Ikea Way in Russia

2757 Words12 Pages
Case Study Report
IKEA in Russia

Emily Kane - 491340
Eleanor Jones - 491338
Silvia Blanco - 490319
Luis Felipe Hernandez - 490819

4th March 2011

Executive Summary IKEA began as a small company in Sweden selling small household items but in 1945 began selling furniture. IKEA has expanded to other European countries, Canada and Australia. Currently, IKEA is the market leader in the distribution of furniture and home decorative items. IKEA entered the Russian market in 1991 but did not open its first store until 2000 in Moscow. 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
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In Russia, IKEA has been operating since 1991, but did not have an open store until March 2000. The first store opened in Russia being in Khimki (Moscow). After March 2000, more stores have been creating. Since opening the first store IKEA has poured over $4 billion in the country. Russia became a good consumer that is why, IKEA plans to open more stores in Russia even with the minor setback with dealing with the government.

Current Marketing Strategy The strategy of the IKEA group in Russia was to invest in a market which can give a big profit in a long-term. While the other foreign companies started leaving their businesses from Russia, Ingvar Kamprad saw a big opportunity there, and started investing in the Russian market. The result was good, in Ingvar’s words: “IKEA becomes the main supplier of home furniture to the normal Russian families and our sales in Russia will exceed those in our old home country Sweden” (International Marketing, N. Ghauri & Cateora, 2010). The fact that Ingvar was the only owner who wanted to keep his company in Russia may give IKEA more power and a better competitive advantage in the future. The IKEA group sells quality furniture at a low price, to maintain a strong competitor. For that, the company has to try to cut cost without losing quality in the products that it sells. IKEA organized their stores in a different way than its competitors. While its competitors put its items in

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