Abstract

The case discusses in detail Sweden-based furniture retailer, IKEA's re-entry into the Japanese market and the strategies it adopted on its re-entry. IKEA first entered Japan in 1974 through a joint venture with a Japanese company as a part of its plans to expand globally. It exited from the country in 1986, after failing to develop a significant presence. IKEA decided to re-enter the market in 2002, and the second time around, it conducted a thorough study of the markets and visited several Japanese homes to understand their requirements better. IKEA then formulated its strategy for the Japanese market based on 'small space living', and brought in products that were suitable to the Japanese -storage boxes, sofa beds, two-seater sofas, etc. As of 2008, IKEA operated through three stores in the country. The case discusses in detail, store and employee management, localization, and promotional strategies adopted by IKEA in Japan, and concludes with a discussion on possible challenges it could face in the country.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the furniture retail market in Japan
• Understand the reasons for IKEA's exit from Japan
• Study the factors that shaped IKEA's re-entry into Japan
• Analyze some of IKEA's strategies in Japan.

Keywords

Globalization, Business environment, Localization, Store management, Product design, Promotion, Furniture industry, Furniture retail, Privately held business, Family owned company, IKEA, Japan