IKEA

LECTURE - MAI QUYNH ANH (M.A)

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Team Member
Nguyễn Thị Quỳnh Nhi
Quách Gia Hân
Lương Thảo Anh Thư
Nguyễn Văn Hoàng
Đinh Nữ Tường Ly
Nguyễn Mạnh Hùng
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TABLE OF
CONTENT
01 Introduction and Overview
02 Domestic Enviroment
03 Uncontrollable elements
04 Foreign Environment
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INTRODUCTION

IKEA IS A FURNITURE BUSINESS GROUP OF

THE SWEDISH BILLIONAIRE INGVAR
KAMPRAD.OVER 50YEARSOF ESTABLISHMENT,
IKEA TODAYIS A HUGE MULTINATIONAL
CORPORATION WITH WOOD TRADE CENTERS
IN 43 DIFFERENT COUNTRIES AND HAS ABOUT
127,000EMPLOYEES. IKEA'S ANNUAL SALES
REACH OVER 12 BILLION EUROS. THE WAYIKEA
HAS BECOME A LEADING BRAND OF
FURNITURE RETAILING IS A MAGICAL STORY.
WITH HUNDREDSOF STORES ACROSS
EUROPE, ASIA, AUSTRALIA AND THEUNITED
STATES DOING VERY WELL, SERVING MORE
THAN 470 MILLION CUSTOMERS, IKEA IS
TRULYTHE MOST REMARKABLE GIANT IN THE
RETAIL INDUSTRY.
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THE HISTORY OF IKEA

IKEA FOUNDER IS INGVAR KAMPRAD. HE WAS BORN IN 1926
IN SOUTHERN SWEDEN AND GREW UP ON A FARM CALLED
ELMTARYD NEXT TO A SMALL VILLAGE IN AGUNNARYD.

THE INNATE BUSINESS BLOOD WAS CLEARLY EXPRESSED IN KAMPARD

SINCE HE WAS VERY YOUNG. AT THE AGE OF 10, KAMPARD DISCOVERED
THAT IT WAS POSSIBLE TO PURCHASE A LARGE NUMBER OF WATCHES IN
STOCKHOLM AND RESELL IN HIS TOWN FOR A HIGHER PRICE TO EARN A
SMALL PROFIT. AFTER THAT, KAMPARD USED THE MONEY TO INVEST IN
EXPANDING MANY ITEMS, FROM FISH TO ORNAMENTS TO DECORATE THE
CHRISTMAS TREE AT CHRISTMAS.

IN 1943, WHEN KAMPRAD WAS 17, HE WAS REWARDED WITH A SUM OF

MONEY FOR HIS GOOD ACADEMIC ACHIEVEMENTS. KAMPARD USED THIS
MONEY TO SET UP A SMALL COMPANY AND NAMED IKEA. THE FIRST TWO
LETTERS ARE THE ABBREVIATION FOR INGVAR KAMPARD, AND THE
FOLLOWING TWO ARE SHORT FOR FARM AND THE VILLAGE KAMPARD
WAS BORN AND GREW UP.

AT FIRST, IKEA CONTINUED TO FOCUS ON SMALL ITEMS, MAINLY

PARTICIPATE IN BIDDING FOR CONTRACTS TO PROVIDE PENCIL. SHORTLY
THEREAFTER, IKEA TRADED MORE ITEMS SUCH AS LEATHER PURSES,
WATCHES, JEWELRY AND SOCKS. FIVE YEARS AFTER FOUNDING THE
COMPANY, KAMPARD DECIDED TO PUT IN PLACE A MAIL ORDER SERVICE
AND DELIVERY ACCORDING TO THE MILK DELIVERY TRUCKS, RUNNING
MULTIPLE TRIPS DAILY IN THE REGION.

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+ IN 1947, KAMPRAD LAUNCHED FURNITURE AS THE MAIN PRODUCT GROUP

OF IKEA'S STORE SYSTEM FOR THE FIRST TIME. EXPLOITING SOURCES FROM
LOCAL PRODUCERS ALLOWED HIM TO KEEP PRICES LOW COMPARED TO HIS
COMPETITORS IN THIS AREA. IKEA HAS ACHIEVED GREAT SUCCESS IN
FURNITURE AND THIS SUCCESS HAS CREATED A REVOLUTION NOT ONLY
FOR IKEA BUT ALSO FOR THE FURNITURE INDUSTRY AS A WHOLE.
+ IN 1951, KAMPRAD DECIDED NOT TO PURSUE OTHER ITEMS, BUT ONLY
H I S T O R Y

FOCUSED ON FURNITURE.
+ IN 1953, IKEA OPENED THE FIRST FURNITURE SHOWROOM IN ALMHULT
UNDER THE EXCEEDINGLY PRESSURE OF ITS COMPETITORS. AT THIS TIME,
THE COMPANY IS IN A PRICE WAR WITH ITS MAIN COMPETITORS, SO THIS

I K E A
SHOWROOM HELPS CONSUMERS GET CLOSER TO THE COMPANY'S WOODEN
PRODUCTS, BECAUSE THEY CAN SEE, TOUCH, FEEL AND BELIEVE IN QUALITY
BEFORE MAKING A PURCHASE. FOR THE FIRST TIME IN THE FURNITURE
BUSINESS IN SWEDEN, CUSTOMERS CAN SEE FIRSTHAND THE PRODUCT
BEFORE MAKING THEIR DECISION. THIS HAS CREATED A HUGE ADVANTAGE
FOR IKEA IN COMPETITION.
T H E

+ IN 1963, THE FIRST STORE OUTSIDE SWEDEN WAS OPENED IN ASKER, A

NORWEGIAN OUTER CITY OF OSLO. BY 1969, IKEA EXPANDED TO DENMARK.
+ IN THE 1970S, IKEA CONTINUED TO PENETRATE OTHER EUROPEAN
MARKETS, WITH THE FIRST OUTSIDE SCANDINAVIAN SHOPS OPENING IN
SWITZERLAND (1973), FOLLOWED BY GERMANY (1974), FRANCE, RUSSIA,
CANADA, TO AUSTRALIA, HONG KONG. DUE TO THE INCREASING NUMBER
OF CUSTOMERS VISITING THE SHOPS ON THE OPENING DAY, KAMPARD
DECIDED TO CHANGE THE WAY THE PRODUCTS WERE DISPLAYED IN THE
STORE, ALLOWING CUSTOMERS TO FREELY VIEW THE PRODUCTS.
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IKEA ALWAYS AIMS TO FULFILL ITS MISSION:

TO CREATE A BETTER LIFE FOR AS MANY
PEOPLE AS POSSIBLE. TO DO THAT, IKEA
OFFERS ITS CUSTOMERS A DIVERSE MIX OF
FUNCTIONAL, WELL-DESIGNED FURNITURE
PRODUCTS AT AFFORDABLE PRICES. THIS MISSION
PRINCIPLE IS STRICTLY FOLLOWED BY IKEA
AND IS CLEARLY REFLECTED IN EACH
BUSINESS STRATEGY OF THIS LEADING
FURNITURE GROUP IN THE WORLD.

