Principles of International Business

Running Head: PRINCIPLES OF INTERNATIONAL BUSINESS
Principles of international business
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PRINCIPLES OF INTERNATIONAL BUSINESS
Table of Contents
Introduction to the issue...................................................................................................................3
Descriptive discussion.....................................................................................................................3
Advantages/disadvantages of different approaches.........................................................................5
Recommendation and conclusion....................................................................................................6
Reference List..................................................................................................................................8

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PRINCIPLES OF INTERNATIONAL BUSINESS
Introduction to the issue
IKEA has recently decided to enter the online sales channel along with their physical stores. This
is because the customers are not happy anymore to drive out to their out of the town stores for
buying flat pack furniture. This is why it has been experiencing a drop in their sales. As a counter
strategy to this business issue, IKEA planned to develop itself into a multi channel sales brand
where the customers go to buy their products online as well as in the city centres and the big box
stores. As informed by Arestav and Åström (2018), the company has planned to launch a new E-
Commerce application for this purpose which will be incorporating elements like place,
augmented reality function and 3D visualisation of furniture in various home settings. However,
in the context of online marketing and sales IKEA will be facing significant competition from
Amazon and other popular online retail market chains. Like IKEA has developed market in Asia
Pacific, Europe and North American market, Amazon has strong retail presence in the online
sector of all these places including other Geographic locations like China, India, and other
potential Asian and European markets as well. The branding and positioning of Amazon is much
stronger than IKEA. Hence this can be considered to be a serious market threat for the furniture
manufacturing and selling organisation. In fact, Lin et al. (2017), states that Amazon has their
two personal furniture brands, who will give serious competition to the IKEA, in the major
business locations, where they want to open their ecommerce channels. Again, in addition to
Amazon, Fredman and Nilsson (2015), informs that IKEA will also be facing competition from
Flipkart, the emerging ecommerce brand from India as well as Otto from Germany.
Descriptive discussion
Evolving with the changing needs of the customers, IKEA could not cope up with the
marketing trends in spite of having highly distinguished as well as trends product lines. The