Information Technology - Analyze the impact of the digital economy on Essay

Information Technology - Analyze the impact of the digital economy on the company IKEA - Essay Example At the showroom, customers were able to see and handle the furnishings before purchasing them and the company was able to present its products with function, quality and low price.(www.ikea.com). In response of competitor induces boycott of IKEA showrooms by customers, the Company began to design its own furniture, producing the unique flat products, which the customer was able to assemble at home. Such furniture also occupied less storage space and there was less scope for damages occurring during transportation of the products. The IKEA stores were based on the self service model , and customers were able to walk around the IKEA showrooms, inspect furniture and then select the pieces they liked, which were provided to then in flat designs for easy transportation with less damage.(Jeffreys 1992). The Company soon expanded into other countries and its global sales now totals over $17.7 billion annually. The success of IKEA has been largely due to its policy of offering quality products with low prices. The Company accomplishes this by maintaining a network of global suppliers who bid competitively for projects and the Company is thus able to manufacture and supply the products to IKEA at the lowest prices.(Solomon, 1991). It is constantly on the lookout for ways and means by which it can reduce its costs in order to continue to supply low cost yet quality products to its customers. As a part of this strategy to reduce costs, the company was examining ways and means to consolidate its supplier base such that the focus was on those suppliers located in low cost countries. However, longer lead times, higher demands on the planning process and an inability to quickly adapt to change were some of the drawbacks which IKEA sought to address through IT solutions. The Company has incorporated software developed by JDA – Demand and Fulfillment Solutions, with the Demand Management solution able to support all the 12,000 items in

Vietnam's Market Potential Case Study Example | Topics and Well Written Essays - 1000 words

Vietnam's Market Potential - Case Study Example As Vuong, Q.H. (2003) states, Vietnam provides a very potential market for Pepsi products. There is great amount of interest in these products and raw materials are locally available from agricultural commodities that are produced in large quantities. In every meeting, the first question is if they should go to Vietnam. Many global companies have preceded Americans in venturing in Vietnam. Daewoo by South Korea was the only large investor but other companies that have heavily invested in Vietnam are Sony Honda, Toshiba, and British Petroleum bad Peugeot. The first US Company to market legally in Vietnam was Carrier, which windows air conditioners which appeared in Ho Chi Minh City and Hanoi stores. Pepsi and coca cola companies were also first to venture in Vietnam. Vietnamese Market Potentials and Challenges Experts believe that the market of Vietnam has great long term potentials. However, compared to Thailand, it is less economically developed, and it might take it a minimum of two decades to reach the economic level of Thailand today. However, the location of the country at the center of Asia, together with enough low wage work-force powerfully attracts foreign investors into the country like a magnet. Presence of neighboring countries like Thailand and Malaysia which are fast developing has made Vietnam lag behind. Politically, the Vietnam War isolated it from industrial west as well as United States. Recently, the country has tried to solve many problems with Chinese government and currently, china is an important economic ally of Vietnam. Vietnamese population is so poor that they only earn $200 per capita (International Monetary Fund, 2010). This may still offer sufficient market for Pepsi products like tomato and chili sauces. Infrastructure is also under developed where only 10% of roads are paved and electricity is also very unreliable (Anonymous). However, manufacture of Pepsi may not be affected because raw materials are readily available within the locality and labor force is sufficient and cheap. For every 100 people, there is rarely a telephone available and the system of banking is underdeveloped too. However, Vietnamese communist party is currently struggling to adapt market economy principle and bureaucracy. With layers built up in decades of the rules of communist, which slow change pace. State committee for investment and cooperation is the key agency and because every agency wants to make the final decision, then the investment climate must be improved, if Pepsi and other companies are to thrive well in this country. How Western Countries can Help Improve the Political Climate in Vietnam Western countries can sign business contracts with Vietnam in order to improve the market conditions in Vietnam, besides ensuring a ready market for the produc ts. Western countries should also stop interfering with foreign affairs of Vietnam, so as to prevent political wars that are frequently witnessed in Vietnam. Diplomatic relations with Vietnam, for example the one reestablished by president Clinton on 11th July, 1995, should be encouraged among western countries because they boost business in Vietnam (Anonymous). Lack of diplomatic relations in Vietnam makes Vietnamese exports difficult to enter western countries markets like US because their tariffs are prohibitive. However, despite the initiatives of Washington, Vietnam does still qualify to the status of favored nation. Bilateral trade agreements can also help open up foreign investment trade in Vietnam besides giving exporters of Vietnam western markets accessibility and this may also largely benefit Pepsi. For example, the US and Vietnam bilateral trade agreement in July 2000 allowed Vietnamese exporters to easily access US markets, thus widening their market and hence