...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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...Internationalization 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...
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...This article was downloaded by: [Hong Kong Polytechnic University] On: 3 June 2010 Access details: Access Details: [subscription number 738313287] Publisher Routledge Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 3741 Mortimer Street, London W1T 3JH, UK The International Review of Retail, Distribution and Consumer Research Publication details, including instructions for authors and subscription information: http://www.informaworld.com/smpp/title~content=t713735234 Knowledge and knowledge sharing in retail internationalization: IKEA's entry into Russia Anna Jonssona; Ulf Elga a Department of Business Administration, School of Economics and Management, Lund University, Sweden To cite this Article Jonsson, Anna and Elg, Ulf(2006) 'Knowledge and knowledge sharing in retail internationalization: IKEA's entry into Russia', The International Review of Retail, Distribution and Consumer Research, 16: 2, 239 — 256 To link to this Article: DOI: 10.1080/09593960600572316 URL: http://dx.doi.org/10.1080/09593960600572316 PLEASE SCROLL DOWN FOR ARTICLE Full terms and conditions of use: http://www.informaworld.com/terms-and-conditions-of-access.pdf This article may be used for research, teaching and private study purposes. Any substantial or systematic reproduction, re-distribution, re-selling, loan or sub-licensing, systematic supply or distribution in any form to anyone is expressly forbidden. The publisher does...
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...Based on Johanson and Wiedersheim-Paul’s researches and studies of internationalization of four Swedish firms, Johanson and Vahlne (1977) developed the Uppsala internationalization model. This model is base on two assumptions. First, firms want to increase their profits but also want to keep the risk rate at a low level. Second, most firms are lack of knowledge about overseas markets, it is a big obstacle to the development of international firms; and firms can get necessary knowledge mainly through going abroad. Firms will face four aspects when going abroad: market knowledge, market commitment, commitment decisions and current activities. All of them are divided into stage and change aspects interacting with each other in a circle. Uppsala model defines two perspectives of learning in international activities: general knowledge and market-specific knowledge. General knowledge focuses on marketing method or types of customers while marketing-specific knowledge concerns with business climate, cultural pattern, structure of market system. (Johanson and Vahlne, 1977). IKEA uses Uppsala model to expand its internationalization strategy from 1974, especially in Japanese market and Chinese market. According to Uppsala internationalization model, “companies appeared to begin their operations abroad in fairly nearby markets and only gradually penetrated more far-flung markets” (Global Marketing, Hollensen, page 63). IKEA started to expand internationally from the nearest countries,...
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...Global Sourcing Development at IKEA – a Case Study Paper prepared for the 25th IMP conference Jens Hultman1, Susanne Hertz1, Rhona Johnsen2, Thomas Johnsen2 1: Jönköping International Business School, P.O Box 1026, SE-551 11 SWEDEN E-mail: jens.hultman@ihh.hj.se, susanne.hertz@ihh.hj.se Tel: +46 0(36) 10 10 00 2: Audencia Nantes School of Management, 8 Route de la Joneliere, BP 31222 – 44312 Nantes Cedex 3, France. E-mail: tjohnsen@audencia.com; rjohnsen@audencia.com Tel: + 33 (0)240 37 46 25 Abstract This study explores the dynamic process of global sourcing development through a case study of the Swedish home furnishing giant IKEA and its supply network concerning the PAX wardrobe system. The paper provides a synthesis of the existing global sourcing literature by dividing this growing body of research into three major themes: globalization processes and stages, motives/drivers, and organizational design and management. Moreover, the paper integrates the global sourcing literature with the established literature on the internationalization process of firms. Comparing the existing research on global sourcing and internationalization, we propose two research questions focused on: (1) the ways in which the IKEA global sourcing and supply chain development process resembles a linear stages process, and (2) the principal drivers of the development of global sourcing within IKEA. Relating the findings of the global sourcing process in the case of IKEA, the paper suggests that the...
