Resources on IKEA and Prices Around the World: IKEA China is a joint venture between the IKEA Group and the chinese government. This enterprise was an excellent way to test themarket, discover local demands, and change techniques to obtain a competitive edge. With that said, let us discuss more on the macro-environment and micro environment of IKEA in China. Please refer to the next step for futher explanation. Most manufacvtures start bydesigning a promduct and then figuring out how to create it at a certain cost Pricing is the most important factor for IKEA. IKEA canachieve cost leadership in various ways, including cost control from design to manufacture, changing the traditional role of customers,flat-pack strategy, and selling atmoshpere. Political the chinese government's and legal systems power trends to favor domesticbusinesses. This may be observed in China's difficulty in protecting intellectual property, leading to the emergencies of more imitationIKEA stores. The growth of internet shopping merchants, who can give similar products at lower rates. is also a challenge to IKEA.Economical chinese buyers demand good quality while seeking the lowest possible price., Alothough IKEA's costs were reasonablecompared to their European competitors, they were rather high compared to the chinese customer when they first entered the market.IKEA was obliged to slash prices due to this, which triggered a chain reaction inside the value chain, leading IKEA to search for methodsto cut costs in all sectors. Social IKEA did not adapt its businss pratices to fit into Chinese culture for a long period. Chinese consumersprefer western styles and frequently immitate them in various sectors, including home funiture. IKEA'S items are of great quality:therefore, expect hefty pricing. IKEA had difficulty balancing these expectations with the low prices of the Chinese furnituremarketplaces. Technology development of distribution systems, payment systems, the rapid development of information technology.especially in terms of social networking and advance e-coomerce systems are all the technological factors that have a direct impact onIKEA China. Other factors the legal consequences of entering the Chinese market are numerous. IKEA had to form a joint venture toavoid these trade proibitions. While they retained management control, the expansion process was halted because property ownershipwas only allowed through the Chinese partner. This reduced IKEAS market reach in China, as well as the pool of potential customers.Opportunities the purchasing power of Chinese people is increasing in recent times or can say have hopped back to normal post-pandemic.

IKEA has been a multinational company since the 1970s. With total sales of £41.3 billion in 2019, it…

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Principles Of Marketing

17th Edition

ISBN:9780134492513

Author:Kotler, Philip, Armstrong, Gary (gary M.)

Publisher:Kotler, Philip, Armstrong, Gary (gary M.)

Chapter1: Marketing: Creating Customer Value And Engagement

Section: Chapter Questions

Problem 1.1DQ

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