Ikea global strategy

Daniel Bachar

Assignment 5: Financial Environments
Ikea’s Global Strategy Questions
BUS 638- Global Environmental Issues in Business Transactions

09/12/2012 1. Has Ikea taken a standardization approach or an adaption approach in its markets around the world? Do you think the company’s approach is the right one for the future? Explain.
IKEA has taken an adaption approach as we can notice different marketing strategies when opening new stores around the world. Their approach will continue to be successful as long as they continue their low cost position philosophy and continue to offer their products according to the customers needs, sometimes designed specifically for a certain country to attend their population “profile buyer”. 2. Which retailers do you think will be IKEA’s biggest competitors in the United States? Why?
Big retail stores like Target for example are producing their own products and also their own furniture line, Target has their “RE” brand for easy furniture to build at home, similar to IKEA . Since their affordable price and their branded name are already popular in the U.S. There is some other furniture companies who have own a big part of the furniture market in the U.S. selling their products online and in magazines, a market that is not very noticeable but presented great results for some companies like Lexington Furniture for example. 3. Company founder Kamprad recently decided to expand into China, Kamprad’s decision was not based on market research but, rather, on his own intuition. How well is IKEA doing in China? Did Kamprad’s decision pay off?
So far IKEA found that even the “relatively low price” in Western society was high for the Chinese consumers and its goods even became a luxury for average people. Even though the Chinese customers have accepted the environment-friendly concept and cost-cutting effort of IKEA, many still complain that no free home delivery and installation service is offered. Service is a big