IKEA's Globalization Strategies and its Foray in China
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Case Details:
Case Code : BSTR173
Case Length : 16 Pages
Period : 1995-2005
Organization : IKEA
Pub Date : 2005
Teaching Note :Not Available
Countries : China
Themes :Globalization |
International Business
Industry : Retail
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"Maintaining a strong IKEA culture is one of the most
crucial factors behind the continued success of the IKEA concept."1
- Ingvar Kamprad, Founder of IKEA.
"We expect IKEA - China will be among the top five before
2020, taking into account the rapid economic development of the nation, its
surging gross domestic product (GDP) and people's increasing living standards."2
- Ian Duffy, President of IKEA, China in 2004.
IKEA's Global Strategy
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Swedish company IKEA was the world's largest furniture retailer since the early
1990s. It sold inexpensive furniture of Scandinavian design. The company
operated in 55 countries with a workforce of 76,000 (the company referred to its
workforce as its 'co-workers').
IKEA offered nearly 12,000 items to the home furnishings market worldwide. It
sold a wide range of products including furniture, accessories, bathrooms and
kitchens at 186 retail stores in 30 countries across Europe, North America,
Southeast Asia, Middle East and Australia. IKEA enjoyed high brand equity.
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In 2003, Manhattan US-based Interbrand, a marketing research
and consultancy firm, valued the 'IKEA' brand at $6.92 billion and ranked IKEA
43rd on its list of the top 100 most valuable global brands, ahead of Nestle,
Harley-Davidson, and Apple.3
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Analysts attributed IKEA's success to its skill in
combining good product design and superior quality with an affordable
price. IKEA's low-pricing strategy was aimed at young people.
For several decades, IKEA had looked for international markets, which
were culturally as close as possible to the Scandinavian market. The
basic assumption behind IKEA's global strategy was
'one-design-suits-all.' Anders Dahlvig, the CEO of IKEA, had once said,
"Whether we are in China, Russia, Manhattan, or London, people buy the
same things. We don't adapt to local markets."4 |
IKEA's Globalization Strategies and its Foray in China
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