The "Sustainability at IKEA Group" case study assesses the People and Planet Positive sustainability plan of the company. It discusses the program concerning its being aligned with IKEA's business model.
V. Kasturi Rangan, Michael W. Toffel, Vincent Dessain, Jerome Lenhardt
Harvard Business Review (515033-PDF-ENG)
September 02, 2014
Case questions answered:
Case study questions answered in the first solution:
- How would you assess IKEA Group’s People and Planet Positive sustainability plan? Is the plan likely to help the company transform its business? Are the plan’s targets too limited, appropriate, or too ambitious?
- How do you feel about the progress IKEA Group has made in implementing the plan?
- How does IKEA’s sustainability strategy align with its business model? What are the overlaps? What are the conflicts?
- Which option(s) should IKEA Group pursue to address IKEA’s Wood Supply Chain sustainability? Which has the highest leverage for IKEA?
Case study question answered in the second solution:
- What strategy would you recommend for IKEA for its wood sustainability without compromising its growth target for 2020?
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Sustainability at IKEA Group Case Answers
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1. How would you assess IKEA Group’s People and Planet Positive sustainability plan? Is the plan likely to help the company transform its business? Are the plan’s targets too limited, appropriate, or too ambitious?
The strategy for sustainability at IKEA Group, ‘people and planet positive,’ aims at meeting the needs and interests of many people and society while protecting the environment. The strategy is intended to also improve the quality of life of people and communities within the planet’s limits.
The company is committed to the right working conditions, uses resources efficiently, and recycles waste into resources. It also promotes renewable energy, responsible stewardship of forests, water, and farmlands, and a better society that respects human rights across its integrated value chain.
This plan is a significant step towards transforming business and innovations, creating new business opportunities, and leading the change in society. The idea to make more sustainable products (energy-efficient LED lighting) and provide affordable solutions is likely to benefit the consumers, environment, and society by saving money and time and living an exciting life.
Similarly, the IKEA Group will be able to achieve a competitive advantage through its access to important raw materials, improved relationships with co-workers and customers, development and maintenance of a supplier base, and increased productivity.
The plan’s targets are ambitious because they pertain to all aspects of business and add value. IKEA’s success in its business and becoming people and planet positive depends on its ability to enable change throughout its business, and more critical because they are aimed at creating a positive impact on people and the planet.
Also, the IKEA group has highlighted three key change drivers that will make it possible to achieve the stated targets for sustainability:
- Inspiring many customers to live a more sustainable life at home. This is by taking the lead in developing and promoting products and solutions that help customers reduce waste and save energy.
- Engaging and involving people and communities, suppliers, and co-workers through impactful, relevant, and unique communication.
- Striving for resource energy independence. Sourcing raw materials from more sustainable sources produces a renewable energy source and promotes energy efficiency throughout its value chain.
- Taking the lead in contributing to a better life for people and communities by supporting human rights and preventing child labor.
- By August 2017, develop and implement a transparent and reliable system for the responsible recruitment of workers at first-tier suppliers in critical areas…
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