Recommendations of Ikeas Global Sourcing Challenge: Indian Rugs And Child Labor (A) And (B) Case Solution

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Recommendations of Ikeas Global Sourcing Challenge: Indian Rugs And Child Labor (A) And (B) Case Study Solution

On the basis of above internal and external analysis of the company along with the evaluation of various options, the company is recommended to consider alternative 3. As alternative 3 would allow the company to broaden in international markets without any decrease in its regional revenues and any wear and tear of its market position. The business might pursue alternative 1 which would make it possible for the company to focus on prospective worldwide markets rather than the regional markets but as the business is highly dependent on the local markets with 90% of its shops in the United States, there fore pursuing option 1 would result in the substantial decline in business's earnings.

Aletrnative-1: Expanding International Brick and Recommendations of Ikeas Global Sourcing Challenge: Indian Rugs And Child Labor (A) And (B) Case Help Stores

Expansion towards worldwide markets through opening new shops in other Europe and Asian nations with closing domestic stores is although a great alternative for increasing the worldwide presence of the business. Nevertheless, the closing of domestic stores might highly affect the earnings of the firm as above 90% of its shops are located locally and closing those shops would eventually lower the revenues of the company. The business has a long term market position in United States which can not be produced quickly in the brand-new markets. The alternative would assist the company to expand in worldwide markets along with the removal of problems raised in its regional markets associated with its variety. The pros and Cons for Alternative 1 are noted below;

Pros:

• Exploration of new worldwide markets.
• Boost in revenue from international markets.
• Elimination of issues connected to diversity.
• Revenue diversification.
• Action towards being a strong global brand.

Cons:

• Loss of extensive profits from the regional markets.
• Boost in competitors.
• Distinctions in cultures might caused a failure of the brand specifically in Asian countries.
• Low profits at preliminary levels.
• Boost in marketing expenses to acquire market share.

Alternative-2: Introduction of Click and Recommendations of Ikeas Global Sourcing Challenge: Indian Rugs And Child Labor (A) And (B) Case Solution Stores

With the increased patterns towards online shopping, the online stores like Amazon, Alibaba and so on might present a serious risk to the market share of business. In this circumstance the company might think about introducing Click and Recommendations of Ikeas Global Sourcing Challenge: Indian Rugs And Child Labor (A) And (B) Case Help stores. These stores with a low requirement of funds to settle would enable the business to reach global markets, without ending its domestic shops.

Pros:

• Low investment
• Minimizing competitors threat
• Access to the world markets
• Expanding customer base
• Easy to handle
• Large Earnings
• Low Operating Costs
• Easy new market entrance

Cons:

• Danger to the market position
• Elimination of brand name Individuality
• Removal of the great shop experience.
• Threat of decline in elite sales.

Alternative-3: Expansion towards International Markets Without closing Domestic Stores

Another choice that the company could think about, is to broaden towards the worldwide markets without closing its domestic shops that adds to the major part of profits of the business. The benefits and drawbacks associated with Alternative 3 are provided listed below;

Pros:

• Decreasing competitors threat
• Access to the world markets
• Increasing the size of customer base
• Large Profits
• Expedition of brand-new worldwide markets.
• Increase in revenue from international markets.
• Income diversification.
• Action towards being a strong international brand name.

Cons:

• Extension of concerns associated with diversity.
• Differences in cultures could caused a failure of the brand particularly in Asian countries.
• Low earnings at initial levels.
• Increase in marketing expenses to get market share.



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