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Threats Faced by IKEA in China and Japan : Case Study

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Added on  2020-03-28

Threats Faced by IKEA in China and Japan : Case Study

   Added on 2020-03-28

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Running Head: IKEA – Case StudyIKEA – A long march to the far east Case Study
Threats Faced by IKEA in China and Japan : Case Study_1
IKEA – Case Study1ContentsOpportunities and Challenges in China and Japan..........................................................................1China................................................................................................................................................1Opportunities:..................................................................................................................................1Challenges........................................................................................................................................2Japan................................................................................................................................................3Opportunities...................................................................................................................................3Challenges........................................................................................................................................3Market entry strategies....................................................................................................................4China:...............................................................................................................................................4Japan:...............................................................................................................................................4Marketing mix.................................................................................................................................5Product.............................................................................................................................................5Pricing..............................................................................................................................................6Communication................................................................................................................................7Distribution......................................................................................................................................7Recommended future strategies.......................................................................................................8Tying up with local manufacturers..................................................................................................8Pricing strategy................................................................................................................................8Efficient communication practices..................................................................................................9
Threats Faced by IKEA in China and Japan : Case Study_2
IKEA – Case Study2References......................................................................................................................................10
Threats Faced by IKEA in China and Japan : Case Study_3
IKEA – Case Study3Opportunities and Challenges in China and JapanAs the case elaborates, IKEA was founded in a small village in Sweden. From there the brand has moved from different parts of the globe and is currently well established in over 36 countriesin the form of 279 stores (Lim, 2013). After the international expansion in nearby Scandinavian countries, Canada, North America and other parts of Europe, IKEA entered into the Asian province starting with China in 1998. However, IKEA utilized a span of 5 years and before opening its first store in Beijing. On the other hand, IKEA entered Japan via a franchisee arrangement in 1974. However, 12 years post that, the firm had to withdraw owing to mediocre returns. Nevertheless after 5 years and extensive research, IKEA swung back and entered the Japan market yet again in 2006. The opportunities and threats faced by IKEA in China and Japanare given below. ChinaOpportunities:1.High population: China has the highest population in the entire world and ranks number 1 even in terms of population density. This provides for a huge market and hence immense opportunity for any new business (Kostelijk, 2015). It has been noted in the case that on the very first day of the store opening, 80000 visitors came to IKEA store. Higher population indicates a much larger market for the business to target. This high population of China has been a driving factor for various businesses to set foot in China and use that as a stepping stone for entry in Asian markets(Herring, 2010).2.Unique Scandinavian designs: The uniqueness of the designs coming all the way from Scandinavia is a brilliant opportunity (Sjogren, 2015). China’s local furniture agents simply imitate other brands of furniture and sell their products. However, IKEA works intensively on their product design and aim to come up with new product designs for its customers across the world (Adams, 2015). These designs are very attractive and with a pinch of customization to suit the Chinese locals, a huge demand market can be created in this geography.3.New untapped market: As mentioned in the case, IKEA considers Asia as an emerging market still in its infant stage. Also the international competition in the furniture industry is much lesser
Threats Faced by IKEA in China and Japan : Case Study_4

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