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...IKEA WRITTEN REPORT SUMMARY Introduction:............................................................................................................................................ 3 First question: .......................................................................................................................................... 3 IKEA’s business model: ........................................................................................................................ 3 IKEA’s strengths and weaknesses:....................................................................................................... 4 IKEA’s competences: ........................................................................................................................... 5 Summary about IKEA’s successful: ...................................................................................................... 7 Conclusion: .......................................................................................................................................... 7 Second question: ..................................................................................................................................... 7 The drivers of their internationalization: ............................................................................................ 8 IKEA’s internationalization strategy: ................................................................................................... 9 IKEA’s...
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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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...Ingvar Kamprad and IKEA Our group will illustrate IKEA’s general development in chronological order. We analyze its’ different strategy in corresponding stage, and look into IKEA’s future development. Part 1：IKEA’s initial development 1. Sources of IKEA’s successful entry in Sweden: Ingvar Kamprad saw a great opportunity when the furniture prices increased 41% faster than household goods between 1935 and 1946, and started selling low price, good quality and simpler design furniture primarily to the younger generation of customers who wanted to buy furniture for their first apartment. The tradition in Sweden was to sell expensive, long lasting (family heirloom) furniture, which after the war was too expensive for people. Instead of locating small stores in the central –more expensive part- of the city, he positioned his warehouses in the suburbs, which was a more cost efficient location which also allowed customers to park their cars. Also, because the furniture cartel banned Kamprad to sell directly to customers at shows and persuaded the manufacturing cartel to stop supplying furniture, IKEA started to sell with the help of catalog and started to supply from a different supplier, which allowed him to reduce his prices even more. He also introduced less expensive raw materials and a less-formal working environment. 2. Management process in the Europe-wide operation: In the Europe-wide operation process, we think the most challenging task for IKEA is to find a most effective...
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...Supply Chain Management – Assignment (Wal-Mart & IKEA) Are they involved in strategic alliances with major trading partners? If so, how and for what purpose? Strategic Alliances Definition of Strategic Alliance: Strategic alliances are inter-firm collaborative business models that allow firms to create value by sharing resources, obtaining market influence or access novel markets. Simply put, strategic alliance allows for projects where companies can share their resources and risks for an agreed period or project. Resources such as distribution chains, development of products, technologies or services become communal amongst alliances. In recent times, the potential positive effects of alliances are highly regarded by firms, thus, leading to an increasing trend in entering into strategic alliances with the aim of constructing stable collaborations. While the successes of alliances are plentiful, there is also evidence of many undesirable business outcomes. This section of the research paper will discuss and analyze the applications of strategic alliance for global giants in the retail business: IKEA and Wal-Mart. IKEA’s Strategic Alliances: IKEA aims to provide consumers with low-price products through fostering long-lasting business relationships and networks with its main suppliers. These relationships are a pivotal part of the development of IKEA’s products and technologies. IKEA tends to push interactions with their suppliers as far upstream as...
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...OVERVIEW OF IKEA HISTORY Ingvar Kamprad: The founder of IKEA, Ingvar Kamprad, began his business career as a young boy selling matches purchased in bulk individually for a profit to his neighbors near Agunnaryd. As his business grew, he expanded to selling fish, seeds, Christmas decorations and eventually, pencils and ball-point pens which were a new phenomenon in 1935. He was very clever in utilizing his resources - he delivered his goods by bicycle, and later used the local milk delivery vehicle to make deliveries. IKEA: In 1943, with a gift from his father, Ingvar established his business, using his initials, Ingvar Kamprad, the name of the farm on which he was born, Elmtaryd and the village nearby, Agunnaryd for the acronym. At this time, he was selling everything from pens and wallets to watches and nylon stockings by going door to door and selling directly to his customers. By 1945, the first advertisements for IKEA began showing up in local newspapers and he had developed a rudimentary catalog. IKEA Store: The first full IKEA store opened in Älmhult in 1958. With 6700 m2 (72,118 ft2), it was the largest furniture display in all of Scandinavia. In 1963, the first IKEA store outside Sweden opened near Oslo in Norway, followed by the flagship store in Stockholm - a whopping 45,800 m2 (492,987 ft2) circular store inspired by the Guggenheim Museum in New York City. The success of this store, and difficulties in serving customers due to an overfilled capacity led to...
