IKEA’s Global Strategy Essay

Swedish accompany IKEA was the worlds largest article of furniture retail merchant since the early 1990s. It exchange inexpensive furniture of Scandinavian design. The company operated in 55 countries with a hands of 76,000 (the company referred to its workforce as its co-workers).IKEA offered nearly 12,000 items to the topographic point furnishings food mart worldwide. It sold a wide array of overlaps including furniture, accessories, bathrooms and kitchens at 186 retail stores in 30 countries across Europe, North America, Southeast Asia, bosom East and Australia. IKEA enjoyed high brand equity. In 2003, Manhattan US-based Interbrand, a marketplaceing research and consultancy firm, valued the IKEA brand at $6.92 billion and bedded IKEA 43rd on its list of the visor 100 most valuable planetary brands, ahead of Nestle, Harley-Davidson, and Apple.3 Analysts attributed IKEAs mastery to its science in combining good product design and superior quality with an low-cost p rice. IKEAs low-pricing dodge was aimed at unsalted tribe.For several decades, IKEA had looked for international markets, which were culturally as close as practicable to the Scandinavian market. The basic assumption behind IKEAs globular strategy was one-design-suits-all. Anders Dahlvig, the CEO of IKEA, had erst said, Whether we are in chinaware, Russia, Manhattan, or London, people buy the same things. We dont adapt to local markets. IKEA had, in fact, been kinda successful with its one-design-suits-all global expansion strategy in or so markets. However, industry experts were obscure as to whether this strategy would translate thoroughly into new, culturally diverse and riskier markets. They felt that a higher degree of localization was native for companies like IKEA to be successful in diverse markets.The Asian markets, together with the philia East and Australia, accounted for only 4% of IKEAs total revenues in 2004. The company was peachy to increase this share in the future. Upon inlet into the far eastern markets, IKEA faced a number of challenges in terms of vary cultural, demographic and market specific needs. IKEA overt its first store in chinaware in 1998.Although the companys global strategy had worked well in the old in most of the markets it had entered, it quickly learnt that success in the Chinese market inevitable a different strategy in the areas of Marketing and HR. IKEA also had to alter cardinal of the most important aspects of its clock-tested and be global strategy when it came to china sequence elsewhere in the world, IKEA had always laid its stores in less expensive areas and sold its furniture on the do-it-yourself (DIY) principle, these elements had to be changed in China. IKEA claimed that it had decentralized most of its functions including HR and stores management in China, but scorn this, there was criticism that IKEA was far in like manner bureaucratic with many of its operations existence globall y controlled and systematized.Commenting on this, Ian Duffy, IKEAs China retail manager commented, We need time to learn and change in the (Chinese) market to become a success. IKEA should feature many innovations to adapt to the China market. At IKEA our dream is to create a better general life for the many people. Our business mind supports this vision by offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to relent them.(Our vision and business idea, http//www.ikea.com/ms/en_US/about_ikea/the_ikea_way/our_business_idea/index.html)It seems non achieved in China market yet. Firstly, IKEA should have greater cooperation with local suppliers to get more than competitive advantage of cost leadership. Secondly, accord to the specialty of China market, IKEA should have some more adjustment to satisfy so many China picky customers. Thirdly, IKEA should intensify propaganda work to let more cust omers look and accommodate the IKEA model. As an outcomer, there is a long way to be the succeeder in this huge and potential market.After a long time to research the China market, IKEA already understand the China market more than before. With accelerating the speed of expand, the success of IKEA in China market is only the problem of time.