Ikea in China

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IKEA in China Executive Summary The report aims to analyse the strategies IKEA employs in its foray into emerging markets, specifically in China. The report will first give a brief background on IKEA, with reference to its business model and specific competencies then proceed with examples of its operations in selected emerging country markets. It will then delve into the main content highlighting China’s importance to IKEA both as a market and a source of its goods, followed by an evaluation of a number of adaptive strategies IKEA employed to suit its markedly different Chinese target market. Finally, we identify some challenges IKEA is still facing in China in light of uncontrollable external factors. 1. Introduction 1) IKEA Global IKEA is the world’s biggest and most globally diversified furniture retailer, present in 39 countries through 316 stores (Euromonitor International 2011). It utilizes price leadership as its main growth strategy in developed countries, providing exceptional value for money through its offerings of an immensely wide range of original and quality furniture and home accessories. IKEA executes this strategic position through a combination of global sourcing and efficient production, coupled with savings on labor costs through its DIY (do it yourself) and home assembly concept. [pic] source: Euromonitor International 2011 Being present in 39 countries and counting, IKEA capitalizes on its Swedish and Scandinavian roots in its continued global expansion. It maintains sleek and simple Scandinavian designs which have come to be known as the company’s defining characteristic. [pic] source: Euromonitor International 2011 IKEA is well known for its intricate and well thought-out store layouts which has garnered many appreciative proponents of its creative and functional interior designs, but also a number of critics

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