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...international business before they can attempt the global strategy. 3. Globalizing the international strategy: by integrating the strategy across countries. Developing the core business strategy: Each separable business in a company needs its own core strategy. The core business strategy includes several key elements: * Type of products or services that the business offers * Types of customers that the business serves * Geographic markets served * Major sources of sustainable competitive advantage * Functional strategy for each of the most important value adding activities * Competitive posture, including the selection of competitors to target * Investment strategy Developing an internationalization strategy: Internationalization of things consists in any and all preparatory tasks that will facilitate subsequent localization of said...
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...standardised 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...
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...International Businesses Strategy of IKEA –Activities of the multinational furniture retailer Seminar paper in “Strategy of International Business” University of Economics Bratislava 2008/2009 Katarzyna Gawor Sona Halasova Friedemann Polzin Table of Contents IKEA – global strategy............................................................................................................2 History................................................................................................................................2 IKEA corporate structure...................................................................................................3 The IKEA Group............................................................................................................3 Inter IKEA Systems B.V. ..............................................................................................5 IKEA Stores...................................................................................................................5 Business strategy...............................................................................................................5 Mission...........................................................................................................................5 Target group..................................................................................................................6 Organizational structure........................................................
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...The purpose of this research paper is to define the most difficult challenges of international human resource management, such as cultural diversity and the problem of managing people in different cultures and environments, convergence and divergence and the variety of international organizational models that exist. This paper proves that human resource managers of global organizations can not afford to ignore challenges of international human resource management, in order to ensure company’s success. Moreover, this work focus on investigating the correlation between these problems, that also must be understood. During the past fifty years, technological advances in transportation and communications have spurred the pace of globalization. Many companies envolved from being purely domestic to becoming truly global. The first step in this evolution might be to export goods for sale in one or two foreign markets. The next step might be to manufacture those goods overseas because it is more efficient than shipping products thousands of miles to foreign markets. Setting up all those complex operations to enter a foreign market change the companies that eventually envolve into multinational enterprises. Although developing international business increase the requirement for understanding ways in which companies operate effectively on a global scale. In order to become successful in the global, competitive business world, firms must overcome certain challenges. Globalization influences...
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...Friedemann Polzin International Business Strategy: IKEA IKEA – Overwiev Global business strategy Generic Strategy Organizational structure Operational strategy CSR Regional Strategy in CEE Swedwood New markets – sourcing and customers Local strategy in Slovakia 04/12/08 International Business Strategy: IKEA 2 IKEA – historic background IKEA Svenska AB (1943) → Ingvar Kamprad Entering the Scandinavian market (1963) Expansion into Europe and first steps overseas Switzerland and Germany in the 1970’s Fall of the Iron Curtain → full entry into CEE → Swedwood Entry to the British market → aquisition of Habitat Further expansion → China and Russia 04/12/08 International Business Strategy: IKEA 3 Facts & Figures The IKEA Group: 253 stores in 24 countries 41 trading service offices in 30 countries 27 distribution centres and 11 customer distribution centres in 16 countries 183 stores in Europe (the largest market) 46 in North America 11 in Russia 10 in China and Japan 3 in Australia 04/12/08 International Business Strategy: IKEA 4 Facts & Figures Products: wide range of products including approx. 9500 standarized models of flat pack furniture avialable in IKEA stores all over the world Houses & flats – BoKlok in Scandinavia & in the UK (since 1996) Family Mobile in the UK (since 2008) Product names special naming system developed by IKEA 04/12/08 International Business Strategy: IKEA 5 Facts & Figures Employees: Coworkers by region ...
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