...Internationalization of IKEA in the Japanese market and Chinese markets Tutor: Authors: Group: Date: Leif Linnskog Wannapa Chaletanone (05-11-1982, Thailand) Wanee Cheancharadpong (03-09-1983, Thailand) 2022 June 4, 2008 Master Thesis EFO705, 10 points (15 credits) – Spring 2008 International Business and Entrepreneurship – MIMA Program School of Sustainable Development of Society and Technology Abstract Date June 4, 2008 Level Master Thesis EFO705, 10 points (15 credits) Authors Wannapa Chaletanone (05-11-1982, Thailand) Wanee Cheancharadpong (03-09-1983, Thailand) Title Internationalization of IKEA in the Japanese and Chinese markets Supervisor Leif Linnskog Problems Why did IKEA internationalize into Japanese and Chinese markets? And what factors did influence IKEA’s success in Chinese market but failure in the Japanese market of the first round? Purpose The aim of thesis is to understand the internationalization of IKEA in Asia by comparing between Japanese and Chinese markets. Method This master thesis based on qualitative approach in order to investigate the internationalization of IKEA in Asian markets as a case study since it is beneficial in understanding the observation and explanation of behavior in the certain cases. Conclusion IKEA is considered as retailer internationalization who expands into Japanese market as a result of deregulation and asset-based advantage while internationalize...
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...general retail store in a village situated in the south of Sweden, IKEA has grown into the world's largest furniture retailer with 279 stores in 36 countries today. Specialising in furniture and home decoration, IKEA has an annual turnover of 19.8 billion euros (source: IKEA, www.ikea.com, accessed 25/03/2012). The IKEA catalogue is printed in 52 editions with 25 languages, with a global distribution in excess of 160 million copies. IKEA sees the Far Asia as an emerging market still in its infant stage. Its number of retail outlets in Malaysia, Singapore, Taiwan, Beijing, Shanghai and Hong Kong are very small and comprises a mere 3% of the company's total sales. These stores were expected to be more successful in the near future. IKEA's imminent strategic expansion into this region exemplified its ambitions to dominate this emerging market. This Case Study illustrates how IKEA's ventures into China and Japan are laden with unique marketing challenges which it had not encountered before in other international markets. Read the attached case (Case Study: "IKEA: A Long March to the Far East" - Source: Oxford University Press) and answer the following questions; 1. Based on your analysis, what are the opportunities and challenges for IKEA in their market operations in (a) China; and (b) Japan? 2. Describe the market entry strategies that IKEA adopt in China and Japan respectively. 3. What are IKEA product, pricing, marketing communication and distribution decisions...
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...IKEA: A Long March to the Far East case study analyses From its humble beginning as a small general retail store in a village situated in the south of Sweden, IKEA has grown into the world’s largest furniture retailer with 279 stores in 36 countries today. Specializing in furniture and home decoration, IKEA has an annual turnover of 19.8 billion euros (source: IKEA, www.ikea.com, accessed 25/03/2012). The IKEA catalogue is printed in 52 editions with 25 languages, with a global distribution in excess of 160 million copies. Armed with its international experience in Europe and North America, IKEA took the company into the third phase of its development by embarking on a major expansion into the Far East, in particular Japan and China. IKEA sees the Far Asia as an emerging market still in its infant stage. Its number of retail outlets in Malaysia, Singapore, Taiwan, Beijing, Shanghai and Hong Kong are very small and comprises a mere 3% of the company’s total sales. These stores were expected to be more successful in the near future. IKEA’s imminent strategic expansion into this region exemplified its ambitions to dominate this emerging market. IKEA’s entry into Mainland China started in 1998 when it opened its first store in Shanghai, followed by Beijing in 1999. IKEA took its time to get to know the Chinese customers. This prudent approach to market entry took IKEA the following 5 years before it opened its first full-scale standard IKEA store in Shanghai in 2003. The store...
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...of IKEA in the Japanese market and Chinese markets Abstract Date Level Authors June 4, 2008 Master Thesis EFO705, 10 points (15 credits) Wannapa Chaletanone (05-11-1982, Thailand) Wanee Cheancharadpong (03-09-1983, Thailand) Internationalization of IKEA in the Japanese and Chinese markets Leif Linnskog Why did IKEA internationalize into Japanese and Chinese markets? And what factors did influence IKEA’s success in Chinese market but failure in the Japanese market of the first round? The aim of thesis is to understand the internationalization of IKEA in Asia by comparing between Japanese and Chinese markets. This master thesis based on qualitative approach in order to investigate the internationalization of IKEA in Asian markets as a case study since it is beneficial in understanding the observation and explanation of behavior in the certain cases. IKEA is considered as retailer internationalization who expands into Japanese market as a result of deregulation and asset-based advantage while internationalize into Chinese market because of supporting environments such as political, social and economic conditions as well as transaction advantage. To success and failure, psychic distance and learning, strategic decision making process, degree of adaptation of retail offer, entry strategy, characteristics of organization and management characteristics are the influencing factors on internationalization of IKEA in the Japanese and Chinese markets. Internationalization, IKEA, retailer...