AT IKEA OUR VISION IS TO CREATE A

BETTER EVERYDAY LIFE FOR THE MANY
PEOPLE. OUR BUSINESS IDEA SUPPORTS

VISION
THIS VISION BY OFFERING A WIDE RANGE
OF WELL-DESIGNED, FUNCTIONAL HOME
FURNISHING PRODUCTS AT PRICES SO
LOW THAT AS MANY PEOPLE AS POSSIBLE
WILL BE ABLE TO AFFORD THEM

CUSTOMER'S
POINT OF VIEW
"CREATE A BETTER EVERYDAY EXISTENCE FOR THE MANY PEOPLE," THE
COMPANY'S MOTTO STATES. UNTIL TODAY, THIS HAS BEEN IKEA'S VISION.
ACCORDING TO KAMPRAD, THE COMPANY'S CREATOR, A VAST FORCE OF
RESOURCES SERVED A TINY NUMBER OF PEOPLE IN ALL COUNTRIES AND SOCIAL
SYSTEMS, AND IN BUSINESS, THERE WERE TOO MANY NEW ITEMS AND BEAUTIFUL
DESIGNS THAT COULD NOT REACH THE HANDS OF THE MAJORITY OF PEOPLE.
MR. KAMPRAD FREQUENTLY TELLS HIS STAFF THAT IKEA'S BEST PRODUCT IS THAT
NEITHER CONSUMERS NOR SELLERS ARE DISADVANTAGED; THEY ARE BOTH
SATISFIED. CUSTOMERS BENEFIT FROM COST SAVINGS: IKEA'S APPROACH WAS
CREATED WITH THE MOTTO OF SAVING CONSUMERS, FOR CUSTOMERS, SO THAT
CUSTOMERS CAN CHOOSE, TRANSPORT, AND ASSEMBLE THEIR FURNITURE AT
HOME. TO ACCOMPLISH SO, IKEA HAD TO GIVE UP A LOT OF TIME AND EFFORT IN
CREATING AND ASSEMBLING WOODEN PARTS IN A SIMPLE AND CONVENIENT
MANNER FOR ALL ORDINARY CUSTOMERS.
IKEA's ACTIVITIES
Currently, IKEA has branches in 43 countries, IKEA distributes almost all furniture
products such as tables, chairs, cabinets, beds, eating utensils ... and especially today,
IKEA specializes in providing products for children.
In order for customers to be convenient during the shopping process, right at the main
stores, IKEA also offers a restaurant service for dining, a rest and a children's play area.
IKEA's products vary in many ways. In terms of use, IKEA has all products from plants,
living room furniture to toys and all the kitchen utensils. In terms of style, these small
products can absolutely give your home a romantic style. However, usually, IKEA's
product is designed for the majority, which means combining its style and function, so
no matter what style you like, IKEA's product is for everybody.
In addition, IKEA products are researched and designed to be the least expensive and
still ensure quality. Therefore, IKEA products are considered cheap products. Moreover,
IKEA always seeks to minimize the environmental and consumer health harms.

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INTERNATIONAL
MARKETING MEANS

IKEA is purely a transnational company which is mainly a global company

with effect of an international company. IKEA focuses on standardization and
adapt to each and every market effectively. IKEA made all necessary MARKETING DECISIONS
adjustments to make sure there was no mismatch in its growth ambitions ARE MADE IN THE
and brand promise. In many countries, the Ikea business model has been INDIVIDUAL COUNTRIES,
subtly tweaked to fit local preferences and customs. Opening hours are WITH STAFF WHO IS THE
altered, menu options are adjusted and very occasionally, women are MOST KNOWLEDGEABLE
airbrushed out of catalogs. Therefore, IKEA is a global company, their ABOUT THE TARGET
marketing strategy is oriented international marketing. When taking an MARKETS. THEY FOCUS
international marketing approach, IKEA will either move headquarters ON CUSTOM-TAILORING
‘marketing employees to foreign countries, or hire expert marketing OR CREATING NEW
personnel in the foreign country. PRODUCTS AND
First of all, IKEA operates their branches in more than 41 countries such as SERVICES TO TARGET
Germany, China, Japan, Korea, Taiwan... In different countries, they are THE MARKET IN A
adapting their products to sell in the diversity culture. For this adjustment, SPECIFIC COUNTRY.
they work with an ethnographic approach, conducting field research
through home visits, interviews, and panels. This leads to consumer insights
which are used for product development and which helps the catalogue
creators to plan the content and styling of the different editions (Quito, 2017).
In addition, IKEA’ s product lines in the catalog vary somewhat from country
to country: the kitchenware section in India will feature spice boxes and idli
(rice cake) makers, according to the AFP, while its Chinese cousin goes heavy
on woks, cleavers and steamers. Moreover, IKEA also had to adapt its location
and do-it-yourself (DIY) assembly concept to China. Since labor is cheap
there, most of the people don’t feel like assembling furniture themselves.
IKEA also are faced with the challenge from the habits and behaviors of
Chinese customers. Many customers do not hesitate to remove my shoes and
jumped into bed IKEA store's display to "make a dream". Therefore, IKEA put
a notice board at the entrance to hope to disband the group who are always
sleep on IKEA’s bed with the message: "Your actions influence directly to
IKEA."
Finally, we said that IKEA is affected by international marketing is because of
their philosophy that always focuses on customers' demand. Whenever they
come to a new country, the first thing they do is asking and adapting in order
to fit to each specific market. In China, in order to adapt to this market, IKEA
have to reduce cultural distance, add typical Chinese attributes to their initial
products. For instance, in China, IKEA's store must have balcony gallery
because in Mainland's culture, balcony is a common definition in the home
in China. Those showrooms which placed in Eastern China will display the
drying room furniture for balcony, while stores from the North will provide
products for storing food in balcony. Other example is in Hong Kong, where
IKEA had to reduce their size beds because houses here are designed for
beds that are smaller than standard size.
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 PRODUCT
THE IMPORTANCE OF OFFERING A PRODUCT
SUITABLE FOR THE INTENDED MARKET
THE TREND FOR LARGER FIRMS IS TOWARD
BECOMING GLOBAL IN ORIENTATION AND
STRATEGY. HOWEVER, PRODUCT ADAPTATION IS
AS IMPORTANT A TASK IN A SMALLER FIRM’S
MARKETING EFFORT AS IT IS FOR GLOBAL
COMPANIES. AS COMPETITION FOR WORLD
MARKETS INTENSIFIES AND AS MARKET
PREFERENCES BECOME MORE GLOBAL, SELLING
WHAT IS PRODUCED FOR THE DOMESTIC MARKET
IN THE SAME MANNER AS IT IS SOLD AT HOME
PROVES TO BE INCREASINGLY LESS EFFECTIVE.
SOME PRODUCTS CANNOT BE SOLD AT ALL IN
FOREIGN MARKETS WITHOUT MODIFICATION;
OTHERS MAY BE SOLD AS IS, BUT THEIR
ACCEPTANCE IS GREATLY ENHANCED WHEN
TAILORED SPECIFICALLY TO MARKET NEEDS. IN A
COMPETITIVE STRUGGLE, QUALITY PRODUCTS
AND SERVICES THAT MEET THE NEEDS AND
WANTS OF CONSUMERS AT AN AFFORDABLE
PRICE SHOULD BE THE GOAL OF ANY MARKETING
FIRM.

