C-70 Part 4: Case Studiesand reducing pollution. In September 2005, the IKEA
Social Initiative was formed to manage the company’s
social involvements on a global level. The main part-
ners to IKEA’s Social Initiative were UNICEF and Save
the Children. IKEA also took a proactive stance on
environmental issues and developed an Environmental
Action Plan in 1990, which was adopted in 1992. The
company’s environmental measures included elimi-
nation of polyvinylchloride (PVC) from its products
and packaging and minimizing the usage of formalde-
hyde, chromium, cadmium, lead, PCB, PCP, and Azo
pigments. The company used wood from responsibly
managed forests, stopped providing plastic bags to cus-
tomers, but offered reusable bags. In August 2008, it
created IKEA GreenTech, a €50 million venture capi-
tal fund, to invest in 8–10 companies with a focus on
solar panels, alternative light sources, product materi-
als, energy efficiency, and water saving and purification.
In February 2011, IKEA announced its plans for a wind
farm in Dalarna County, Sweden, to achieve the goal
of running on 100% renewable energy. As of June 2012,
IKEA had 17 stores powered by solar panels in the US,
with 20 additional installations in progress.
In 2004 and 2005, IKEA was named as one of the
100 Best Companies for Working Mothers by Working
Mothers magazine. In 2006, it ranked 96 in Fortune’s 100
Best Companies to Work For. In 2008, IKEA Canada
LP was named one of ‘Canada’s Top 100 Employers’ by
Mediacorp Canada Inc., and was featured in Maclean’s
newsmagazine.^11 In addition to these, the company
received many more awards and recognitions.
Global Furniture Industry
The global furniture industry had changed over the years.
It was not restricted to the making of chairs, tables and
beds, but had expanded into the production of a wide
range of furniture, furnishings, and designed interiors
which spelt style and elegance. With the world economy
developing at a faster rate since the beginning of the
new millennium, the furniture industry had witnessed
a boom with new markets opening up. While every
country had a unique style in its furniture design and
usage, the globalization, increasing migration, changing
lifestyles, and disposable incomes all contributed to the
increased demand for stylish and quality furniture and,
in turn, to the growth of the furniture industry.
Because of the long established production capacity,
advances in science and technology, greater availability
of funds, and management experiences, the traditional
furniture making countries in the West took up over 70%
of the global market. However, developing countries likeChina, the Philippines, Indonesia, Malaysia, Singapore,
Thailand, Korea, Taiwan, India, Poland, and Mexico,
were growing and showing great potential in furniture
production. With their newly identified competitive
advantages, these countries took up the remaining 30%
of the world market. The European region, on the other
hand, accounted for about half of the world’s furniture
production valued at around € 82 billion, with Germany
taking the lead with 27% of the total European Union
production followed by Italy (21.6%), France (13.5%),
and the UK (10.4%).^12 While, the US and Canada were
the largest importers at 15% purchase of the global pro-
duction, China was the world’s largest exporter, record-
ing exports of US$38.882 billion in 2011, up by 15.31%
year-on-year and accounting for 35.3% of global furni-
ture trade.^13
By 2015, the global furniture market was expected to
reach US$436.5 billion.^14 With a steady improvement in
the economy and living standards, Asia was expected to
become the center for the long term growth of the global
furniture market. According to a study by the World
Bank, the organized furniture industry was expected to
grow by 20%^15 a year and the demand for luxury fur-
niture was expected to rise in countries such as China,
Russia, Brazil, and India.Furniture Industry in India
India was home to rich traditional handicrafts and
artistic work of wood. Indian art and design had earned
a worldwide reputation for themselves. The supreme
quality, exceptional designs, and luxurious trends lent
elegance to the Indian furniture segment. However,
with the passage of time, the preferences of the Indian
consumer had changed and the furniture industry too
had changed to suit the consumer needs. The industry
produced a wide range of products related to office, liv-
ing room, bedroom, kitchen, garden, school furniture,
and also mattresses, furnishings, upholstery, parts of
furniture, etc., using a wide variety of raw materials
like wood, rattan, steel, plastic, and metal and more
recently silver.
Based on the raw material used, the furniture mar-
ket in India was regionally concentrated. According to
research by IKON Marketing Consultant, the furniture
market in India was estimated at around Rs. 700 billion
in 2010.^16 However, it was considered as an unorganized
sector, as handicraft production accounted for about
85%–90% of the total furniture production in the coun-
t r y.^17 The market was highly fragmented and production
came from small regional firms or individual arti sans
and only 10%–15% came from the organized sector