Expanding Ikea into China: An Analysis

Located in Eastern Asia, China is a country known for being a worldwide economic superpower that has had a communist government for several years. Beginning in 1978, China, under Deng Xiaoping’s rule, began to incorporate capitalistic ideas in the government. Deng created various reforms unlike any of the policies or reforms in prior years that began to reconstruct China’s economy through modernization and by establishment of international trade.

Introduction: As this report has comprehensible decision oriented approach. It is divided in 3 parts which describes the various problems identifications and assessments faced by IKEA across its market as the company is moving toward Globalisation.

This paper aims to demonstrate a detailed description of the elements of ‘IKEA’ company based on its famous name in the furniture industry.

In foreign relations, trade had a marginal value and foreign investment both inwards and outwards were essentially absent. One of the greatest failures of Mao’s notable project ‘Great Leap Forward’ in 1958 turned out to be one of the greatest failures as it was intended to collectivize all agricultural, industrial and service life under people's communes and militias’ control . The first consequence of this measure was an economic autarky that led to one of the worst famines of the twentieth century. Developments in international policy pushed China towards a gradual isolation and growing conflicts. Eventually China's international political and economic relations degenerated and led to a serious military confrontation with its main ally, the Soviet Union and fighting a border war with India in the 60s. Isolation, political and economic, reaches its highest levels with the outbreak of the Cultural Revolution in 1966 until 1976 .

China has always been renowned for being successful in the domains of science and arts, however in previous decades, China has been ravaged by famines, civil discomfort and foreign outsourcing. China was consumed by this injustice until well after the Second World War when Mao Zedong introduced Communism adapted from the U.S.S.R, and created an autocratic socialist system which imposes firm constraints upon the Chinese social, political and economic system. It wasn't until the 1980's China's following leader Deng Xiaoping who focused focused on developing China into a

Here’s the question, how dose China relate to the world. We all know when Mao said that China as stood up. He meant that China was ready to meet with the world community. So how did Mao and China relate with countries such as Soviet Union, Vietnam, Taiwan and the United States. How did Mao and China approached and reapproached the United States and the world. So after china said it stood up, it started great relationship with the United States and the Soviet Union. Then it all started to deteriorated in the 1960’s and relations between China and the United states soured. It even soured worse with the Soviet Union, which caused the Sino/Soviet split. Which is why China had a shaky start in relations with the United States and the Soviet Union. To this day, China as an on/off relationship with the United States.

U.S.A started to open the link between China and the U.S.A by sending in a U.S table tennis team in 1971/1972, which can be proved by the “BBC Cold War Programme.” President Nixon then went to visit China in 1972 which was one of the key turning points in China’s relationship with the west. A quote from Nixon “we can not be cut off from a quarter of the worlds population” proves that Nixon and the U.S.A had realised how big China was, and wanted to ally. Another quote from the “Modern World China Textbook” from President Nixon “The U.S and China have no fudamental interests that need to collide.” Proves that the most powerful men in the world were recognising China as an important nation a major power with the world influence!. This was unlike the situation in 1960 when China was open to be exploited by the west. Since the Nixon visit other western leaders that have made frequent visits to China. Trade has developed and tourism is well established. Approximately 120,000 Chinese students studied in the U.S.A since 1978.

The process of globalisation in China has been a rapid one. China’s exponential growth since the fall of Mao has lead to increased international influence – with China now operating on an international scale.

Many Chief Executive Officers and top management teams of giant corporations, within North America, Europe, and Japan, acknowledge that providing the correct training model is the most vital challenge that they are challenged with today. They are mindful that it has become even worse during the past decade to identify internationalization strategies and to choose which countries to execute business with. Nevertheless, most companies have stuck to strategies they have conventionally used, which emphasize standardized approaches to new markets while sometimes experimenting with a few twists locally.

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.

China has had a long and rich history that is not devoid of its fair share of revolutions and political upheavals. It is these changes that have increasingly shaped the country into becoming one of the major economic powers of the current decade. This has also given the country a greater standing when considering the political influence that the country now enjoys in the global environment. One may consider the period that span three decades from 1890 as having the greatest impact in the trajectory that modern day has taken in the past and is going to take in the future. This period saw a number of very significant changes both in ideology and belief that provided china with the opportunity to take a new direction. One that was separate

In doing business so many times an organization must think globally. This might be done to increase sales and/or profits or to lower labor costs. In either case problems can occur due to ethical and cultural barriers in global expansion. In this paper I will attempt to show some of what a global organization and a cultural issue that affects their interactions outside the United States by identifying and comparing some of these cultural differences.

Organization wants to achieve the objectives of sustained growth and increased profitability, organization must constant innovation its product or service, also need to carry out some plans to expand its business to enable an organization to have a better development. Organization expands its business cannot be confined to the domestic market must also move abroad, which effectively allows an organization closer to the global market and broadening the scope of business and profitability. However, business expansion is not as easy in this global environment, globalization has not only changed the enterprise competitive landscape also influence the way leaders conduct business (Caligiuri, 2006). Furthermore, with globalization, global leadership in terms of cultural knowledge needed to become more acute and require more advanced level of cognitive ability on the complexity of managing the demand of multiple cultures while completing managerial tasks (Caligiuri, 2006, Grosse, 2011). Therefore, the development of global management skills is very important for the global organizations and managers. Only effective in developing global management skills can help the organization reduce the risk of international business

For IKEA the step into the Chinese market was a big step, maybe as big at the first

The world offers significant business opportunities for every company, however, opportunities are accompanied by significant challenges for managers. Managing global operations across diverse cultures and markets represents a big challenge and opportunity for companies. To compete in the global market and be successful, companies must learn the strategies, policies, norms and technology necessary to conduct international business. The opportunities for global expansion are numerous, and attaining success is a matter of developing the right strategy to win local markets and its consumers.