IKEA in Russia: Strategies and Ethical Dilemmas

Case 2: IKEA in Russia: emerging market strategies and ethical dilemmas
Introduction
The company IKEA has practised so many home visits to consumers to converse with people see
how they actually live and using the home and to recognize prospective needs not completely
realizing by consumers themselves. To understand the local family situations and also furnishing
so many traditions which can provide a base for an impactful introduction as well as marketing
of the concept of IKEA (Uslay et al, 2014).
The manager of the store has also pointed out the main priority in the places like Russia is the
normal cost of living and it comes to the car as well as TV and later maybe trip overseas. One
instance of how a company like IKEA has focussed the local place is in growing the settings of
room to completely reflect local situations in terms of apartment sizes as well as local
conventional based on furnishing (Deligonul et al, 2013). It is also possible to combine, mix and
match the variety of Russian home.
The entry strategy of the company of Russia is based on the basic level of standardization, the
concept of the market further holds that the current marketing program will be highly effective
since it can be customized as per the distinct needs of every targeted group of consumers.
Customers in distinct nations still have a wide variety of cultural background (Sanders et al,
2012). They change differently at the time of needs and wants which can be based on spending
powers, product cases and patterns of shopping since these changes are hard to transform, IKEA
must adopt the prices of products, promotions and channels which fit the customer wish in
Russia (Elg, Ulf et al, 2012). The company has determined to apply some form of adapted
international marketing strategy to adjust with the marketing strategy and mix components to

every international target market that bears more cost, however, hope for a large market return
and share.
Question 1: what are the various external factors which a company must take into account
while devising a market entry strategy for a new country? discuss these factors in the
Russian context and in the actions taken by IKEA.
The company faces a major number of external elements that can impede the ability to enter as
well as conduct business in Russia. IKEA facing challenges with the Russian government,
corrupt bureaucracy and finances. These challenges have further caused so many delays as per
the entry and continue to cause operational challenges that have influenced the effective
operations of IKEA in a place like Russia. Business have entered a new nation that must take so
many external elements into account before and during the entry time. IKEA’s starting attempt to
enter the country in 1991 was completely blocked because of the collapse of the Soviet Union.
There is other attempt as well that can be thwarted 2 years later by the constitutional crisis of
Russia and economic crisis (Lasserre et al, 2017). The ever-changing events and moving
elements forces IKEA to constantly stop, re-test and initiate again with a revision-based strategy
to get the goals. The important employee of IKEA Lennart Dahlgren completely oversaw
Russian operations of IKEA. He also recognized that the market of Russia came with so many
promises, he has some form of resentment towards Russia and based on a belief that the country
to house an immensely corrupt bureaucracy. As a matter of fact, organizations were also interest
in Russia must be completely up-front as well as honest while dealings. When an international
organization pay bribe, there is no end to any demand for the bribe (Piercy et al, 2016). This is
why, foreign organization must feel the urgency toward reporting the corruption. It is also
possible that the vocal opposition towards bribery in a place like Russia lead to the inability of

the company to gain some approval to enter the country. IKEA has a strong, international
reputation for just being hard-lined against any corruptive business activity and also has a record
of gaining accomplishment of the workforce adherence towards it rigorous ethical standards. The
company also faced continuous adherence the rigorous ethical standards (Zhao et al, 2012). The
company is also facing continuous setbacks when establishing new stores as well as advertising
for new stores. The whole expansion came towards a stop in the year 2009 when the company
will not completely succumb to pay bribe in order to gain some approval. Right after two years
of approval was in the end granted, sans bribe by the government of Russia (McCarthy et al,
2013). In the years that also ensued, the company further experienced fire, safety, health, tax,
building codes and customs-based challenges anyone of which can be delayed while the store
opens with ground-breaking rules by the store or access of the road in improving any kind of
barrier.
Question 2: what is the impact of strong and co-operative political machinery on the
business prospects of an emerging market? In this context, discuss IKEA’s Russian
sojourn. What should IKEA’s business strategy be in the future?
It has been seen that Russia is one of the developing markets when it comes to the vision of
machines with the current political and the conditions of the fiscal forms. They are set for the
dispersed quality for cooperating in the country. The head of the business media focus on the
facilitation through the cutting-edge vision where Russia trading has been made completely
sensible.
Russia has been working on the improvement in the market with focusing on the aeronautics and
the research with security and the development. It offers the market with the potential with