Discuss how the following hypothetical events would affect the following businesses: Business 1: IKEA: International furniture store with hundreds of stores worldwide Business 2:... Discuss how the following hypothetical events would affect the following businesses: Business 1: IKEA: International furniture store with hundreds of stores worldwide Business 2: A small city-based furniture shop that sells high quality custom designer furniture which is manufactured locally by the owner Event 1: Political Embargo- Relations deteriorate between 2 regional superpowers to the point where all trade between the two countries is stopped Event 2: In an effort to curb climate change, logging of all old-growth forests is banned worldwide. Only wood from plantations can be used
Understand the Problem
The question asks you to analyze the impact of two hypothetical events—a political embargo and a ban on logging old-growth forests—on two different furniture businesses: IKEA (a large international chain) and a small, local custom furniture shop. You need to discuss how each event would affect each business, considering their different scales, supply chains, and business models.
Answer
IKEA would face supply chain issues and look to find new suppliers, while the local shop would need to find alternative, sustainable sources, which could affect costs and designs.
Okay, here's an analysis of how the hypothetical events would affect the businesses:
Event 1: Political Embargo
- IKEA: Could face major supply chain disruptions if the embargo involves countries where they source materials or manufacture products. They might need to find new suppliers, potentially increasing costs and affecting product availability. Sales in the involved countries could also be significantly impacted.
- Small City-Based Furniture Shop: Less directly affected if their materials and customers are local. However, if they import any specialized hardware or materials from the affected countries, they could face supply issues.
Event 2: Ban on Logging Old-Growth Forests
- IKEA: Likely already sourcing from sustainable plantations, so the direct impact might be minimal. However, increased demand for plantation wood could drive up prices. They may need to adjust their marketing to emphasize their sustainable practices.
- Small City-Based Furniture Shop: This depends on their current sourcing. If they're using old-growth timber, they'll need to find alternative, sustainable sources, which could affect their costs and the aesthetic/quality of their furniture. This could be difficult and the business may need to re-design products.
Answer for screen readers
Okay, here's an analysis of how the hypothetical events would affect the businesses:
Event 1: Political Embargo
- IKEA: Could face major supply chain disruptions if the embargo involves countries where they source materials or manufacture products. They might need to find new suppliers, potentially increasing costs and affecting product availability. Sales in the involved countries could also be significantly impacted.
- Small City-Based Furniture Shop: Less directly affected if their materials and customers are local. However, if they import any specialized hardware or materials from the affected countries, they could face supply issues.
Event 2: Ban on Logging Old-Growth Forests
- IKEA: Likely already sourcing from sustainable plantations, so the direct impact might be minimal. However, increased demand for plantation wood could drive up prices. They may need to adjust their marketing to emphasize their sustainable practices.
- Small City-Based Furniture Shop: This depends on their current sourcing. If they're using old-growth timber, they'll need to find alternative, sustainable sources, which could affect their costs and the aesthetic/quality of their furniture. This could be difficult and the business may need to re-design products.
More Information
The impact of political and environmental factors can significantly vary between large international corporations and small local businesses due to their different scales of operation, supply chain complexities, and target markets.
Tips
When analyzing the impact of hypothetical events on businesses, consider both the direct and indirect effects on their supply chain, operations, and markets. It's also important to consider the different scales of these businesses.
Sources
- ACCT1002 M1 Workshop Questions - Studocu - studocu.com
- ACCT1002 M1 Workshop Questions | PDF - Scribd - scribd.com
- Impact of Hypothetical Events on Furniture Businesses: IKEA vs ... - coursehero.com
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