International Business Case Study

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The first question: how has the globalization of market benefited IKEA? The globalization of market refers to the merging of historically distinct and separate national markets into one huge global marketplace. Falling barriers to cross-border trade have more easier to sell internationally, so it is easier for IKEA to grow into a global cult brand with 230 stores in 33countries and have 5 suppliers of the frames in Europe, plus 3 in the United States and two in China. Because a fewer barriers to cross-border trade. IKEA can easily to open a store in other countries.

 the second question: how has the globalization of production benefited IKEA? The globalization of production refers to sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of productions, IKEA did a good job, in order to reduce the cost of cotton slipcovers, IKEA has concentrated production in four core suppliers in China. The resulting efficiencies from these global sourcing decisions enabled IKEA to reduce the price of the Klippen by some 40 present between 1995 and2005, because in China we have cheaper labour and lower price of source, it will reduce the cost of  production in IKEA, thereby allow IKEA to compete more effectively.

What does the IKEA story teach you about the limits of treating the entire world as single integrated global marketplace? In my opinion, every country is unique and has different cultures. If the strategies to provide low price of product offer a company must identify what and which factor that can bring the lowest cost in term of labour, transportation, materials and so on. IKEA first discovered in the early1990s. The company found that its European-style offerings. However, it didn’t always resonatewith American consumers. Because of this reason, IKEA has redesigned its US offerings appeal to American consumers, which has resulted in stronger sales. It is obvious that tastes...
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