IKEA IN RUSSIA
INTRODUCTION
Today, we present our analysis of the adaptation of a multinational in an emerging country. We chose to study the Ikea’s case because the company is the leader in the field of interior design and furniture. In addition, we chose to focus on the implementation of Ikea in Russia because the cultural differences between Russia and Sweden are important. This cultural distance shows the importance of brand policy and how it could have an impact on sales as well as its reputation due to poor market research.
Finally, it is interesting to see how a multinational company which is present in many countries could adapt to local culture despite its differences with it. This point is important to do business in
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When Ikea set up his first store in Moscow in 2000, expectations about the purchase behavior of customers do not occur: instead to focus on the accessories and small items, the request immediately focused on product categories rather unexpected, such as kitchens. Another objective was to implement IKEA production center in a low cost country. The Group therefore wishes to use the capacity of the country to supply its global network of stores. Under these conditions, a partnership is needed with Russia, which holds a quarter of global reserves of wood, but also has significant potential with regard to plastics and aluminum; interest also goes to the reactivation capacity dormant for textile and ceramic industries. To allow Russian suppliers to purchase industrial equipment needed, the group spent $400 million. In addition, he opened his own production unit in St. Petersburg.
In comparing the website of the company in Russia and in France, we saw that there were a lot of similarities between the two countries. In fact, the two websites have the same structure, the same ads and offers the same products. Furthermore, the website offers a delivery service.
However, we mentioned some differences between the two countries. First, the language isn’t the same. The Russian website is written in Cyrillic. In France, it’s possible to buy a product online whereas in Russia we only could consult it. At least,
International marketing or business is uniquely different from the local market because the product price, place and promotion is vastly different from what is been offered to local customers (Johansson, 2000) With the emergence of the information technology, cross border marketing has never been a distant dream. However, it has never been easier even for giant multinational companies to face challenges that come in international business. The biggest challenge comes from the culture which varies from country to country.
“She did something that in our society is unspeakable: she kissed a black man” (page 272). It is easy to interpret this character as a villian in To Kill a Mockingbird, but is she honestly a victim? This girl has grown up in poverty, has been beaten, and has had to take care of an entire household. Unfortunately, there is nothing that can be done to change that. She lives a painful lifestyle, and that lifestyle has transformed her into the person she will always be. Mayella Violet Ewell’s important character attributes, mistreated, skeptical, and melodramatic, have forged her into the villain that most people see.
This behavior brings competitive advantages to the European luxury brands. Moreover, customers in different countries have different purchase behaviors. For instance, some countries’ customers are willing to move away from common recognized brand, because they want to purchase more exclusive products. Furthermore, because of the increasing speed of globalization, people are more likely willing to travel between different countries. These travelers will buy luxury good during their trips. In fact, Chinese tourists contributed over one third of sales in Europe. The luxury goods industry should notice to adjust the actual demand between local people and tourists in Europe
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
Eastern Europe supplies products to over 6 million customers in 20 countries. Let’s analyse the potential of this highly
The marketing strategies of these two countries and their comparison with Western-based consumption marketers include, advertising in these two countries can be made via social media, and pricing can be cheaper because of low incomes in these two countries as compared to the incomes in the US. The products can also be available in stores such as supermarkets because internet connectivity in these two countries is low as compared to internet connectivity in the US where marketers can sell their products via the internet. Producers can also set up production facilities in any of the two countries because of cheap labor offered by both the Chinese as well as the Indian workforce; this will help in reducing their production costs as well as the final prices of their products. (Christoff & Eckersley, 2013)
The rapidly growth in sales of IKEA in its own country thanks to its innovative new concept in furniture and its reinforcement with polish suppliers, during the 1950s and 1960s, gave to IKEA the option to consider in going further of Swedish borders. Thus, in 1963 was opened the first Store in Oslo capital of Norway. This first step was a guideline to continue the expansion process IKEA has started, and helped to strengthen the internal market in Sweden with the opening of the biggest store in Stockholm in 1965, and the second international store in Denmark in 1969.
IKEA stayed in Russia during their economic downturn gaining respect from the Russian public and government. To say competitive IKEA has tried to lower cost without losing quality in their
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.
Considering France international reputation and image, it is useful to analyse its strengths and weaknesses, taking into consideration the important differences existing between standard and premium market.
IKEA also based on low cost to achieve hybrid strategy. Big items are all flat-packed that the customers transported and assembled themselves. This saves IKEA with shipping costs from suppliers and delivery costs to customers so that they can pass this benefit to customers through low price. In the stores, there are no armies of sales staffs. Customers are providing with tape measures and pencils so that they can self-served. This reducing the number of sales staff required. IKEA encourages customers to create value for themselves by taking on certain tasks traditionally done by the retailers and their low expectation on service levels keeps costs down. Additionally, IKEA choose most economical suppliers over traditional suppliers around the world. The company buys great volume of materials from suppliers to get the economies of scale. Since the labour in UK is expensive, their products are produced in
For IKEA the step into the Chinese market was a big step, maybe as big at the first
Working in Medicine has always been my dream. As a young child I was inspired by many doctors I have been with. Getting into Medical school, however, is my first step. Medical school is something laudable to get into. Medical school is my first trial into achieving my goal in medicine.
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
Further, with fierce competition, P&G¡¦s primary outlet in France would be to reach the French consumers through Perfumeries; however, finding shelf space in these retail stores is nearly impossible. Tapping the European market could prove difficult and costly.