Ikea Case Study

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IKEA-Case Study
March 15, 2010

1. How has the globalization of markets benefited IKEA? IKEA has benefited from the globalization of markets, because it has successfully merged national markets. IKEA has globally grown into a brand with 230 stores in 33 countries that have generated sales of $17.7 billion. IKEA has taken the idea of offering attractive home furnishing at low prices globally. 2. How has the globalization of production benefited IKEA? IKEA has benefited from the globalization of production by sourcing of goods and services from locations around the world. IKEA has open large warehouses that offer 8,000 to 10,000 items. IKEA also has a network of 1,300 suppliers in 53 countries. IKEA has suppliers in each of its big markets to avoid the cost that are associated with shipping the products over the world. IKEA has five suppliers in Europe, and three in the United States and two in China. IKEA is also reducing the cost of cotton slipcovers, and IKEA has production in four core suppliers in China and Europe. Globally sourcing has allowed IKEA to reduce the price of the company’s bestselling love seat the Kiplan by 40 percent. 3. What does the IKEA story teach you about the limits of treating an entire world as a single integrated global marketplace? This story has taught me that you can offer the same idea of having attractive furniture at low prices, but you have to adapt to each countries taste and preferences of consumers in different nations.
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