Managing across cultures is a priority for companies that pursue an internationalization strategy.
The case of the Swedish furniture company IKEA illustrates the complexity of this process.
The Swedish company IKEA, which pioneered flat-pack design furniture at affordable prices,is the world's largest furniture manufacturer. The Group owns 258 IKEA stores in 24 countries. In total, there are 292 IKEA stores in 36 countries/territories. The other stores are owned and run by franchisees outside the IKEA Group in 16 countries/territories. Historically, IKEA started its business in a small village in Sweden in 1943 and was founded by Ingvar Kamprad when he was 17. The name IKEA comes from his initials (I.K) plus the first letter in Elmtaryd and Agunnaryd, the farm and the village where he grew up. The founder has provided patriotic values to profile IKEA very much as a Swedish company.
To illustrate this point, all outlets are painted in the same colors, the blue and yellow of the
flag.
The internationalization of IKEA witnessed a sharp increase in the early 90s particularly in Asian territories. In 1998, the company opened its first store in Shanghai. The strategic orientation of the group to access more foreign investment in China can be explained by the positive global environment of the country. The rational for foreign furniture companies like IKEA for direct investments in China is two-fold: to produce furniture for the export market and to produce furniture for the huge domestic Chinese market.
Ikea's decision to enter China stems from supporting political, social and economic conditions that allow IKEA to beneficially exploit advantages in the Chinese market.
Economic: China has seen tremendous economic changes in the last few decades. China's annual GDP growth has averaged more than 8 percent in the past 25 years, and in 2007, its GDP grew by a record-breaking 11.4% .The development of China's economic policy during the last twenty years was aimed at manufacturing; especially export oriented manufacturing.
Tags: Ikea success in China, Ikea strategy in China, Analysis of Ikea in China, Ikea China strategy
[...] Decisions and activities focus around personal faceto-face relationships, often around a central person who has authority IV RECOMMENDATIONS SUCCESS OF IKEA IN CHINA In order for an organization to be successful, it is important to have a clear competitive strategy and more importantly understanding of the culture. This case study seems to demonstrate that the integration of a company, influenced by a low culture dimension, in a country dominated by a high culture dimension appears more strategically surmountable. require Adaptation to consumers of people. [...]
[...] Others frameworks of Chinese culture: Religion social ethics and moral teachings of Officially China is atheist, but has traditionally been very pragmatic and eclectic in dealings with spiritual matters as well as secular matters. However Confucianism have been blended with those of Taoism and Buddhism. Family Chinese is the family. This explains There are many norms that reflect this value: prohibition against demonstrations of public Family is the most central institution in the Chinese tradition and society. It is perceived as a stabili ing factor in family. [...]
[...] IKEA has built transportation lines near its stores in a fee Chin China and offers home delivery and long-distance delivery to major cities in China for and offers fee-based assembly services. IKEA was aware that be different since, for example, only 20 percent of visitors in Shanghai . cars. But the stores also need parking places so that people can visit with their own cars in the future. Stores in Shanghai have nearly park Adaptation to management style IKEA's vision was "To create a better everyday life for many people." 'People' included 15 employees, customers, as well as the community. [...]
[...] An international study showed that Sweden had the lowest “uncertainty avoidance index”. The Swedish managers are not anxious to do the thing; they tend to act with pragmatism ORGANI ATIONAL CULTURE OF IKEA: ANALYS CULTURAL WEB (JOHNSO & SCHOLES) OF THE THE CULTURAL WEB STORIES THE IKEA COMPANY - Roots and soul of IKEA lie in the hard work soil of Smaland in southern Sweden. - Non-taxable profit : Because INGKA Holding is owned by the non profit INGKA Foundation, none of this profit is taxed. [...]
[...] allow IKEA to beneficial Economic: China has tremendous economic changes China's annual GDP growth has averaged more than 8 percent in the past 25 years, and in 2007, its GDP grew by a record-breaking .The development of China's economic policy during the last twenty years oriented manufacturing. Population: With just over 1.3 billion people (1,330,044,605 as of mid-2008), China is the 3 aimed at manufacturing especially world's largest and most populous country. Chinese people's living standard improved greatly with the growth of the national economy Furniture market: The furniture market in China has progress market expand and the country becoming a vital export base and location for furniture factories. [...]
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