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

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

On the basis of above internal and external analysis of the business along with the assessment of different options, the company is suggested to think about alternative 3. As alternative 3 would permit the company to broaden in global markets without any reduction in its local revenues and any deterioration of its market position. The company could pursue alternative 1 which would allow the business to focus on possible global markets rather than the regional markets however as the business is highly dependent on the regional markets with 90% of its shops in the United States, there fore pursuing alternative 1 would result in the significant decrease in company's revenue.

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

Expansion towards global markets through opening brand-new stores in other Europe and Asian nations with closing domestic shops is although a great option for increasing the global existence of the company. However, the closing of domestic stores might highly affect the revenues of the firm as above 90% of its shops lie domestically and closing those stores would eventually reduce the profits of the company. Furthermore, the company has a long term market position in US which can not be created quickly in the brand-new markets. The choice would assist the company to expand in international markets together with the elimination of issues raised in its regional markets associated with its diversity. The benefits and drawbacks for Alternative 1 are listed below;

Pros:

• Expedition of brand-new worldwide markets.
• Boost in profits from global markets.
• Removal of problems connected to diversity.
• Revenue diversification.
• Step towards being a strong international brand name.

Cons:

• Loss of comprehensive revenues from the local markets.
• Increase in competition.
• Differences in cultures might caused a failure of the brand name specifically in Asian nations.
• Low incomes at initial levels.
• Boost in marketing expenses to gain market share.

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

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

Pros:

• Low financial investment
• Reducing competitors danger
• Access to the world markets
• Expanding consumer base
• Easy to manage
• Big Incomes
• Low Operating Expense
• Easy brand-new market entryway

Cons:

• Hazard to the market position
• Removal of brand Originality
• Elimination of the fantastic shop experience.
• Threat of decline in elite sales.

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

Another choice that the company could consider, is to expand towards the worldwide markets without closing its domestic stores that contributes to the huge part of revenues of the company. The benefits and drawbacks connected to Alternative 3 are given listed below;

Pros:

• Lowering competitors risk
• Access to the world markets
• Increasing the size of consumer base
• Big Revenues
• Expedition of brand-new international markets.
• Increase in profits from international markets.
• Earnings diversity.
• Action towards being a strong international brand name.

Cons:

• Continuation of concerns associated with diversity.
• Distinctions in cultures could resulted in a failure of the brand specifically in Asian nations.
• Low profits at preliminary levels.
• Boost in marketing expenses to acquire market share.



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