MARKETING
MIX

THE IKEA PRODUCT RANGE IS WIDE IN SEVERAL

WAYS. FIRST, IT’S WIDE IN FUNCTION: YOU WILL
FIND EVERYTHING YOU NEED TO FURNISH YOUR
HOME, FROM PLANTS AND LIVINGROOM
FURNISHINGS TO TOYS AND WHOLE KITCHENS.
SECOND, IT’S WIDE IN STYLE. THE ROMANTIC AT
HEART WILL FIND JUST AS MUCH AS THE
MINIMALIST. AND FINALLY, BY BEING
COORDINATED, THE RANGE IS WIDE IN FUNCTION
AND STYLE AT THE SAME TIME, AND AT ALL TIMES.
NO MATTER WHICH STYLE YOU PREFER, THERE IS
SOMETHING FOR EVERYONE.

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DIMENSIONS OF QUALITY
· PERFORMANCE
· FEATURES
· DURABILITY
· AESTHETICS
· INNOVATIVE
· QUALITY MATERIAL
IKEA EMPLOYEES VISIT THOUSANDS OF HOMES EVERY YEAR TO CONSULT WITH
CUSTOMERS, IKEA TRULY UNDERSTANDS CUSTOMERS WHEN TALKING DIRECTLY
TO HOMEOWNERS. WHAT THEY UNCOMFORTABLE ABOUT ARE, WHAT DO THEY
NEED, HOW MUCH ARE THEY WILLING TO PAY… BY COLLECTING COMMENTS
FROM CUSTOMERS BY TALKING DIRECTLY, IKEA HAS CREATED GOOD
RELATIONSHIPS WITH THEIR CUSTOMERS AND BASED THEM ON RESEARCH TO
ENHANCE AND INNOVATE OUR PRODUCTS

PRODUCT STRATEGY OF IKEA

IKEA IS A VERY STANDARDIZED RETAILER, I.E., A CERTAIN SET OF MARKETING
STRATEGIES IS USED THAT IS THE SAME AROUND THE WORLD. INTERNATIONAL
MARKETING LITERATURE, ARGUES CONVINCINGLY FOR THE MORE ADAPTATION
(TO DIFFERENT MARKETS) IN DIFFERENT NATIONAL MARKETS. BUT IKEA MOSTLY
USED STANDARDIZED MARKETING STRATEGIES THAT ARE WHY IKEA IS
OFFERING ALMOST SIMILAR PRODUCT RANGE WITH LITTLE ADAPTATION IN ALL
THE COUNTRIES WHERE IKEA IS RUNNING ITS OPERATIONS.
IKEA, THE SWEDISH HOME FURNISHING RETAILER IS PRESENT IN THE FOREIGN
MARKETS SINCE 1973 (SWITZERLAND). THE COMPANY HAS TODAY IN 57
COUNTRIES AND IS EXPANDING IN MANY MARKETS. OVERALL, IKEA FOLLOWS A
QUITE TRADITIONAL PATTERN OF INTERNATIONALIZING TO NEIGHBORING
COUNTRIES AND MARKETS WITH A SIMILAR LANGUAGE BEFORE VENTURING
INTO MORE EXOTIC MARKETS. IKEA MARKETING STRATEGY IS EITHER FAIRLY OLD
OR IS OFTEN DONE FROM A VERY GENERAL PERSPECTIVE WITH LITTLE EMPHASIS
ON MARKETING ACTIVITIES IN SPECIFIC COUNTRIES AND ALSO WITH LACKING
UNDERSTANDING OF WHAT STANDARDIZATION AND ADAPTATION MIGHT MEAN
IN A RETAIL PERSPECTIVE. THIS IS SOMETHING THAT WORKS IN EUROPE AND
THE US BUT IKEA, LIKE OTHER RETAILERS, ADJUSTED THEIR STRATEGIES TO THE
VERY DEMANDING AND DIFFERENT ASIA MARKETS, LIKE IN SWEDEN IKEA HAS
BEEN OPERATED SINCE 1953 (THE FIRST STORE IN 1958), THE UK SINCE 1987 AND
CHINA SINCE 1998. CHINA IS, OF COURSE, DIFFERENT IN THIS RESPECT SO IKEA
TOOK SLIGHT CHANGES IN THEIR STRATEGIES WHILE WORKING IN CHINA.
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PRODUCT
STRATEGIES

