CASE 16-2 IKEA
Global companies plan activities on a global basis and are well known in various countries. They operating in more than one country benefits from savings or economies on activities such as R&D, marketing, operations and finance are achieved which may not be available to domestic companies but the key positions are maintain in headquarter such as finance, R&D and marketing, they produce the technologies or brand at the headquarter and disseminate it to their subsidiaries. They prepared globally competitive product but ignore specific local demand for the minors. From the case study it shows that they have presence in more in 38 countries, they source furniture from a network of more than 1600 suppliers in 55 countries. The store exteriors are painted bright blue and yellow: Sweden’s national colors, all the above point out the features of a global company On the other hand transnational companies is one that operates substantial facilities, does business in more than one country and does not consider any particular country its national home. They have the description to adapt product and prices to local needs. So in summary, one of the major advantages of a transnational company is that they are able to maintain a greater degree of responsiveness to the local markets where they maintain facilities. For example it is mentioned in the case that in Japan IKEA will offer home delivery and an assembly service option. Also when they enter Eastern Europe they designed their product specifically for the cramped living styles typical in former soviet bloc countries. These facts show it a transitional company Finally it shows that it has the attribute of both global company and transitional company
From us to categorise IKEA has been cost focus one need to understand Porter Competitive advantage theory which explain that Competitive advantage occurs when an organization acquires or develops an attribute or combination of...
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