In the initial stages IKEA expanded its business into new markets outside of Sweden including Norway by direct entry and by acquiring other businesses. However, over the years IKEA has been focusing on expansion of its business through franchising. IKEA now operates over 325 stores which are located in 35 countries.
An analysis of the Brazilian market indicates that it is a very promising environment for IKEAs products. The standard of living of working class individuals have improved and this has increased their demand for various products including home furnishings. Upper and middle class Brazilians have high disposable income and are willing to spend on high quality brand name products and so it would be good if IKEA offer goods for different segments of the market instead of focusing on just low priced products. Additionally, research indicates that 59% of Brazilians have a preference for foreign brands over home brands. However, there are certain obstacles in the political and legal environment that may negatively impact the success of IKEAs business. Furthermore, the currency of Brazil is overvalued. It is therefore important that IKEA use its resources to correct weaknesses in its operations and make use of opportunities and lessen the impact of threats in the environment.
IKEA operates 325 stores in 35 countries throughout the world. The company’s first stores between 1955 and 1978 were opened in Sweden, Norway, Denmark, Switzerland, Germany, Australia, Hong Kong, Canada, Austria, Netherlands and Singapore. Since then the company has expended its operations to 24 additional countries. However, the company does not have a presence in Brazil. Most of IKEA stores are franchises and therefore the company does not have to provide any capital outlay. However, franchise fees are dependent on the success of its franchise operations. In
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(n.d.), IKEA was established in 1943 by Ingvar Kamprad as a mail order business in Sweden. The company opened its first store in Sweden in 1958. IKEA prides itself in offering home furnishing products that are well designed with good…
TABLE OF CONTENTS
CHAPTER I - ABSTRACT 3
CHAPTER II - INTRODUCTION 4
Aims & Objectives 5
Research Questions 5
CHAPTER III - LITERATURE REVIEW 7
Mode of Entry 7
Ownership & Control 12
Conclusion of the Literature Review in Entry Strategy 15
IKEA in China 16
This paper presents brief report on the management strategy of IKEA and gives detailed analysis of both the internal as well as external environments. In order to analyze the business environments, various business analysis tools such as SWOT, PESTLE, Porter’s Five Force analysis etc will be included in the paper.
Investing in Emerging Markets. Emerging markets are the new development strategy of almost all multinational corporations at present. Several rounds of crisis in the western countries, uncertainty on the future of developed nations, and other economical and demographical issues at the developed countries had resulted in the companies looking for opportunities in the emerging economies.
IKEA was one of the pioneers towards globalization by offering furniture that was sold unassembled to its clientele therefore it could be shipped more securely and economically and consequently sold at the lowest possible costs to their customers.
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The company has gained worldwide recognition through innovative design and unique customer service. The study has dealt with how various strategic management models can bring about the betterment of the organization and also helps to form a strong global footing.
Over the last century, millions of businesses have been established throughout the world, but only a small percentage of them have survived. In order for a business to succeed in the long term, it must adapt to changes in the marketplace, utilize innovation and it must provide excellent customer service in order to build an active customer base. The paper will use more than 5 sources and graphics.
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