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...IKEA: Expanding globally Introduction……………………………………………………………………………….3 1. A learning organization: understanding the culture of learning and innovation….3 2.1 General concept of learning organization……………………………………3 2.2 IKEA – a learning organization in various market:………………………….4 2. IKEA’s internationalization strategy ……………………………………………..6 3.3 Internationalization strategy from 1974 onwards ……………………………6 3.4 From the perspective of internationalization theories: ………………………7 3. Issued considered in international market research and opportunity analysis: ….9 3.1The Japanese and Chinese market: ……………………………………………9 3.2 The Brazilian market: ………………………………………………………..9 4. IKEA’s entry mode strategy: …………………………………………………...12 5.5 Subsidiaries………………………………………………………………….13 5.6 Franchising………………………………………………………………….13 Summary Introduction Globalization is now playing an important role in the growth of economies across the world. The rapid growth of its process has led to social, economic, technical, cultural and ecological interdependence among nations. It also provides new and potentially profitable markets, increases firms’ competitiveness, facilitates access to new product ideas, manufacturing innovations. Thanks to its numerous advantages, the world is moving closer together and a great deal of organizations has great opportunities to expand their market to foreign ones. IKEA, the world’s largest furniture retailer, did not...
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...approach to the world? IKEA in China Ulf Johansson Department of Business Administration, Lund University, Lund, Sweden, and Standardised approach to the world 199 ˚ Asa Thelander Department of Communication Studies, Lund University, Helsingborg, Sweden Abstract Purpose – The purpose of this paper is to analyse the marketing strategy in China of the furnishing retailer IKEA in the context of standardisation and adaptation of marketing activities. IKEA’s strategy in China is compared to its corporate strategy throughout the rest of the world. Design/methodology/approach – The four P classifications are used as a framework to compare the central marketing strategies of IKEA with marketing strategies used in China. The paper builds on both primary and secondary data. Interviews with senior managers at IKEA are conducted and studies on business and retailing in China are used. Findings – The marketing strategies used by IKEA in China are found to be different from the standardised strategies it uses throughout the rest of the world. Several of the changed strategies are central to the business concept of IKEA. Research limitations/implications – The present paper shows the challenges for a standardised marketing concept and its implications. Originality/value – The paper provides, in the context of the standardisation and adaptation of marketing activities, a more nuanced and up-to-date picture of the strategies used by IKEA compared to previous studies. Keywords Retail management...
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...Is IKEA destined to succeed everywhere it cares to establish itself? Question 1 Using a standardized products strategy with universal assortment around the world was the key to IKEA's success. That is, it markets the same basic products in all of its stores; instead of tailoring furniture to regional tastes, it focuses on making furniture that is universally attractive (Rondcha, 2008). Some 90% of the product line is identical across more than two dozen countries. However, in order to adapt to certain countries such as America, IKEA needed to modify their concept whilst still maintaining their original formula. Modification was implemented as the European products conflicted with American tastes and preference (Tracy, 1986). Conflicts arose when it was found that most Americans keep a sofa longer than a car and change their spouse as often as their dining room table (about 1.5 times in a lifetime). America didn’t get IKEA; it was too unswervingly Swedish. (Lewis, 2005). Kamprad believes the word ‘impossible’ is absent from IKEA’s dictionary (Altomare, et al. 1999) and by sticking to this belief, adaption was made to America’s furniture. This included widening the chest drawers by an inch or two which led to an immediate increase in sales by 40%. Despite Kamprad’s belief, it is impossible that IKEA will succeed everywhere it establishes. In 1974, IKEA expanded into Japan as their first Asian market. It had to pull out in 1986 due to differences between culture, lifestyle and...