For IKEA the step into the Chinese market was a big step.
Initially, IKEA implemented its standardize strategies in
China as IKEA implemented in Europe, as a result, IKEA
faced drastic problems in China. For instance, IKEA is used
to be perceived as having low prices in Europe and the US,
this also one of the competitive cornerstones of the whole
concept of IKEA there. But this is not the case in China;
here the perception is a fairly exclusive western retailer, a
store of expensive products for the higher middle class.
Because of it, IKEA was facing the problem of Coping in
China as many Chinese shoppers in IKEA were drawing
pictures of the furniture and scribbling down descriptions
of the products but not necessarily buying them.
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After facing a lot of problems, IKEA decides to change its strategies in China by
considering Chinese culture and Chinese consumer Behavior. Then IKEA targets
different groups of people in China than in countries later in the IKEA ‘life cycle’
(i.e. life cycle based on how long IKEA has been on a market). The main target
group is female customers – 65% of all customers, women (age 30-45) according
to IKEA, stand for change in China and they welcome change. Men are also part
of the target group but more indirectly as women are the ones in the family
having home furnishing interests and making the actual decisions
Initially, IKEA offers an entire range of products in China but the Company
observed that in the country most customers buy what IKEA calls market-hall
products, i.e., everything but furniture. Another problem is that the Chinese see
IKEA products as innovative and not traditional. In China, square tables are for
example not traditional (round tables are a tradition) and many of the colors
used are not traditional to the Chinese.
While IKEA has accepted that to some extent, the main strategy has been to
cut more prices. IKEA tries to position itself as a company with a unique
competence when it comes to interior design. Helping customers with this is
the basic message, rather than selling individual products at low prices but
affordable prices. Many Chinese live in small apartments and IKEA can help
with smart solutions for the shortage that makes life easier. In China beds sold
are shorter (190cm) than standard-sized beds (200cm), mattresses are more
rigid than one in the US. Chinese live in an apartment with balconies and this
space or the apartment is very important to the Chinese. IKEA has added
settings in the store that show how Chinese can furnish your balcony and a
special balcony section in the stores. In northern China, where people use
balconies to store foods, IKEA designed different balcony models while in the
other area, the balcony model will be suitable for the space usage habit of
washing and drying.
IKEA also offers products having cultural and traditional essence of Chinese like
chopsticks, wok with a lid and a cleaver, a special set of teacups, small beds,
etc...
 PRICE

Pricing is an important issue in international marketing. This article relates to

the concept of price, how to respond to a price change in international
markets, the marketing mix and price, customer response to price changes,
setting objectives for international pricing, key questions to ask in
international pricing, and the threat of competition in international pricing.
(Richard Lancioni, 1988) Price is also a significant element for the social
element between the seller and the buyer. It makes an agreement and
shapes the relationship between them for the long term

IKEA’S FIRST SITUATION IN CHINA :

In 1998, IKEA started its retail operations in China. At that time, one of the most
challenging problems for IKEA was its prices, considered low in Europe and North
America, but were higher than the average in China. (Valerie Chu, 2013) The reason
for that issue is prices of furniture made by local stores were lower as they had access
to cheaper labor and raw materials, and because their design costs were usually nil.

In 2006, when Ian Duffy was first put in charge of Ikea's China stores four years ago,
he spent hours at the checkout line observing customers. He didn't see many.
Instead, he saw plenty of people crowding the Beijing store for freebies - air
conditioning, clean toilets and even decorating ideas. Adding insult to the injury:
Shops right outside were offering copies of Ikea's designs at a fraction of the cost.
Although China boasts the world's fastest-growing economy as millions join the
ranks of the middle class, the Chinese are famous for their reluctance to spend their
money, saving on average 30% of their income, one of the highest savings rates in
the world
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IKEA PRICING STRATEGY IN CHINA :

According to the above situation, for IKEA, reducing prices is the most efficient process for the
company to attract consumers in the China market. Cutting the prices of the products is the most
effective strategy to increase sales in the market. IKEA has become the middle-class trade name
in the China market. Though there is no shortage of well-off customers for the company still the
company has decided to cut down the prices for the Chinese customers to maintain the
corporate image in the market. After the price reduction, IKEA has aimed to attract Chinese
families with having monthly income of 3,350 RMB (Molin & Magnusson, 2016).
In starting, most of the products of IKEA in China were imported in which import tax and
transportation costs were included. To maintain the lesser prices of the products without giving
up the superiority of the products, IKEA has adopted many cost-saving methods in the business.
The most effective method for IKEA is to source locally. Now, 70% of the products of the company
are produced in China (South China Morning Post, 2013). It can be seen that IKEA uses the
pricing methods as the key strategic tool to capture and create customer value in China market.
The pricing policy of IKEA is customer value-based pricing (good value pricing*) because IKEA's
price in China is quite low, however, the quality of the product is as high as the same one in other
countries. Compared with other competitor companies, even though IKEA is not the cheapest
furniture manufacturer, the things that they offer for their products make it a "good value"
purchase. Ikea realized that customers valued high quality and high service (Ikea Assurance), but
couldn't necessarily afford the more expensive furniture, so they created reasonably-priced
product lines that offer high value to consumers. Ikea has created this "customer perceived
value" by offering the best service in China such as home delivery, home assembling, and a good
return policy.
·Good value pricing: offering just the right combination of good quality and service at a fair price.
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PLACE
The Place or distribution Place is concerned with making available the products
at a place where (s) he demands. Thus, it is concerned with the store where the
goods shall be displayed and sold, the channels of distribution and logistics
management through which goods will flow from marketer to consumers.
Chain or path or route in the channels may be a marketer to consumer or
marketer to retailer to consumer, or marketer to a wholesaler (also referred to as
distributors) to retailer to consumer, or agent to wholesaler to retailer to
consumer. The organizations between the marketer and the consumers are
known as intermediaries. Each one of them has an important role to play.

IKEA is the world’s biggest furniture retailer, it has more than

1600 suppliers to manufacture products and efficient
delivery of these products to 186 stores all over the world. It’s
enough to prove that IKEA's marketing mix strategy is
successful. IKEA’s 28 center warehouses and distribution
centers controlled the transport process in different 16
countries. The role of the distribution center is to gather
goods and products from all over the world and then unify
dispatching those products to different areas. In general, one
country has a unique distribution center. As shown in figure
1, IKEA believes that it should be a more efficient way of
centralization (Abrahamsson, 1993). With the rapid increase
of Ikea distribution scale, it will have a new challenge that is
a distribution center services multiple markets in the future
(Distribution/ warehouse in IKEA)
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IKEA’s whole supply chain goal is to reduce the total cost of delivery, guarantee
the quality of products. At the same time, it also can keep lower environmental
impact (Larsson and Qviberg, 2004). IKEA distribution channel members
include that manufacturers, dealers, wholesalers, retailers, and consumers. In
order to keep the advantage of low prices on the products, IKEA must use the
most direct and cost-effective way to transport the products from supplier to
customer (Figure 2). Moreover, this approach can achieve the lowest bad
environmental impact. Usually, IKEA’s products are adopted packed flat that
would make the products easier to be stackable. This way can save space and
deliver with great efficiency.
IKEA placed manufacturing plants on the east coast of China to facilitate
production because the Chinese population in those regions did not
concentrate much. Besides, other Chinese factories are also located on the east
coast of China, so IKEA can easily get materials. Being located on the east coast
of China also creates favorable conditions when IKEA wants to get materials
from abroad. Shipping by sea will help IKEA easier and also save costs.
 PROMOTION
Advertising is the non-personal communication of information
usually paid for and usually persuasive in nature about products,
services or ideas by identified sponsors through the various
media.”-Bovee Promotional activities of various countries and their
Advertising Laws Advertising Regulation: Advertising regulation
refers to the laws and rules defining the ways in which products
can be advertised in a particular region. Rules can define a wide
number of different aspects, such as placement, timing, and
content. In the United States, false advertising and health-related
ads are regulated the most. Many communities have their own
rules, particularly for outdoor advertising. Sweden and Norway
prohibit domestic advertising that targets children.

