Ries - Part 2 Case Study

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Ries - Part 2 Case Study 2-1 IKEA Uses Market Research to Adapt for Global Markets: Discussion Questions: 1. IKEA spends a considerable amount of time researching new markets before entering them. What are some issues that IKEA should be considering? IKEA should consider a variety of issues while they are researching new markets before entering them. One issue to pay attention to is other local competition in the potential new markets. It will be important to consider how these competitive companies have failed and succeeded as a way to help assist IKEA in not making the same mistakes. Another issue IKEA should be considering revolves around the idea that there needs to be significant research done on the new market/new location in order to create the most effective budget plan. It will be crucial to understand differences in things like taxes and the cost of shipping or production. 2. Chapter 2 discusses individual versus collective other-oriented values. a. China is one of the countries discussed in this case. On face value, would you expect China to have a more individual or collective orientation? I would expect China to have a more collective orientation due to their practically universal language of Mandarin as well as the way their culture seems to operate based on traditions. b. The text discusses how cultural values evolve and individualism is on the rise in some Asian countries, especially among younger consumers. What evidence do you see in this case of both individualism and collectivism? Individualism can be seen in this case when it discusses Saudi Arabia and Israel as IKEA chose not to use women in their catalogs but received backlash. This shows how some consumers are shifting away from the more traditional collectivist cultures by disliking IKEA’s choice of not using female portrayals. Collectivism can also be seen in this case as well. Family ties are very strong in Indian cultures and IKEA catered to this traditional value amongst more collectivist cultures which are present in Indian households. 3. Another cultural value discussed in Chapter 2 is tradition/change. In most of the cultures described in this case, it is traditional for furniture to be already assembled upon purchase, and perhaps even delivered. a. In which of the countries mentioned in the case would the consumers likely have the hardest time dealing with the change of purchasing furniture in a flat-packed form that needs assembly?

I think the country of India would have the most difficult time handling furniture that needs them to assemble it themselves. In the text, it states that Indians do not like the do-it-yourself culture as a whole. b. How does IKEA overcome this discomfort? IKEA overcomes this discomfort from Indian consumers by giving people options of delivery, installation, and assembly to help combat this dislike of doing it yourself. 4. IKEA’s model of purchasing furniture that is flat-packed and then assembling it yourself at home is a new and different way of doing things for consumers in many countries. a. In terms of innovations (see Chapter 7), what type of innovation would this be considered? I believe that this type of innovation would be considered a discontinuous innovation. This is because furniture coming in a flat-pack form that needs assembly is a very new manner of doing things for people in various countries. Therefore, this is a type of innovation that creates significant changes in the pre-existing behaviors of the consumers. b. Does your answer for part A change if the furniture is delivered and assembled or installed by IKEA? My answer to the above question does change if the furniture is delivered and assembled or installed by IKEA. This is because if it is delivered and assembled or installed by IKEA then the consumers’ behaviors do not have to change/adjust significantly to the innovation. 5. Consider the 10 factors that affect the spread of innovations discussed in Chapter 7 (see Table 7–3 for quick reference). a. Which of these factors would play a positive role in how quickly acceptance of shopping for furniture using the IKEA model would spread? Explain your answer(s). I think that the nature/type of group factor would play a positive role. This is because IKEA spends a large amount of time searching for other new markets to enter. They also research extensively on the demographics and psychographics of each target market to help them understand the different types of consumers. In addition, the marketing effort is a factor that would play a positive role in the acceptance of IKEA. The brand is diligent in making sure that the way they are marketing fits the target market they are trying to sell to by appealing to the culture and local preferences of the people.

Compatibility is also important to IKEA as they have made strong efforts to adjust their products to each local target market and to ensure that the products are performing in the way they are expected to from consumers. Finally, the fulfillment of the felt need factor is another aspect that could play a positive role for IKEA. This can be seen in the text as the company has made themselves available to the consumers to assist in making sure that the products match what the consumers need in their distinctive homes. b. Which of these factors would play a negative role in how quickly acceptance of shopping for furniture using the IKEA model would spread? Explain your answer(s). I think that trialability would be one example of a factor that would play a negative role in the acceptance of shopping for furniture from IKEA. This is because it would be difficult for the brand to provide consumers with samples of furniture meant to try out and then have them return it the exact same way if it was not to their liking or satisfaction. Another factor that would play a negative role is perceived risk. In order for this to be successful the consumers would need to be able to have and use the product for an extended period of time before they could determine if it is performing as desired. This would be very challenging for IKEA since the durability of furniture lasts a long time and would make this an ineffective use of time management. 6. Perform a search on the Internet to discover the list of countries where IKEA is currently located (hint: in early 2022, there are over 60). Find a country that is not listed and imagine that you are an executive at IKEA. Brainstorm ideas of how you would need to adapt the products, communications, pricing, etc. to fit the culture of your chosen country. ● Sweden ● Norway ● Denmark ● Switzerland ● Japan ● Germany ● Australia ● Hong Kong ● Canada ● Austria ● Singapore ● Netherlands

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