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...6. Assessment Tasks Assessment Task 1: Assessment Task Case Study: IKEA: A Long March to the Far East Schedule Week 4 Performance Criteria: Outcomes Assessed 1.1,2.1,2.2, 4.1 Also addresses some elements of required skills and knowledge as shown in the Assessment Matrix Description: From its humble beginning as a small general retail store in a village situated in the south of Sweden, IKEA has grown into the world's largest furniture retailer with 279 stores in 36 countries today. Specialising in furniture and home decoration, IKEA has an annual turnover of 19.8 billion euros (source: IKEA, www.ikea.com, accessed 25/03/2012). The IKEA catalogue is printed in 52 editions with 25 languages, with a global distribution in excess of 160 million copies. IKEA sees the Far Asia as an emerging market still in its infant stage. Its number of retail outlets in Malaysia, Singapore, Taiwan, Beijing, Shanghai and Hong Kong are very small and comprises a mere 3% of the company's total sales. These stores were expected to be more successful in the near future. IKEA's imminent strategic expansion into this region exemplified its ambitions to dominate this emerging market. This Case Study illustrates how IKEA's ventures into China and Japan are laden with unique marketing challenges which it had not encountered before in other international markets. Read the attached case (Case Study: "IKEA: A Long March to the Far East" - Source: Oxford University Press) and ...
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...corporate strategy…………………………. 2.1 IKEA business and corporate strategy 2.2 Micheal Porter’s Five Forces Model 2.3 IKEA as a competitive advantage Chapter 3 Why IKEA failed in USA………………………………….. 3.1 Cause of the failure 3.2 Different management styles in USA 3.3 Different consumer decision process 1.0 INTRODUCTION 1.1 Scope 1.2 Objective 1.3 IKEA Company Background IKEA is a Swedish furnishing company and was founded by Ingvar Kamprad 1943. It started as a one-man mail order company in a farming village in Southern Sweden called Smaland. (IKEA, 2011a) Today IKEA has become a big international company which has stores in 44 countries worldwide. The IKEA Group has grown into a major retail experience with 123,000 co-workers and is generating annual sales of more than 21.5 billion Euros. (IKEA, 2011b). The sales growth is shown in Appendix 1. The IKEA concept started in the 1950’s with catalogue marketing combined with a showroom where customers could see and touch IKEA products. The company’s three distinct features were function, quality and low price. Problems with suppliers led the company to start purchasing from foreign producers in Eastern Europe. During the 1060’s the concept was taken even further by introducing the warehouse principle. A huge store in Stolkholm was opened where customers picked the products from the shelves themselves. IKEA turned a capacity problem into a new way of...
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...property of Gwenny Loman & Renée Pelk “Relevant criteria in firm’s environment affecting IPO decision” BRM Project – IKEA + IPO Abstract This research is aimed at developing a new model that should be able to determine for each privately owned company whether going public is a possibility for attracting new capital. Research upon IPOs resulted in variables of which a conceptual and hypothesized model were created. A meta-analysis and case study should determine the relevance and reliability of the model. Thereafter, a final model can be composed which can be applied to IKEA Group, our target company for the research, in order to obtain the final result; IKEA Group is qualified for an IPO, or not. Table of contents Introduction II 1. Rationale 1 2. Situational Analysis 2 2.1 Initial Public Offering 2 2.2 Advantages 3 2.3 Disadvantages 3 3. Theoretical Background 4 3.1 Initial Public Offering 4 3.2 Product market characteristics and performance 4 3.3 Industry characteristics 5 3.4 Initial underpricing 5 3.5 Hot and cold markets and IPO waves 6 3.6 Long-run performance 6 4. Conceptual Model 8 4.1 Hypotheses 9 4.1.1 Hypotheses Independent variables 9 4.1.2 Moderating Variables 9 5. Research design 11 5.1 Unit of analysis 11 5.2 Meta-analysis 11 5.2.1 The hypothesized model 11 5.2.2 The implementation 13 5.3 Case study 15 5.4 The implementation of the results 15 Bibliography 16 Appendices 20 * * Introduction Introduction...
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...Kathryn England Brenna O’Regan John Hudson IKEA’s Global Strategy: Furnishing the World IKEA is a privately-owned international furniture manufacturer known for its low prices and unique style. The company’s vision is to create a better everyday life for its customers by offering a great selection of well-designed, practical home furnishings. Since IKEA has chosen this sort of affordable and distinctive marketing strategy, the company has been very successful in its expansion throughout the world. In 1943, Ingvar Kamprad founded what is now known as IKEA in Almhult, Smaland, Sweden (Johansson, J.K. (2006) p. 85). Initially, the company sold such items as pens, wallets, picture frames, table runners, jewelry, etc., anything that Kamprad thought there was a need for (“IKEA” n.d.). Then, in 1947, furniture was added to their product selection, followed by personally designed pieces in the year of 1955 (“IKEA” n.d.). IKEA is also greatly known for its concept of selling disassembled furniture. Using this sort of strategy, in turn, has considerably reduced costs and their use of packaging, creating another great advantage for the company (“IKEA” n.d.). IKEA continues to use the same warehouse store design and layout as it has in the past. This design consists of “knockdown” inventory kits being stacked on large racks throughout the store, with an assembled version available for display (Johansson, J.K. (2006) p.85). Having their items packaged and stored in...