IKEA PROMOTIONAL STRATEGIES :

IKEA's advertising campaigns were based on unique marketing conditions

and cultural sensibilities of each country, which varied significantly across
markets. For example, European advertisements, especially in the UK,
were more straightforward than those in North America, which were
generally wittier. IKEA was present in some countries such as Canada,
Australia, and Germany for over twenty-five years while in countries such
as the US, Britain, and Italy, it had been around for only a little more than
a decade. Over the years, IKEA had worked with different advertising
agencies to bring out some of the most creative and unconventional
television spots across the globe. For these reasons, an IKEA account was
considered a choice catch as it allowed the agency the freedom to explore
some interesting and unexplored ideas.

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 IKEA PROMOTION IN CHINA :

OUT OF THE BOX APPROACH IKEA is known for its ‘out of the box
thinking when it comes to creating interest for IKEA and its products.
IKEA start a TV show in which viewers were offered lessons in home
decorating IKEA has run many different ads in China, on TV, in
newspapers, and in print. Themes in campaigns are the same as
everywhere in the world but with the Chinese twist (be different, break
tradition). Maybe the IKEA advertising line in China is a little ‘softer
than in other places like in the UK. More humble advertising, do not
stand out very much, friendly, home furnishing solutions, educate the
consumer, offer partnership for the future in new home furnishing
solutions. The ad featured below is typical: The message of the ad is
‘Small changes, a refreshing new life. Life can be made better, easier,
and nicer with small means. Small changes are the keyword in IKEA
ads and in-store. Other ads that IKEA has run have the theme of “do
not be like your parents”, a theme that seems to speak directly to
IKEA’s target group of young women 25-35 years old (Lewis, 2005).

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PRACTIVITIES:
PR activities are also important involves
taking Chinese journalists to Sweden and
Älmhult, teaching them about Sweden and
IKEA and the roots of the company In most
markets, the company uses its product
catalog as a major marketing tool. In China,
however, the catalog provided
opportunities for competitors to imitate the
company's products. Local competitors
copied IKEA's designs and then offered
similar products at lower prices. IKEA
decided not to react, as it realized Chinese
laws were not strong enough to deter such
activities. Instead, the company is using
Chinese social media and micro-blogging
website Weibo to target the urban youth

CATALOGUE – BROUCHURES
One of the big differences when it comes
to communication with the consumer in
China compared to the rest of the world is
the reliance on the catalogue. Here it is
impossible – cost and reaches wise – to
distribute it like in many other countries.
The catalogue is distributed in the store
and in some of the primary market area
but here the reliance is more on smaller
brochures that are sent out several times
during the year. These brochures are
produced by the same people in Älmhult
in Sweden that produces the catalogue, in
order to make sure that the brochures
have the same layout and IKEA ‘feel’ as the
catalogue itself

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IKEA
2021
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DOMESTIC ENVIRONMENT
Uncontrollable

Work and social democracy

The story of Kamprad as a self-made businessman fits the image of Sweden as an
entrepreneurial nation in a
new economy focused on innovation and small,
knowledge-intensive firms.
The story is quite conventional and follows the universal storytelling pattern of the
“monomyth” in narrative mythology, in which a hero reluctantly sets out on an
adventure and is forced to go through a series of trials before he can return home
with the sacred objects. A central theme in the story of Kamprad, as IKEA tells it, is
that of the heroic entrepreneur who overcomes obstacles posed by the market
through hard work.
The theme of hard work underpins a crucial aspect of IKEA’s business model: the DIY
concept. Every time a consumer enters an IKEA shop, she or he enacts the hero’s
journey by way of collecting, carrying, transporting, and assembling furniture and
products. By putting the consumer to work in the shop, IKEA also underscores an
important characteristic of the highly secularised albeit Protestant Swedish culture,
namely that one needs to deserve achievements: success relies on frugality. In
assembling the furniture by hand, the consumer partakes in a kind of ritual
celebration of hard work.
IKEA’s take on DIY and selling affordable products to the masses are also linked to
yet another well-known concept in Swedish culture, “Folkhemmet”, which literally
means the “home of the people”. This was a social-democratic political vision of a
good society – in which everyone is treated as an equal and has access to the
general welfare.
 INTERNATIONAL MARKETING
Modern trends
IKEA has been pushing the concepts of Lagom

have become trends, for
and Fika, which now
a long time. The cinnamon buns and small
cups of brewed coffee that are a staple of Fika
have always been offered in the canteen.
Nowadays, Fika is promoted as being part of
Swedish cuisine and lifestyle by a range of
different actors.
Lagom is an important concept in Swedish
culture and it’s closely tied to something called
“Jantelagen”, which is an unwritten law that
means that people should never consider
themselves superior to others. The myth of
Kamprad’s humble, frugal lifestyle exploits this
particular outlook to further link IKEA to
Swedish culture.
It is also promoted as part of the company
culture. While IKEA is rumored to give
employees a Christmas bonus, it does not
allow business class travel and excessive
company parties. Recently, the company also
launched the “LAGOM project”, which aims to
No room for
help consumers to live more sustainably.
feminism?
IKEA strategically exports Swedish values to create a

certain image of Sweden. The fact that the Swedish

government also promotes these values to market the
country shows how powerful it has been. But in painting
this picture, IKEA has also left out other values which
are equally important to what it means to be Swedish,
giving a skewed image.
One example is Swedish feminism. The current Swedish
government has declared itself as the first feminist
government in the world. More recently, the #metoo
campaign was turned into a powerful movement in
Sweden, which enabled women across different
professions to speak with a collective voice about
harassment in the workplace.
It remains an open question whether and how feminism
will be treated in the promotion of Sweden and IKEA.
Last year, despite its Swedish origins, IKEA had to
apologize for and withdraw a sexist advertisement in
China.
IKEA may strategically use Sweden in its communication
efforts, but the relationship is not always symbiotic.
BUSINESS 1. Offering the lowest prices. Cost-effectiveness is one of
the solid bases of IKEA's competitive advantage. The global

STRATEGY furniture retailer is able to offer low prices thanks to a

combination of economies of scale and technology
integration into various business processes.

