IKEA - Outsourcing Strategy and Sustainability Initiatives (Other (Not Listed) Sample)

IKEA – OUTSOURCING STRATEGY AND SUSTAINABILITY INITIATIVES
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Abstract…………………………………………………………………………………… PAGEREF _Toc39733644 \h 3
Introduction……………………………………………………………………………….. PAGEREF _Toc39733645 \h 4
Outsourcing……………………………………………………………………………….. PAGEREF _Toc39733646 \h 5 - 8
Awarding a contract to suppliers…………………………………………………...........8-12
Sustainable practices and challenges……………………………………………………...12-18
References…………………………………………………………………………………....19-22
Appendices……………………………………………………………………………………23-27
Abstract
Over the years, IKEA has fought to achieve its sustainability goals by putting in place many initiatives despite major challenges and competition from plastic industries. This report provides IKEA's sustainable imitative through analyzing its sourcing and partnership practices. It describes the advantages and challenges IKEA faces in the sourcing practice and details the strategies IKEA uses to award a contract to suppliers. This is followed by a discussion of the issues including pricing, capacity, sustainability aims and management attitudes that suppliers must accommodate to enter in partnership with IKEA, supported by appropriate research. All these need to align to IKEA’S value chain and conform to IWAY standards in order to ensure that only quality and environmentally friendly materials are used in production. Finally, the report illustrates the sustainable practices and the challenges IKEA faced during ensuing sustainability and concludes by providing some recommendations and an overall judgment on IKEA’s efforts. The report is an idea for business graduate students and company owners aiming to ensure sustainability and protects the environment. It demonstrates "corporate social responsibility and supply chain management" for any business based on supplier partnership analysis.
Keywords: Sustainability, IKEA, Outsourcing, Suppliers, Challenges, IWAY
Introduction
IKEA Group is a multinational retailing company with a pronounced emphasis on sustainability. Established in 1943, IKEA aims to produce high-quality, affordable home furnishing solutions through its "Democratic Design" philosophy anchored on design, function, and sustainability. According to those values, the company continues to institute measures that enhance its sustainability scores by using responsibly sourced raw materials, encouraging energy efficiency in its operations and customers' homes, and operating a buy-back programme that promotes recycling and reusing (IKEA, 2021). Many IKEA stores had maintained a buy-back structure before 2020, but the year marked the first time the brand scaled the initiative across its global franchises (Taylor, 2020). IKEA seeks to expand its buy-back initiative and open the first second-hand store in Eskilstuna, which will run as a pilot project. Only used, damaged furniture and renovated decorative items from nearby stores will be collected for repair and resale. According to Jonas Carlehed, the director of sustainability in Sweden, the project is not simple. It entails many risks, including specific supply chain difficulties in quality control. Still, the family of IKEA is ready to take the challenge and establish a new significant era for sustainability. Thus, this report evaluates the advantages and disadvantages of outsourcing the buy-back program for third-party entities. It analyses the criteria that need to be fulfilled to award contracts to suppliers. It concludes by describing the sustainable practices implemented by IKEA, considering several challenges that may arise, and providing recommendations to ensure the programme's success.
Outsourcing at IKEA
According to Oshri, Kotlarsky, and Willcocks (2009), outsourcing occurs when a contract between the company and another service provider occurs to manage and complete a prescribed amount of work, the cost, and the length of time it would take to complete the service. Outsourcing has brought many benefits to IKEA and created some problems, and all of these are discussed below.
Advantages of Outsourcing in IKEA
1 Improving competitive advantage
The concept of outsourcing continues to gain traction in the current globalized market due