Running Head: GLOBAL BUSINESS ENVORINMENT
Global Business Environment Interview
Introduction
The business personal interviewed for this paper is Mr. Jeff Anderson, who has been in the international business for more than a decade. Mr. Jeff is the senior International manager at IKEA and is working with IKEA since last 10 years. He often visits different countries that have IKEA stores; and has been to Europe, Middle East, North America, Australia and United Kingdom. IKEA is recognized as the global business of retail home furnishings and house ware and is counted in the list of firms that have adopted a rapid internationalization process (Hollensen, 2007). In fact, it is also known as the king of globalization when compared to many of its competitors in the furniture industry (Capell et.al., 2005). Currently it is offering more than 12000 products that are supplied by 2000 suppliers working in different parts of the world. Its products include; furniture, bathrooms and kitchen accessories, toys, decoration pieces and other such variety. Majority of these products are flat-pack and ready to be assemble by the consumer. Today IKEA has over 300 stores in different countries across Europe, Middle East, North America, Australia and United Kingdom. Mr. Jeff, the senior store manager is responsible for visiting the different countries where IKEA plans to open the store. Moreover, he is also do regular visits for making the necessary changes and handling key issues at
IKEA is a multinational group of company that design and sells home furnishing products and home accessories. IKEA founded in 1943 in Sweden by 17 years old Ingvar Kamprad, who was ranked as one of the wealthiest people in 2013. The IKEA’s name is an abbreviation of ‘Ingvar Kamprad Elmtaryd Agunnaryd’. Ingvar Kamprad is founder name, Elmtaryd is the native farm and Agunnaryd is his native village located in Smaland, South Sweden. In 1943, Ikea operates mail order sale business where to sell everything such as pen, photo frame, watches and ladies leggings. Until 1958, the first IKEA store was opened in Amhult, Smaland. As of 2015, IKEA group has grown into worldwide brand own and operate 373 stores
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.
IKEA is an abbreviation of Ingvar Kamprad Elmtaryd Agunnaryd. The initials come from the name of the founder, the farm where he grew up and his home parish. The firm has grown rapidly since it was founded in 1948. From a very young age, Kamprad started selling furniture and he always kept his low costs - so low that other furniture stores pressured the National Association of Furniture Dealers in Sweden to stop providing Kamprad with products. The first store of IKEA was opened in Almhult, Sweden. The next stores are in
IKEA pays much attention to its IHRM management, applies innovative HR practices and tries to benefit from development of each individual within the company. The company is regarded as an attractive employer and has gained several prestigious awards in different countries (e.g. UK's Best Workplaces - Large Category, 2012).
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.
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
The executive decision was made to “hand over” all business responsibilities to me, making me fully accountable for both management and overall sales performance. By the following Monday, I was the proud “owner” of three stores producing three million dollars’ worth of business. I might add the fact that Danish culture supports a socialist mindset which in theory, contradicts capitalistic practices. Without a doubt, a new, pioneering commercial solution was required to address the task at hand – expeditiously.
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.
The selected company that portrays the elements of globalization is IKEA, a multinational corporation originated from Sweden, which currently owns and runs 351 stores in 46
RETAIL INTERNATIONALIZATION AND THE ROLE OF KNOWLEDGE SHARING – THE CASE OF IKEAs EXPANSION INTO THE RUSSIAN MARKET
IKEA is the largest furniture chain in the world, and in 2011 the Swedish company operated over 270 stores in 25 countries. In 2011 IKEA sales soared to over $35 billion, or over 20% of the global furniture market. Most of its stuffs believed IKEA will massive growth throughout the world in the coming decade because IKEA could provide what customer wanted: good design, and good made contemporary furniture with an affordable price. In one word, IKEA’s global approach focuses on simplicity, attention to detail, cost consciousness, and responsiveness in every aspect of its operations and behavior. (Jones, 2013)
The stores have restaurant, childcare facilities and plenty of parking. Customers can drop off their kids at the playroom and have delicious meal when they are tired. All of these not only provide customer with a comfortable shopping environment but also let them make an ‘IKEA trip’ and enjoy the fun of buying. Besides, IKEA’s distinctive show rooms help creating differentiation. Products are strategically placed in different small spaces like rooms which allow customers imaging this furniture in their own home. This makes everything looks more attractive.
The organization has mastered the art of doing business internationally and is considered to be one of the strongest global entities in today’s world. Although IKEA has succeeded on many levels, leaving the competition far behind, there are a few possible threats the company may face in the future while doing business:
Today’s international market is a complex and dynamic environment with significant ongoing changes. When a company is looking to internationalise there are numerous factors that they must consider. It is crucial that the business has a vast knowledge of the business environment they are entering if they wish to succeed in their chosen market. It is also important to acknowledge the variation of markets across as