2. Increasing variety of products. A great range of

products also belongs to the list of IKEA competitive
advantages. There are 9500 products across in IKEA
portfolio and the company renews its product range
launching approximately 2,500 new products every year.
The company is also increasing its presence in the food
and catering industries

3. International market expansion strategy. The home

improvement and furnishing chain have traditionally
engaged in new market development in an aggressive
manner. IKEA Group operates 422 stores in 50 markets
around the world. 19 new IKEA stores opened in 2018
alone. Additionally, IKEA has 22 pickups and Order Points in
11 countries, 41 Shopping Centres in 15 countries, and 38
Distribution sites in 18 countries.

4. Benefiting from strategic alliances. The global

furniture retailer benefits from strategic alliances to a
maximum extent and the formation of strategic alliances
is placed at the core of IKEA's business strategy. The list of
the most successful collaborations includes a partnership
with Apple to explore the possibilities of Augmented
Reality as a tool for home-furnishing, partnership with
LEGO for new product development, and partnership with
Adidas in knowledge sharing about customer behavior.
Experience and competency in the formation of strategic
alliances can be specified as one of the most important
IKEA competitive advantages.

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 INTERNATIONAL MARKETING

IKEA Competitor
Analysis

IKEA is a furniture manufacturing and retail brand with a leading position at the international
level. The company was introduced in 1943 to become the best furniture seller all across the
globe. The focus of the company for its products was on minimalistic design. innovation, self-
assembly, and self-service concept which has provided the company a competitive advantage
over the years. The self-assembly and self-service concept of the company have aided the
company to achieve its long-term growth and success. There are several other furniture
sellers in the furniture industry which makes it crucial for IKEA to analyze the micro external
environment and different factors affecting the industry.
The furniture industry has been battered on most occasions but IKEA has always fared better
than its competitors. This is because the company has put in place good cost-cutting
measures that have enhanced its profitability. On the other hand, it has also enhanced the
value chain thereby giving customers a real experience. There is an argument that most
furniture retailers sell furniture while IKEA concentrates on selling experience. Furniture
retailers in Sweden include Mio Group, K-Rauta, Duxiana, EM, and Stalands Mobler.
The company has done a fair job by adapting to the local market than its competitors. This
has been enhanced by efficient logistics where they go to customers with good designs. Mio
Group has been a big competitor in Sweden but IKEA has employed good business strategies
to remain afloat. The company has continually found itself in price wars after it published its
catalogs.
Competitors have seen this as a way of eating into their market share. They have argued that
IKEA is charging low prices to discriminate against them. IKEA’s products are mainly designed
in Sweden but they are manufactured in other countries (IKEA 21). This has been used to
reduce costs that the company might incur in the course of transporting furniture.
IKEA has always attacked its competitors with innovation and in the process managed to
remain in business. On the other hand, they have also rewarded their customers with a value
that is good for a company to remain competitive. Low-end retailers like Stalands Mobler
offer low prices but their services and products have been of poor quality. In addition, IKEAs
competitors have been low-end retailers rather than high-end retailers. The company’s
strength is in good and fascinated designs at affordable prices.
 INTERNATIONAL MARKETING

In 2020, IKEA’s online sales surged 45% over

the 12 months to August as millions of
people turned their homes into makeshift
schools and offices. Over 4 billion consumers
visited IKEA’s website during the period. The
surge in online sales was wiped out by low
in-store sales leading to a 4% drop in
revenue for FY2020 to $46.7 billion. Its
FY2020 revenue is about $1.5 billion lower
than in 2019.

Economic
Condition

IKEA is today a multinational corporation and not a
Swedish company anymore. Less than 20 of the
≈$550 billion GDP (0.5% or so of the Swedish GDP).
The main office is nowadays in The Netherlands and
their banking is mostly done in Liechtenstein. Most
of their production is today done in Poland. Their
products do however lower the living costs quite
significantly especially for young families and
students.
The major part of their €41.3 billion in FY19 retail
sales has nothing to do with Sweden but IKEA does
have three production facilities in Sweden. In
Malmö, Hultsfred and the original factory in
Älmhult. They also have stores in most larger cities
in Sweden and most homes in Sweden have at least
one item that has been purchased at an IKEA store.

Pandemic Effect

The owner of furniture brand IKEA accelerated profit growth in the 12 months
through August as shoppers kept at home by the pandemic spent more on
furnishing, and as lower wood prices helped to boost margins.
IKEA stores owner Ingka Group saw a 29% fall in operating profit in the year to
end-August due to the COVID-19 pandemic but predicts a recovery this year as
temporarily housebound consumers spend more on home improvements.
Inter IKEA Group, a franchisor to store owners, said on Tuesday its pretax profit
grew 13% to 2.02 billion euros ($2.36 billion). In the previous fiscal year, profit
growth was 5%.
The company, which generates the bulk of revenues from sales of goods to its
franchisees, said in September their sales shrank 4% in the year to 39.6 billion
euros because of COVID-19 and temporary store closures, although demand
picked up after they re-opened.
Inventories were lower as the pandemic disrupted supplies and shipping and
because of the later pick-up in demand. At the end of August, they were 15%
down from a year earlier. Inter IKEA produces about a tenth of goods and buys the
rest from suppliers. Three out of four IKEA stores closed temporarily for seven
weeks on average during the early stages of the pandemic. About 10% of stores
have closed again following new government measures to slow a second wave

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What differentiates IKEA from its Competitors?

IKEA has managed to differentiate itself from its competitors by

offering modern furniture designs at an affordable price. Its brand
image is also powerful, which has helped it gain customer loyalty and
market dominance in many countries across Europe and America.

What industry does IKEA compete in?

IKEA competes in the retail furniture market. It offers customers a wide
range of modern designs as well as other products related to home
improvement.

What pricing strategy does IKEA use?

