Ikea's Global Strategy

IKEA's global strategy

IKEA enters China by adopting joint venture with Chinese companies. this is due to the policy of Chinese government to achieve the principal of equality and mutual benefit (Li, 2007). therefore, IKEA's store in mainland of china belongs to IKEA group and operates as joint venture.

firstly, the customers saw IKEA as an expensive western brand. this happened during the open of IKEA first store in Shanghai. (Lewis, 2005) low prices was the major challenges of IKEA in China as the high import duty tax at the beginning.

IKEA has manufacturing factories and some material suppliers in China. therefore, IKEA reduced prices by 10% resulting in increasing sales by 50% in the first quarter of 2004. in addition, home interior competence which the key competitive advantage of IKEA in China has been chosen and promoted to strength the position of IKEA in Chinese market. on the contrary, there are few furniture firms in China that choosing this positioning strategy.

1. has IKEA taken a standardization approach or an adaptation approach in its markets around the world? do you think the company's approach is the right one for the future? explain

2. which retailers are IKEA's biggest competitors in the united states? why?

3. When company founder Kamprad decided to expand in China, his decision was not based on market research but rather on his own intuition. how well is IKEA doing in china? did Kamprad's decision payoff?

4. after failing in Japan two decades earlier, IKEA returned in 2006. conduct some research into how IKEA failed the second time around in Japan. Was IKEA able to avoid the mistakes it made in its first failed attempt?

sources: "The Corruption," The Economist, May 1,2010, p. 73; Dianna Dilworth, "Ikea Enters UK's

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