re another major issue for IKEA in offering lower cost product and hence, it becomes difficult for the company to compete with other domestic furniture manufacturing companies.
There are two major problems in IKEA for its China market that includes cross cultural communication gap and government policies. In this process, the primary aim of IKEA is to understand the core Chinese culture which must be blended with IKEA organisational culture. Understanding of local culture is inevitable for IKEA. Therefore, it should develop its internal organisation’s culture and communicational process by implementing integrated marketing communication model. It also needs to achieve higher efficiency of its multinational teams, and IKEA should try to increase the number of Chinese employees to understand and convince target consumer group. Besides, government’s support is also very essential for IKEA so it must increase its activities relating to corporate social responsibility.
Globalization has brought significant changes in human activities and their lifestyles. It has led to accelerate the growth and development of entire world economies and societies. Trade and business activities are one of the most crucial areas that have experienced tremendous growth since last two decades. The increasing global exchanges enhanced the importance of international trade and policies. Besides, the business agreements and treaties have facilitated the international communication and business activities. These reasons have provided greater opportunities to business organisations and hence, they keep expanding their geographical boundaries i.e. in overseas market. However, in this process, multinational companies (MNC) have to counter certain hindrances that affect efficiency of management. Cross cultural diversities and communication gap are the major challenges for MNCs (DuBrin, 2008, p.66).
This paper will attempt to analyse a case of a multinational company facing hindrances in