It employs the cost reduction strategies of product differentiation and

cost leadership. These strategies have allowed the company to reduce
costs, which has enabled it to keep selling prices low while
maintaining a high-profit margin.
It’s clear that besides IKEA, there are several quality furniture
companies in the global market. To remain competitive and stand out
against its competitors, IKEA has focused on a customer-centric
approach. This strategy has enabled the company to maintain its
competitiveness and profitability by meeting the needs of modern
consumers keen on decorating their homes with high-quality furniture
items at affordable prices. The company uses various strategies to gain
competitive advantages, such as direct home delivery and simple but
classy designs that reduce costs.
INTERNATIONAL MARKETING

IKEA
FOREIGN
ENVIRONMENT
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 INTERNATIONAL MARKETING

The political environment encompasses the political party's features and policies, the nature of
the constitution, and the government structure, as well as the economic and commercial
policies.
The South China Morning Post reported in 2018 that Chinese media focused attention on Ikea's
shipping and product labels, which apparently violate the "One China" principle by naming
Taiwan and Hong Kong as different countries.
The issue here is that IKEA, as a foreign firm, was misinformed about China's political structure.
The Chinese government and the vast majority of Chinese citizens have never acknowledged
Taiwan as a separate country, rather than a part of the mainland.
As a result, when IKEA printed on their product labels stating Taiwan and Hong Kong are
independent of China, it sparked outrage on social media in this country. Mainland netizens
increased the pressure on the company by tweeting photographs of product packaging from
the popular furniture chain on Weibo, China's equivalent of Twitter, which elevated Taiwan to
the same level as India, South Korea, and the Philippines.

Political Forces
 INTERNATIONAL MARKETING

Cultural Forces

In 2017, IKEA is forced to pull a 'sexist' advert in China that shows a mother
threatening to disown her daughter if she can't bring home a boyfriend. The ad
shows a mother telling her single daughter: 'Don't call me your mom if you cannot
bring back a boyfriend. The video can still be viewed across the internet including
Weibo, Youtube, and QQ. Many internet users accused IKEA of supporting the
traditionalist idea of 'leftover women.' a cultural view that single women over the
age of 27 have little value or importance. Ba Ce Zhuan Yong, a Weibo user with
more than six million followers, posted online. 'Whether having a romantic partner
or not is one's own business and does not need any interference from others, let
alone an advertisement. This issue happened because IKEA did not concern enough
about Chinese culture before making the advertisement, so it led to a seriously
misunderstood. Finally, IKEA released a statement apologizing for 'giving the wrong
perception.' It said it was aware of the comments online and that it would change
the advert.
Countries with cultural similarities can generally be approached more easily as
compared to countries with cultural diversity. The social environment also affects
the motives to make a buying decision and the communication strategy needs to be
customized as per the varied social traits for a different markets.
 INTERNATIONAL MARKETING

Geography and
Infrastructure
Geography is the study of the physical characteristics of a particular
region of the earth. Involved in this study are climate, topography,
and population. The interaction of the physical characteristics is one
of the principal determinants of a country's customs, products,
industries, needs, and methods of satisfying those needs.

-From doing the observation on IKEA up to -Explain this, The CEO of IKEA China Ms. Zhu
date strategy map, the researcher finds give out three main reasons. Firstly, the
that IKEA retail stores are mainly permanent resident population in the western
distributed in the east part of China and area is Chinese national minority. Compared
several of them are also located in the with the Chinese traditional Han nationality, the
middle part of China. And most of the national minority in the western part of China
stores are concentrated distributed in the seems to be more difficult to accept the foreign
Chinese eastern coastal areas. However, culture. Secondly would be the consideration of
also viewed from the strategy map, that transportation. There are many foundries of
the western part of China with a relatively IKEA in China and all of them are located in the
lower geographical distance to Sweden is eastern coastal part of China, the closer
a total market vacancy of IKEA. Through distance between the retail store and foundries
the observation, the researcher didn’t find could reduce the cost of transportation. As well
any IKEA retail stores in the west part of as some of the productions that are not made
China. However, on the contrary, the in China would be transported through marine
eastern part of China with a relatively transportation, and the port and dock are also
higher geographical distance to Sweden all located in the eastern part of China. The last
was distributed a majority of 21 IKEA retail but not least, the CEO Ms. Zhu explained the
stores in China. reason for economic development and
population distribution. There are great east-
west differences in the regional economic
development of China, and the western area
obviously falls behind the national average
level. The population of China is mainly
distributed in the eastern part of China, and the
western region of China really lacks purchasing
power.
 INTERNATIONAL MARKETING

Structure of
Distribution

Chinese people have a habit of not buying self-assembled furniture. Furniture company IKEA is
a company that sells do-it-yourself furniture that will make it difficult for the company to enter
the Chinese market. before opening the store in the Chinese market, they sent staff to people's
homes to talk to them, the staff went to the kitchen and talked to the owner to find out what
the Chinese people didn't like and what they didn't like. What they want and how much they
will spend on the product they need. In the Chinese market, IKEA always has to comply with the
"cheap purchase" needs of the gods. In the Chinese market, IKEA supports home delivery,
assembly, and processing services, or right at the IKEA store, the staff is always willing to pick
up the goods and push the goods to the checkout area for customers. IKEA had to adjust its
store location strategy as most consumers in China use public transportation. Rather than the
usual stores in the suburbs, IKEA sets up its stores on the outskirts of cities which are
connected by rail or metro networks. IKEA in China has made all the necessary adjustments to
certify that there were minimal obstacles in its growth ambitions and brand promise. IKEA has
demonstrated courage, adaptation, and awareness to shift its production, work with local
sources, overcome legal requirements, and adapt brand proposition to suit the level of
development of the market and consumer perception. With that, to grow globally requires
sacrifices and innovation from global teams, listening to the local team, and learning with an
open mind. As mentioned as an example above, IKEA entered the Chinese market by learning
from its mistakes and continuously adapting to the changing environment. Not many
companies have the ability to go through trial and error because it is very costly when mistakes
are made. Moreover, IKEA China’s market strategy embodies either standardization or
localization, and often, both
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MARKETING

Level of Technology
KEA in China realizes that digital marketing is the way to go, with
the IKEA Group using internet-powered digital technologies such
as Chinese social media and micro-blogs for the campaign. their
marketing for market appeal and brand recognition. In 2016, IKEA
China officially launched its online shopping service in Shanghai.
Two years later, the service has expanded to 149 cities in China. In
2018, IKEA made an official announcement that their official
website is the only online sales channel in China. Currently, online
sales account for about a tenth of IKEA's total retail sales. In March
2020, Inter IKEA Systems, IKEA Retail China, and Tmall had online
signing ceremonies in Shanghai and Hangzhou, to expand IKEA
products to a wide range of customers.
 INTERNATIONAL MARKETING

Economic Forces

IKEA opened 15 new stores in 2008 and in august

2009 had 267 stores, which welcomed a total of 590
million visitors during the year. A further 34 stores are
owned and run by franchisees outside the IKEA group.
IKEA group sales totaled 21.5 billion Euros. IKEA food
services reported sales of 1.03 billion Euros. The IKEA
group had 31 trading service offices in 26 countries,
and 28 distribution centres, and 11 customer
distribution centres in 16 countries. The shed wood
group, the IKEA industrial group had 15,000 co-
workers and 46 production units. (source: IKEA at a
glance- the financial year 2009)
The growing GDP with annual growth of6.6% in
2018and government macro-control are stimulating
the growth of national consumption. It is widely
believed that China has big potential for consumption
in the future.
Chinese individual consumption occupies only
39%while the percentages are 67% and 60% for the
US and the UK respectively in 2017. In the „thirteenth
five-year plan‟, China regards expanding domestic
demand as a major task. Furniture retailing is an
important aspect of consumption will also increase as
other retailers.

