Ikea Case Study Analysis

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IKEA- Case Study
Political Risk
Is the possibility that an unexpected and drastic change due to political forces will result in adverse circumstances for business operations. * 1998 the Russian Monetary policy finally collapsed-This caused a MACRO POLITICAL RISK for all companies operating in Russia, including foreign companies. * Due to this INTERNAL THREAT, all foreign companies left the country.
IKEA also faced a political risk in Russia in terms of ORGANISED CRIME:
Although developing markets hold jaw-dropping potential, it often remains just that. Realizing potential from developing markets is incredibly challenging. Companies often find that the institutional (cultural, political, and economic) environments in the
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Examples are: IKEA (differentiate in design + low cost), Toyota (quality – although under pressure + price) and Ahold (quality + price). Just competing on price isn’t good enough anymore. Therefore we enter an interesting new era of strategic management in organizations.
Marketing Strategy- standardization
For products, they used a standardized approach, the reason they used this approach was because it is a common strategy for IKEA that when entering new markets they usually more or less use the same product range in all new countries-irrespective of what is considered popular by local customers. Their justification for this strategy was that the needs are pretty much the same in Sweden and Russia and through their market knowledge and IKEA range, they would be successful.
They adapted in some ways to the needs that could be satisfied within the range and to inspire customers with new solutions revolving round their existing range. They used the “Living with small spaces” solution in Russia. Since the average apartments in Russia are small and often house several families. Three generations often live under one apartment of about 50-60 square metres. Due to this IKEA considered the local preferences by adjusting their ROOM SETTINGS to reflect local conditions in terms of apartment sizes and the local traditions of furnishing. * Vital to understand customer needs.

IKEA exported its products

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