An interaction approach to global sourcing: A case study of IKEA

Abstract

This study explores the process of global sourcing through a case of the Swedish furnishing retailer IKEA from an interaction perspective. With a point of departure in the streams of existing research on global sourcing and the internationalization process of firms through networks, a research question is proposed concerning supply network interactions as an influence in the global sourcing process. The study uses an in-depth qualitative case study methodology, focusing on IKEA and its development of a supply network for the PAX wardrobe system during the years 2003–2009. The findings draw on 29 interviews in Sweden and China, ranging from interviews with the supply management function of IKEA to interviews with Swedish and Chinese suppliers and sub-suppliers. The findings show that the global sourcing process is influenced by interactions and network effects between supply network actors. In particular, we find that relationships between suppliers were identified and set up by IKEA, but cascaded into deeper interactions amongst suppliers at different supply network tiers. Our study contributes to global sourcing research in indicating the importance of interaction amongst supply network actors, showing how the global sourcing strategy of one actor may significantly influence the sourcing strategies of other actors. Global sourcing decisions therefore need to be understood and coordinated across global supply networks.