logo

(Solved) Case Study on IKEA

   

Added on  2019-12-04

13 Pages3886 Words172 Views
Case Study 1

Table of ContentsINTRODUCTION...........................................................................................................................3Question 1: The decision to locate overseas should be an informed process. Describe and assessthe methods and tools available to a business when making the choice between differentlocations...........................................................................................................................................3Question 2 Overseas environments may differ from a business's domestic environment.Considering the political, economic and cultural framework, discuss how overseas environmentsmay differ. Explain how such differences may present a risk to a business organization. ............7CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................102

INTRODUCTIONIn order to conduct business expansion in the new market, it is necessary fororganization to undertake effective strategies so that their objectives can be fulfilledeffectively. . Along with this, it also helps business entities to attain high sales andprofitability by expanding business in an effective manner. However, it is crucial for firmto make effective decision regarding locating its business in the overseas market and atthe same time, it is also necessary to be consider the rules and regulations ofgovernment so that business can be easily expanded (Grant, McLeod and Shaw, 2012).Also, management of firm is required to take leadership action so that potential ofmarket should be analyzed before entering into specific market. The current study isbased on a case study of IKEA that undertakes strategies to expand and becomeprofitable in Chinese market. Further, business is also planning to enter into Indianmarket and for that, it is focusing on assessing the advantages available in the marketof India. Question 1: The decision to locate overseas should be an informedprocess. Describe and assess the methods and tools available to abusiness when making the choice between different locations.It is essential for organization to make effective decision regarding locatingbusiness into the overseas market and thus, it should be an informed process.However, IKEA needs to undertake an expansion plan by informing others who arerelated to the business operations at the time of enlarging the business. IKEA is aSwedish low cost furniture brand which adopts different strategies so that they canexpand business effectively and become profitable in China as well (Hoványi, 2006).Therefore, in order to locate business in the overseas market, it is essential for firm toplan suitable strategies so that they can gain attention of Chinese consumers and theirpreference towards furniture products can be identified. Also, business is required todetermine the availability of local competitors and their pricing strategy so that it cangive tough competition to them. However, business also faces certain issues whileentering into China market such as local competitors copied its design and sold at lowprices that affects the sales of firm. Further, local suppliers also refused to supply raw3

materials to business and importing from other countries incurs high import tax thatultimately results into increase in prices that affects sales of furniture in market(Kouropalatis, Hughes and Morgan, 2012). In addition to this, management of IKEA should need to identify all the factorsregarding the overseas expansion so that appropriate strategies could be developedand implemented in order to achieve organizational goals. Also, it is significant for IKEAto adopt an effective informed process so that they can effectively locate its businessoperations in the overseas market such as India and China (Miles, 2002). Thus, beforestarting activities at different places, management of firm is required to determinevarious factors such as price, product, value proposition, store location, promotion andlogistics. However, all these factors need to be considered by IKEA at the time ofmaking choice for locating business at different locations. Also, firm should analyzemarket conditions prevailing in the country and assess the taste and preference ofconsumers while buying the furniture items. Main decision of positioning business in theinternational market is taken by management and owners that is related to inform otherindividuals regarding the choice of selecting different places where business is going tostart its operations. For instance, here, business is planning to launch its activities inChinese market and later in Indian market so that choices and preferences ofconsumers should be identified in order to attain organizational goals (Morgan, Strongand McGuinness, 2003). However, informed process is a crucial element for firm as it helps them to obtainpermission from different individuals before conducting business operations in theoverseas market. Therefore, management needs to ask employees and also involvethem in decision making process so that crucial strategies could be developed in regardto determine the market where firm is planning to launch its business operations. Inaddition to this, it is also significant for firm to ensure that applied strategies would resultinto profits and attain desired goals in an effective manner (Paswan, Blankson andGuzman, 2011). Here, research and development department of IKEA plays a crucialrole in determining the choice of targeted consumers in both the markets i.e. China andIndia and after that, identifying the market conditions that are prevailing in the country.Decision of international expansion is crucial as it needs to be informed to other people4

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Strategies Used by IKEA to Enter the Chinese Market
|15
|3174
|466

Market Entry Strategies Employed by IKEA in China
|38
|8739
|126

Threats Faced by IKEA in China and Japan : Case Study
|15
|4692
|332

Franchising Strategy of IKEA
|14
|4874
|395

Report on Marketing Entry Strategy of IKEA
|19
|6838
|83

The Competitive Strategy
|12
|3318
|20