company, has also started to use the Triple

Bottom Line. The company published its goals for 2030 focusing on three main areas

under what it called “planet and people positive” when where; healthy and sustainable

living, circular and climate positive, and fair and equal. This is an example of a business

that can make a big impact if it can reach its goals as it currently uses1% of the global

production of woods and cotton.

Planet

Their KLIPPAN sofa to promote simply buying new covers instead of a new sofa.

It does need to be said that Ikea’s business model is still based on low-cost - high-

volume sales, so it will be interesting how they meet this challenge of product life

extension when the temptation to purchase a new low-cost item instead of repairing an

old one is still so appealing. 100% commitment to sustainable cotton and since

September 1, 2015, the company claims that all the cotton used for IKEA products

comes from more sustainable sources.

People

Aim to inspire 1 billion people to live healthier sustainable lives within the

boundaries of the planet, which they aim to do via the product range they offer Ensuring

international labor standards are met for all its workers through its supply chain both

direct and indirect, implementing IWAY standard 6 in September 2020.

Profit

Ikea’s annual revenue was 36.9 billion Euros in 2020, while revenue has

previously been the top priority for Ikea shifts in its investments and use of the company

profits is starting to show its commitment to the other two bottom lines in People and

Planet, such as its reinvested those profits into waste materials recycling in 2016,

increased investment in R&D to find more sustainable materials and its investment into

renewable energy and transitioning its fleet to 100% electric.

III. Corporate Governance

They manufacture products using sustainable materials and 91% of their waste is

recycled or incinerated into energy.

IV. Management Lesson Learned

1. Be true to your brand. Image consistency is a huge factor contributing to Ikea

overwhelming success. They maintain their signature style in every one of their 24

countries located, and consumers appreciate that sense of consistency. It's nice to be

able to rely on a brand as your comfort zone. Most small businesses don't have multiple

locations. But there is still much you can do to make your office furniture in-lined with

your waiting area, rugs and knick-knacks laying around the office. The key is bringing a

sense of uniqueness to your office and carrying that all the way through no matter how

big or small your space is.

2. Let the customer be as independent as possible. Part of the appeal of the Ikea

shopping experience is that most of its products are prepared to be assembled by the

customer. Clear instructions are provided. This empowers customers to feel personally

invested in their own products.

3. Appeal to the person, not just the wallet. When you walk into an Ikea store,

merchandise isn't exactly flung at your face. On the contrary, you have to find it. First,

you are greeted with the sight of a wonderful children's play area. A free babysitting

service? How delightful! Walk further, and you'll smell the aromas of a restaurant. Food?

Now, this is a place where you want to stay. Ikea understands the practical and
emotional needs of its customers. Therefore, every person who walks through the door

ultimately becomes a part of their relationship, and that is where the loyalty begins.

4. Be practical. When shopping online, you probably skim over half the useless things

you don't need or think you need. But in an Ikea store, the layout is such that every

single piece of merchandise is put into practical context. Suddenly, that slim bookcase

seems useful after all. See how brilliantly they tucked it in to that corner, just like the one

that you have in your house? See how they arranged those couches? Or that

ornament? Ikea's setup is like a real home, which facilitates the decision-making

process. Handy measuring tape strips and pencils are often set up at every section, so

that you can really make sure things will fulfill your needs.

5. Become a master marketer. Ikea introduced its 2015 catalog with its hilarious book

commercial campaign that sang the praises of an actual paper book. It was a funny

spoof of Apple that resonated with YouTubers worldwide due to its honest and forthright

message. Ikea has a refreshing vibe in terms of its marketing. It retains its clean, no-

nonsense identity while simultaneously staying current and on trend with the ever-

changing needs of customers.

Its promotional techniques are multifaceted, engaging every possible potential client

through various forums such as yearly catalogs, social media campaigns, and eye-

catching advertisements. As an international chain, its promotional content is tailored in

each country to adapt to unique and/or specific needs of different cultures. Most small

businesses don't have big budgets for extravagant design and expansive branding

campaigns. The challenge for small business owners is to be creative with not only your

design but your ability to get there without spending money.

V. Bibliography

https://phuongikea.weebly.com/ikea objectives.html?

fbclid=IwAR2bSe0yWzTdCNayA437xHc3fKB01w9k0uaRGKzvlV3HLcaamgywutGsbwg

https://bstrategyhub.com/ikea-vision-mission-core-values/?

fbclid=IwAR27rkTLsxeHAQ5-GowJjTWyK473vCwY-O1yA_csZxFtFsHhFKsuSYnHq6Y

https://www.greenbusinessmba.com/blog/what-is-the-triple-bottom-line

https://cleanriver.com/8-sustainable-companies-across-the-globe/?

fbclid=IwAR12Mf6y2WySMPIzIMGs-YS4zkMvD20tMiLSx4EmXicZyvb6tgN0so1y_Tk

https://training.itcilo.org/actrav_cdrom1/english/global/guide/ifbww.htm?

fbclid=IwAR2bb7pfSl2Vja9DQi52SxrGxmYpY2wA5vG5umI3iAuUpul1LmWRneiJ-jw