10. IKEA and 20-Turbine Wind Farm: Good Choice?
10. IKEA and 20-Turbine Wind Farm: Good Choice?
Image by DyeCoo
Referring to Tiffany Chen’s blog post, IKEA Canada purchased a 20-turbine wind farm near Pincher Creek and Southern Alberta, intending to be the socially responsible and sustainable firm. Although it is a highly costly investment for the firm, it is the “key to success in the future of business” and is “relevant in consumers’ hearts”.
IKEA did not only purchase a wind farm to meet the environmental needs by reducing its dependence on fossil fuels, but also had other practices to meet the social and economic needs. For instance, IKEA redefined productivity in the value chain by reducing the distance between factory and distribution centre to the store, and built supportive industry clusters by cooperating with suppliers of wood on more sustainable forestry practices.
The combination of sustainable practices and the investment on wind farm will lead IKEA to the success due to its decreased cost of production, which can increase the profit for IKEA. Furthermore, the customers can also be benefited from these practices since the prices of the goods can be reduced due to decreased production cost. IKEA then may build a competitive advantage by offering cheaper products through sustainable practices; that is, sustainability is not pursued just to enhance a brand image, but it is rather a win-win strategy for the firm, the environment, and the customers.
References:
1. Picture by DyeCoo
2. Articles:
http://globalnews.ca/news/970814/ikea-buys-wind-farm-near-pincher-creek/
3.Blog post
Tiffany Chen’s Blog post: IKEA setting sustainability as the core of its business strategy
