Ikea Enntering the Russian Market

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The best way to search for viable alternative entry strategies is to watch the mistakes IKEA made and the problems they had by entering the Russian market. But first there are several company related attributes to mention. IKEA is a company which is highly related to their Swedish tradition and origin as this is a basically part of their marketing strategy and corporate identity. Many people are connecting IKEA’s Swedish image with the way IKEA is communicating their product range: Cheap, easy and yet reliable and stylish. Because of these conditions given, IKEA is forced to make sure that they are able to transfer these elements of their corporate idea into the Russian market. Of course there always are slightly differences from country to country in the way IKEA communicates to their customers, but adoptions should be limited to executive marketing decisions and not interfere with IKEA’s basic business idea. These previous points are strongly limiting any kind of indirect entry strategy. IKEA needs to keep the conceptional differences between their home markets and the Russian points of sale as small as possible. That means as further the gap is between the original shops and the ones in Russia, the bigger is the chance of a flawed identity. Therefore entry strategies like franchising, licensing and indirect export over all could not be an opportunity to enter the Russian market. The reason is simple: It will get quite hard to find a Russian businessman who is familiar enough with Swedish culture. The franchise guidelines IKEA would be forced to give out would probably fill up thousands of pages and even then, Russian IKEA franchise businesses would communicate anything else but Swedish family piece to their customers. IKEA remains facing the more viable entry strategies of a direct export in terms of opening their own stores in Russia as they did, or to start an alliance as a strategically partnership or joint venture. The major problem they IKEA faced by...
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