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International Marketing Strategy

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BA (Hons) Marketing – 3rd year
Mathieu Chomarat: 06110827 Portobello College Year 2006-2007

International Marketing Strategy

Assignment 2: Ikea Case Study

Lecturer: Carmel Gernon Room: F6

Table of Contents

A Brief Introduction to the essay: 1
Macro-environment of Ikea in Brazil: 1
Politic and legal environment: 1
Economical environment: 2
Social environment: 3
Technological environment: 4
Environmental factors: 4
Market strategy entries: 4
Wholly owned stores: 4
Joint venture: 5
Strategy recommended: franchising 6
Success factors in Brazil 7
Know how to attract new customers 7
Be able to sell good quality products at a low price …show more content…

Furthermore, the government is willing to make the country more liberal. In this intent, Brazil is a part of the Common Market of the South, Mercosur which has founded Common External Tariffs (CET) for Argentina, Brazil, Paraguay and Uruguay, concerning a growing number of products. In the geographic area of Mercosur, the tariffs are also eliminated, and factors of production (labour or capital for example) can move freely. These CET apply for equipment goods at rates included between 0% and 14%[ http://www.septimanie-export.com/fr/fiches-pays/bresil/acces-au-marche] (numbers given for the tariffs applied on the CIF[ Cost Insurance Freight] price of goods). This is a big opportunity for Ikea, because reduced tariffs would reduce prices on their imports to Brazil if they set up one or more outlets there.

There doesn’t seem to have a special law limiting the size for big stores, which quite goes in the right way for Ikea.

Economical environment:
With emerging markets grabbing investors’ attention, many are turning their focus towards South American markets. Strong exports, high commodity prices and increased investments have been contributing factors to growth within many of the Latin American markets[ Ann-Marie Fleming, 19th of Jan 2007, seekingalpha.com, stock market opinions and analysis website].

The total Gross Domestic Product (GDP) of Brazil for the third quarter of 2006 was

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