Cross Cultural Issues of Ikea's Operation in Different Countires

1.27 Centralised Control: As IKEA is continuing to expand in to the foreign market there would be more pressure on centralised strategic direction where it would be difficult to balance the country level autonomy and centralised intervention, for e.g. the control over its supplier in terms of quality reassurance, technology shifts and economies of scale may activate the suppliers to assimilate forward and manufacture competitive product for IKEA local competitors other problem may be the common problem of NIH syndrome for employees working in foreign market.

In this essay, we will examine the internationalisation process of IKEA, Swedish Company founded in 1943 and the world's lieder in supplying home furnishing at low price with imaginative styles and application facility. In addition, we will describe from the different frameworks that have sought explain the Internationalisation process, the factors that have taken this company to perform its international expansion. From to be a simple local shop in a small town in Sweden 60 year ago, to be an actual powerful multinational with more than 76.000 employees and shops in more than 43 countries.

This assignment had to be written for the class of Management and Organizations at Stenden University, course IBMS, first year. We had a group of 6 and had to work it out together. We were enjoying getting into the world of IKEA, the world’s most furniture store on the market.

To achieve the goal off affordable furniture, IKEA developed their famous flat-packaged and self-assembled model. The flat package model gave the ability to load more furniture in every transport, leading to cheaper transportation and also the ability to stock more furniture in the store, thus minimizing the risk of running out of a product between deliveries.

IKEA is an internationally known home furnishing retailer that has grown rapidly since it was founded in 1943 and is renowned around the world for its Scandinavian style. The majority of IKEA 's furniture is flat-pack, ready to be assembled by the consumer that helps in the reduction of costs and packaging. Moreover; IKEA carries a range of 9,500 products, including home furniture and accessories. This wide range of option is available in all IKEA stores and customers can also order much of these items online through IKEA’s website (Frynas & Mellahi, 2011).

Every country differs in culture which has been there for centuries. The international market is growing rapidly, with more and more multinational organisations entering new markets each day. In this assignment I will evaluate how the difference in cultures affects the performance of international businesses.

The success of the industry was the huge experiences in the product differentiation, cost leadership and retail market. IKEA unique concept is that furniture is sold in kits that are assembled by the customers at home. The company remains one of the world most successful multinational retailing firms, operating globally. This report will explains IKEA internal and external environment using PESTLE, PORTER FIVE FORCE AND SWOT. Furthermore IKEA globalisation and localisation strategy breakdown will be examined, CSR and ethic and recommendation will be also examined.

In multinational workplaces understanding how important the significance of cultural differences is larger than we might think. Organizations that are diverse have to work together because their functionality impacts the productivity of the workplace. It is vital to have an understanding the different cultures to develop a strong organization. Certain principles will help you acknowledge that different cultures exist within the organization. As a manager, you have to analyze the reasons for the development of the differences and

Making business abroad can be risky, but it can also be profitable for a company as well; thus the necessity to study in deep the country where the company will bring the business to. International companies are faced with many cultural challenges, when doing business across and inside of different borders. Identifying the significant cultural issues involved when evaluating the attractiveness of a particular location as a place for doing business can be crucial for a business. Aspects to consider when studying culture in a new place

IKEA is one of the largest multinational companies in the world dealing with several products. The company sells and designs furniture appliances and home accessories at an affordable price. Ikea has over three hundred stores worldwide enjoying the good name it has created for itself. While they are one of the most profitable furniture companies in the world there are significant challenges and threats that have been overcome and are still needed to be tackled.

The economy, the trade practices, and agreements are factors that help understand the purchasing power of customers, thus it deals with income, prices, savings, debts, and GDP. When a company has the intent of going for globalization, they have to carefully observe and study those factors, in order to have an appropriate marketing mix and in particular a price that is adapted to the country they are targeting. IKEA is present in industrializing and industrial economies where there is

Cultural issues different customers in the global market have different culture and this calls for a different strategy to handle their needs

The increase in globalization and protectionism is not only a challenge but an opportunity as well for the management of IKEA. The challenges that are being faced are competing against undisclosed forces and sourcing the top quality products from all over the world. The organization has a probability to enter the emerging markets through partnerships and joint ventures in order to explore these new markets. But at the same time, the company has to deal with the protectionist policies of countries in which it runs its business because of the risk that the host countries might impose high tariffs on imported goods.

Ikea was successful in entering the furniture retail market in Sweden because it capitalized on good timing and original ideas. At the time of Ikeas initial phases, furniture prices in Sweden rose 41% faster than other household goods between 1935 and 1946. Ingvar Kamprad, the founder of Ikea Saw this as a great opportunity to offer quality furniture at a much lower price than other retailers, that the majority of people can actually afford. Ikea was also able to overcome adversity through creativity in business processes. When initially traditional retailers fought against Ikea’s ideas and banned them from selling at the Stockholm Trade Fair, the took orders or got names of customers in order to sell to them after the event. On another occasion, they overcame trouble with the retail cartel by establishing manufacturing sources in Poland instead of Sweden. This actually resulted in lower costs for Ikea and therefore allowed them to sell products at even lower prices than before. They also differentiated themselves from other companies not only through price but also through store design and location. Instead of locating in downtown hubs, Ikea set up its stores in areas with a lot of land to provide ample parking space which went hand in hand with their concept of cash-and-carry retailing. Furthermore, within the stores established many basic practices, such as wide

In this business report on the global retail business IKEA, it will cover the nature of business, influences on operations, operation processes, operation strategies and how the business can sustain competitive advantage. IKEA was founded in 1943 by Ingvar Kamprad in Älmhult, Sweden. The business established after and with the money his father awarded him for succeeding in his studies, Kamprad sustained a cash inflow by selling pens, wallets, watches, picture frames, table runners, jewellery and nylon stockings at reduced prices to customers. Although, later on in 1958, IKEA was introduced as a leader of Swedish Furniture Company as they started to produce local furniture by the Swedish local manufacturers, which gained positive attention from their customers. Eventually, developing flat packs of furniture for storage and self assembly, making their signature style of IKEA and turning the small business into a global sensation.