Question

Please answer both questions

1. Ore-Ida is the one of the largest potato processors in the world. Explain why Ore-Ida buys it potatoes from farmers instead of growing potatoes itself?
2. Why would Ikea, a wood furniture and home furnishings manufacturer, buy forests and woodlands?

Answer 1

Ore-Ida is one among the most important potato processors within the world, use the strategy to shop for the potatoes from the farmers rather than growing it by themselves. this is often performed thanks to the rationale that the corporate purchases the raw materials, which suggests the potatoes at a coffee wholesale rate and sell the products at higher rates in its retail sale. The farming of potatoes has increased within the years, but the typical yield per land isn't that much increased which indicates the farmers aren't creating that much benefits. But on the opposite hand, the Ore-Ida has created a unprecedented profit within the past years. And within the market of potatoes, there exists "oligopsony", which suggests that only a really few number of buyers are present and that they exert the pressure over the market. during this condition the corporate has great control over the market.

The Ikea, wood furniture and residential furnishing company brought the whole forest and therefore the woodlands so as to satisfy their growing concern on the stress of wood. When the wood's availability decreased, then they need to satisfy with this problem and to seek out solutions over it. So so as to make sure this availability now they have a tendency to shop for the entire forest area. for instance the corporate has brought the whole forest, almost 83,000 acre woodland within the Romanian forest area. By this purchase the corporate claimed that the supply of the products is ensured at an honest scale and most significantly at affordable prices.