IKEA's Globalization Strategies Essay Example | Topics and Well Written Essays - 4750 words

IKEA's Globalization Strategies - Essay Example IKEA emerged as the brainchild of Ingvar Kamprad who through his business acumen gradually made the company emerge as the global leader in furniture retailing. Moreover Ingvar started developing on some key strategies pertaining to designing the products, assembling the final merchandise and reaching out to the different showrooms located along various areas. Further the furniture retailer also works in the development of different catalogues which helps in enhancing the shopping experience of the consumers. However amidst these strategies the company further dreamt of marching to gain control of international markets. In this foray IKEA first focused on gaining control of several European markets. The European markets were attempted in the first case for the company being Swedish in nature happened to share the like cultural mix with the European nations. Thus the attempt to gain the views of the consumers gained success in the first attempt. However when the same expansion strategy was carried out in regards to the Asian markets the strategy countered a huge challenge. It was found that Asiatic countries like China and Japan shared several cultural differences which were needed to be addressed first to let gain an effective international base in these nations. In countries like China IKEA had to render great amount of transformation in its policies pertaining to human resources and marketing activities. These policy changes helped the company in gaining large market share in China. Similarly in country like Japan the company in order to gain a larger market share had to adapt to a new culture of changing the pricing structure of its products. The company had to reduce the... Countries like China and Japan are analyzed in the paper to provide a detailed understanding of the nature of challenges faced by the company and strategic actions taken thereby to counter such. Strategic tools are incorporated in the paper like Ansoff and BCG Matrix to reflect on the internationalization activities of the company. Moreover the marketing mix elements of the company relating to its production, pricing, distribution and promotional activities are also analyzed to understand its business potential in gaining larger markets. Similarly the two countries China and Japan are analyzed on the basis of factor analysis pertaining to political, economic, social and cultural, technological, environmental and legal factors to understand its impacts on the activities of the business organization to gain potential markets. The paper in turn signifies the main problem areas which needed to be effectively tackled by the company in regards to seeking an effective market in the Asian co untries. IKEA is found to have largely adapted to the changing cultural needs of the Asian countries through rendering changes in the business policies pertaining to production, packaging and pricing actions. Such initiatives were taken by the company to help render quality goods to the consumers at affordable prices. This practice helped the company penetrate larger market areas. Local warehouses were also designed to help in reduction of logistics and transportation cost which again helped in protecting the natural environment. All such practices helped IKEA gain a formidable position in the Asian markets.