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...Standardized marketing strategies in retailing? IKEA’s marketing strategies in China, Sweden and the UK Steve Burt University of Stirling Department of Marketing, Institute for Retail Studies STIRLING FK9 4LA, Scotland, the UK. Ulf Johansson* *Contact author Department of Business Administration Lund University P. O. Box 7080 SE-220 07 Lund, Sweden e-mail:ulf.johansson@fek.lu.se Åsa Thelander Department of Communication Studies Lund Universitety, Campus Helsingborg, P O Box 882 SE-251 08 Helsingborg, Sweden Paper accepted for presentation at the 1st Nordic Retail and Wholesale Conference in Stockholm (Norrtälje), 6-7/11, 2008 Abstract IKEA is rumored to be a very standardized retailer, i.e., a certain set of marketing strategies is used that are the same around the world. This indeed sets IKEA, operating on markets in Europe, US as well as Asia and Australia, apart among international retailers. Often the theoretical conclusions in international marketing literature, as well as empirical evidence, argue convincingly for the more adaptation (to different markets) in different national markets. But is IKEA so standardized in marketing strategies? So far there are quite few, and very dated, empirical studies of IKEA marketing strategies (yet many refer to IKEA as having a standardized marketing strategy). Here marketing activites are conceptualized to concern: Merchandise - putting together an assortment of products (e.g., national and retailer brands, pricing and pricing...
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...marketing strategies in retailing? IKEA’s marketing strategies in Sweden, the UK and China ˚ Steve Burt a, Ulf Johansson b,n, Asa Thelander c a University of Stirling, Institute for Retail Studies, Stirling Management School, Stirling FK9 4LA, Scotland, UK Department of Business Administration, Lund University, P.O. Box 7080, SE-220 07 Lund, Sweden c Department of Communication Studies, Lund University, Campus Helsingborg, PO Box 882, SE-251 08 Helsingborg, Sweden b a r t i c l e in fo Available online 29 September 2010 Keywords: IKEA Retail internationalisation Retail marketing mix Standardisation Sweden the UK China abstract IKEA is often cited as an example of a ‘global’ retailer which pursues a similar ‘standardized’ approach in every market. This paper systematically assesses the degree of standardisation (and adaptation) of four commonly identified retail marketing mix activities – merchandise, location and store format, the selling and service environment, and market communication – within three countries. These countries – Sweden, the UK and China – represent different cultural settings and are markets in which IKEA has been operating for different lengths of time. The data upon which the comparison is based was generated from personal interviews, in-country consumer research, company documentation and third party commentaries. The conclusions drawn suggest that whilst IKEA operates a standardized concept, degrees of adaptation can be observed in customer facing...
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...foreign markets, the different strategies that firms pursue when competing internationally, and the various factors that affect a firm’s choice of strategy. Subsequent chapters build on the framework established here to discuss a variety of topics including the design of organization structures and control systems for international businesses, strategies for entering foreign markets, the use and misuse of strategic alliances, strategies for exporting, and the various manufacturing, marketing, R&D, human resource, accounting, and financial strategies that international businesses pursue. OUTLINE OF CHAPTER 12: THE STRATEGY OF INTERNATIONAL BUSINESS Opening Case: MTV Networks Introduction Strategy and the Firm Value Creation Strategic Positioning Operations: The Firm as a Value Chain Global Expansion, Profitability and Growth Expanding the Market: Leveraging Products and Competencies Location Economies Experience Effects Leveraging Subsidiary Skills Summary Cost Pressures and Pressures for Local Responsiveness. Pressures for Cost Reductions Pressures for Local Responsiveness Choosing a Strategy Global Standardization Strategy...
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...Burangi submitted to fulfill the requirements for an MSc in Information Systems particularly the International Marketing Module. The report reflects the success of IKEA in developing its brand internationally. The purpose of this assignment is to give one analysis of the marketing context in which IKEA operates and critical evaluation of its operational options. We would like to thank Fontys and Roehapmton that give us such a good opportunity to work as a group, and we also would like to thank our tutor, Mr. Wijckmans for his instruction. Executive Summary The report gives a detailed account of the IKEA brand development over the years using marketing principles. The first chapter looks at IKEA, the background, evolvement and current position. Chapter two looks at branding in terms of the marketing mix that is product, price, promotion and place. This is the followed by chapter three which looks how IKEA handles cultural differences when conducting business across the world. Chapter four explores the various methods used by IKEA when conducting market research world wide. Chapter five gives an account of the market entry strategy used by IKEA to introduce their brand in new areas. The next chapter then delves into the details of market segmentation, positioning and targeting strategies used by IKEA. The report concludes with a look into the future world trends and their effects on the...
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