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Globalization of IKEA By: Georgia Logan. IKEA IKEA was created in 1951 in a small village in Sweden. IKEA was created in 1951 in a small village in Sweden.

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Presentation on theme: "Globalization of IKEA By: Georgia Logan. IKEA IKEA was created in 1951 in a small village in Sweden. IKEA was created in 1951 in a small village in Sweden."— Presentation transcript:

1 Globalization of IKEA By: Georgia Logan

2 IKEA IKEA was created in 1951 in a small village in Sweden. IKEA was created in 1951 in a small village in Sweden. Offer well designed, and functional home furnishings at prices that almost everyone can afford. Offer well designed, and functional home furnishings at prices that almost everyone can afford.

3 Economy and Politics Sweden has one of the highest standards of living in the entire world. Sweden has one of the highest standards of living in the entire world. It is governed by a constitutional monarchy. It is governed by a constitutional monarchy. As part of the EU they must follow the rules and regulations on legal matters. As part of the EU they must follow the rules and regulations on legal matters.

4 Business Practices Must be punctual. Must be punctual. Periods of silence are common, and no one tries to fill them. Periods of silence are common, and no one tries to fill them. Decisions are made by a group consensus – which may take a while to come to. Decisions are made by a group consensus – which may take a while to come to. Try hard to avoid conflict and no room for small talk. Try hard to avoid conflict and no room for small talk. Allowed to receive gifts up to $200 in value, and then thought of as a bribe. Allowed to receive gifts up to $200 in value, and then thought of as a bribe.

5 IKEA in the world As of 2013 IKEA had 345 operations in 42 countries. As of 2013 IKEA had 345 operations in 42 countries. Germany alone contains 46 stores, and the U.S. has 38, while Sweden only has 18. Germany alone contains 46 stores, and the U.S. has 38, while Sweden only has 18.

6 Expanding to China In 1998 IKEA formed a joint venture in China. In 1998 IKEA formed a joint venture in China. Modified furniture to fit the smaller apartment style, and the stores changed their layout to represent these apartments. Modified furniture to fit the smaller apartment style, and the stores changed their layout to represent these apartments. Moved stores out of the suburbs to the cities where people could access them with public transportation. Moved stores out of the suburbs to the cities where people could access them with public transportation.

7 Business in China Punctuality is highly valued. Punctuality is highly valued. Conversations must be guided by the most senior person in the room. Conversations must be guided by the most senior person in the room. Small talk is a way to establish a relationship, which then leads to business discussions. Small talk is a way to establish a relationship, which then leads to business discussions. Silence is also acceptable in China, and should be expected. Silence is also acceptable in China, and should be expected.

8 Problems with Expanding The main problem was that the the low prices seen in Europe and North American were still high compared to Chinese standards. The main problem was that the the low prices seen in Europe and North American were still high compared to Chinese standards. In order to fix this, IKEA opened local factories to decrease its production/transportation costs. In order to fix this, IKEA opened local factories to decrease its production/transportation costs. They also targeted the younger, middle class population. They also targeted the younger, middle class population. https://www.youtube.com/wat ch?v=j1F4dVuzAi4 https://www.youtube.com/wat ch?v=j1F4dVuzAi4 https://www.youtube.com/wat ch?v=j1F4dVuzAi4 https://www.youtube.com/wat ch?v=j1F4dVuzAi4

9 Problems cont. Another big problem that IKEA faced was competitors taking their catalogs and copying the products. Another big problem that IKEA faced was competitors taking their catalogs and copying the products. Chinese laws didnt protect against this kind of problem. Chinese laws didnt protect against this kind of problem. IKEA fixed this by using social media outlets and targeting youth again. IKEA fixed this by using social media outlets and targeting youth again.

10 Further Issues IKEA has been trying to become for eco-friendly, and has charged customers for using plastic bags. IKEA has been trying to become for eco-friendly, and has charged customers for using plastic bags. The Chinese didnt understand this and didnt want to pay extra for the bags or bring their own. The Chinese didnt understand this and didnt want to pay extra for the bags or bring their own.

11 Further Expansion IKEA has continued to expand, and has most recently opened stores in Qatar and Lithuantia. IKEA has continued to expand, and has most recently opened stores in Qatar and Lithuantia. The have continued to face problems with host country culture differences. The have continued to face problems with host country culture differences.

12 References Culture Crossing. (n.d.). Culture Crossing. Retrieved April 20, 2014, from http://culturecrossing.net/basics_business_student_details.php? Id=19&CID=197 Culture Crossing. (n.d.). Culture Crossing. Retrieved April 20, 2014, from http://culturecrossing.net/basics_business_student_details.php? Id=19&CID=197 http://culturecrossing.net/basics_business_student_details.php? Id=19&CID=197 http://culturecrossing.net/basics_business_student_details.php? Id=19&CID=197 About IKEA. (n.d.). History. Retrieved April 20, 2014, from http://www.ikea.com/ms/en_AA/about_ikea/the_ikea_way/histo ry/index.html About IKEA. (n.d.). History. Retrieved April 20, 2014, from http://www.ikea.com/ms/en_AA/about_ikea/the_ikea_way/histo ry/index.html http://www.ikea.com/ms/en_AA/about_ikea/the_ikea_way/histo ry/index.html http://www.ikea.com/ms/en_AA/about_ikea/the_ikea_way/histo ry/index.html Couching tiger tames the dragon. (n.d.). How IKEA adapted its strategies to expand and become profitable in China. Retrieved April 19, 2014, from http://businesstoday.intoday.in/story/how- ikea-adapted-its-strategies-to-expand-in-china/1/196322.html Couching tiger tames the dragon. (n.d.). How IKEA adapted its strategies to expand and become profitable in China. Retrieved April 19, 2014, from http://businesstoday.intoday.in/story/how- ikea-adapted-its-strategies-to-expand-in-china/1/196322.htmlhttp://businesstoday.intoday.in/story/how- ikea-adapted-its-strategies-to-expand-in-china/1/196322.htmlhttp://businesstoday.intoday.in/story/how- ikea-adapted-its-strategies-to-expand-in-china/1/196322.html


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