There are 3 reasons that make the concept of IKEA change:

A ,The competitive advantage of low price is not clear and the price is always
too high for customers.
B, the challenge of high exchange rate make IKEA cannot have the same price
global.
C, IKEA seems to have the strategy of the high-grade brand positioning in
China. (Sa Wang and Licheng zhang, 2008)
 INTERNATIONAL MARKETING

Competitive Forces

China has thousands of small competitors and only a few

have a large share of the market. The Chinese market is far
from mature and most local firms still use original
equipment manufacturing (OEM) (Wei, Zou, 2007). There
are some privately-owned companies such as Qumei,
Oupai, Guangming, and Meike that developed quickly in
recent years. Most of the firms are located in Guangdong
Province, a wealthier region compare with the other places
in China.
The biggest challenge for IKEA in 2021 and beyond is the
mass migration of consumers to online platforms like
Wayfair and Amazon. Other traditional competitors like
Walmart and Target also have robust eCommerce
platforms that can poach IKEA’s customers. Unique brands
like Jysk, Kartell, and Williams-Sonoma are also IKEA’s top
competitors in 2021.
IKEA competes in the retail furniture market. It offers
customers a wide range of modern designs as well as other
products related to home improvement.

Chinese competitors copied IKEA's designs from its catalog

and then offered similar products at lower prices. It is more
important what customers think about the company
rather than the other way around. IKEA wanted to be
known as a low-price provider of durable furniture, while
Chinese consumers looked at IKEA as an aspirational
brand. It is likely that Indian consumers will also look at
IKEA in a similar way.
IKEA may face some India-specific challenges such as
varying laws in different states ruled by different political
parties. This could make its operations, especially
distribution and logistics, a bit challenging. IKEA already
has had to wait a long time to get permission to open
stores in India. The delay in policy-making at the state level
could be even longer.

Competitive rivalry within an industry

1, using the scale effect to get the low price
2, improving the public image
3, the model of chain operating
Bargaining power of customers
1, low price
2,good quality
3, good service4, high quality of design
5, wide varieties
 DEFINITION
SELF-REFERENCE
CRITERION

Self-reference criterion is a
concept especially in
international marketing, where
all marketers have some
unconscious reference towards
their own culture, religion and
values. Self-reference criterion
builds up mental constraints and
bounds in relation to marketing
efforts that will work in the
geography and that will be
accepted in the culture. This
often leads to misplaced
marketing as marketers think
their vision matches the market
and with time every person and
the vision possessed by the
individual gets outdated. Thus it
is important for marketers to
have Self-reference criteria but
not get swayed away with them.

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 SELF-REFERENCE
CRITERION OF IKEA
IN CHINA

In the first decade of the 21st century, the Chinese On the other hand, makes every effort to fit into
real estate market exploded, the homeownership each culture into which they venture. In the
rate was higher than ever, bringing a huge Chinese market, IKEA provides additional delivery,
demand for interior decoration and home assembly, and processing services at home or at
renovation the IKEA store, where personnel is always willing
Many high rollers surrounding the world quickly to take and push things to the cashier area,
jumped into the Chinese market, Home Depot has according to IKEA's CEO. These acts are not
a strategy of copying “yielding” models in the US, available in industrialized countries, yet they are
while IKEA still retains its core values but critical for Chinese clients. IKEA made its decision
continuously studies and changes for suitable for after conducting a study and adjusting to the
the local market. Both IKEA and Home Depot are market, and they have succeeded.
from the Western markets whose customers
prefer a self-service style. Therefore, the strategy
of those companies is to provide furniture that will “Most people do not know or have ever
be assembled at the customers’ houses by their imagined that IKEA employees visit
own hands. However, in Eastern culture, especially thousands of homes every year”, Mikael
in China, customers’ mindset is quite different, Ohlsson – CEO of IKEA. “We sit down on
they think that is why they have to assemble the the kitchen floor to talk to the landlord…
product for which they have paid money. That is the only way we really understand
In fact, Home Depot was painfully withdrawing the customers. They are uncomfortable,
from China after 6 years, and most experts said what they need, how much they are
that the American giants failed to understand the willing to pay, whom will they choose if
culture in this country, Chinese people did not like IKEA is not the first choice…” he added.
to assemble their own products. The reason for
that consequence is Home Depot made its
decision on the wrong SRC. Hand–made products With its flexibility, IKEA not only exists but also
are very suitable for the European and American “kicks” any international opponent who wants to
markets because their culture is so used to this. penetrate the Chinese market, not just by how
But in Asian countries, people often do not know they adapt but by the value of a brand.
everything by themselves is the reason Home
Depot failed so quickly extremely.

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INDIVIDUALISM
OR
COLLECTIVISM
INDEX

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MARKETING
 There is a similarity between IKEA's corporate
culture and Chinese culture. Both are adopted
collectivism to the characteristic. Chinese culture
stresses loyalty between people. They will do
everything for the interests of groups that they
belong to in exchange for loyalty. Guanxi is a
common term in China to indicate relationships
or connections. The same thing could be found in
IKEA's corporate culture where teamwork is
emphasized. Humbleness and willpower are used
to get things done. Togetherness is stressed in
IKEA’s values. It is believed that together they can
strive for goals. According to Johan Nestor,
individualism is not considered as the key
element since if co-workers do not look up in the
same direction, they will go the wrong way which
is not suitable for the IKEA Way. Co-workers are
expected to listen to and learn from each other.
In addition, more attention can be drawn from
IKEA's promotional films in Asian countries such
as China, Indonesia, Singapore ....., they mainly
focus on collective families from generations of
grandparents and parents, everyone turns
around. As for IKEA in the US market, it only
focuses on immediate family, not extended
family or they only focus on a single individual
and highlight the individual value of each
individual's life. That shows that the difference in
cultural values of each country is different.

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