Case Study 2: Sustainability of Ikea Group

CASE STUDY 2: SUSTAINABILITY OF IKEA
GROUP
BY: M NEHA REDDY
MBA 1ST YEAR
SECTION-B
1. What strategy would you recommend for IKEA for its wood
sustainability without compromising its growth target for 2020?
Ans. In 2014, the IKEA group launched an aggressive growth strategy

that included expanding its number of stores around the world and
expanding its range of customer targets in order to achieve sales growth
of a factor of two by 2020, as well as a comprehensive sustainability
strategy called "People & Planet Positive" that began with the material
base and extended to customers' lifestyles in order to help them achieve
their strong will - growth in a balanced and sustainable way.
The strategies that I would recommend for IKEA for its wood
sustainability without compromising its growth target for 2020 are
 IKEA may be able to acquire more forest area, allowing them to

vertically integrate their supply chain. It would also enable them to
obtain more FSC certified wood, allowing them to diversify their
procurement away from China's expensive wood market. In the end, it
would give them complete control over the manufacturing process.
 Setting a goal to use more FSC certified and recycled wood can help
IKEA achieve greater procurement targets and standards. This choice
would assist IKEA in increasing production efficiency, demonstrating
a commitment to sustainability, and improving forest governance
control.
 IKEA can utilize more particleboard, reducing the amount of wood
they consume in the process. This not only saves money (by roughly
20%), but it's also easier to carry and provides for an increase in truck
loading efficiency.
 IKEA can use more recycled wood as it is cheaper than particleboard.
2. Do you think IKEA’s "People & Planet Positive" strategy would be

relevant for meeting its 2020 goal?
Ans. IKEA has created a "People and Planet Positive" sustainability
strategy. This strategy aims to make people's homes more sustainable and
to improve people's lives and the lives of their communities. This IKEA
sustainability strategy comprises resource and energy independence
programs that reduce waste while limiting the consumption of the planet's
resources and replacing them with recycled and renewable materials.
In each of these sectors, IKEA has had success. This demonstrates the
plan's effectiveness in terms of long-term profitability and environmental
commitment, in addition to the cost savings provided through sustainable
procurement. IKEA has also been working to improve its relationships
with suppliers and employees, resulting in improved working conditions,
demonstrating their corporate social responsibility. They have also been
offering new subsets of furniture to suit to their customers' lifestyles,
demonstrating their dedication to them.
Finally, the IKEA Group's People and Planet Positive Plan entails a full
transformation of the company's value and supply chain, as well as
sustainable sourcing, improved labour conditions, increased efficiency,
and profit maximization, among other things. This approach will
undoubtedly aid the organization in its transformation and is inextricably
linked to the company's ambition to expand. The overall strategy is
ambitious, yet doable given the company's commitment to attaining its
objectives. IKEA's 22-person corporate Sustainability Group, which
works to implement each element of the People and Planet Positive
agenda, is systematically planning each step.
Yes,I think IKEA’s "People & Planet Positive" strategy would be

relevant for meeting its 2020 goal.
3. What are the main challenges in sourcing sustainable wood?

Ans. Long multinational supply chains can make tracing sustainability
more complex. Nearly 1.6 million people world wide rely on the local
forests for their livelihood who are not protected by their respective
governments. Harvesting virgin forests and clearing land for plantations
posed a serious threat to the lives of many people.
Natural forest management had an unavoidable impact on biodiversity

and ecological processes, and the conversion of natural habitats to timber
plantations significantly reduced biodiversity.
By preventing photosynthesis from sequestering atmospheric carbon into

the soil, deforestation is a major contributor to global climate change. It
also limited long-term wood availability, which was a particular worry in
China, which already had a significant timber trade deficit.

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CASE STUDY 2: SUSTAINABILITY OF IKEA

Ans. In 2014, the IKEA group launched an aggressive growth strategy

 IKEA may be able to acquire more forest area, allowing them to

2. Do you think IKEA’s "People & Planet Positive" strategy would be

Yes,I think IKEA’s "People & Planet Positive" strategy would be

3. What are the main challenges in sourcing sustainable wood?

Natural forest management had an unavoidable impact on biodiversity

By preventing photosynthesis from sequestering atmospheric carbon into

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