INTERNATIONALISATION PROCESS in the specific case of IKEA

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1. EXECUTIVE SUMMARY

In this essay, we will examine the internationalisation process of IKEA, Swedish Company founded in 1943 and the world's lieder in supplying home furnishing at low price with imaginative styles and application facility. In addition, we will describe from the different frameworks that have sought explain the Internationalisation process, the factors that have taken this company to perform its international expansion. From to be a simple local shop in a small town in Sweden 60 year ago, to be an actual powerful multinational with more than 76.000 employees and shops in more than 43 countries.

2. INTRODUCTION

The internationalisation process of the firm has been a subject, which has been motive of study for a number of theorists. These ones have created different frameworks in which they are disclosure different factors that take enterprises to move out of their territories. Thus, the internationalisation process, must answer questions like, what influence a firm to become international? How does the firm do the process? and where to locate the activities?

Therefore, our aim in this essay will be show the different factors, which are influenced firms in a macro level and in the specific case of IKEA to internationalise. What kind of variables might determinate the form in how firms face the internationalisation, what aspects are relevant to choose a location to carry out the international activities.

3. INTERNATIONALISATION PROCESS - IKEA CASE

3.1 INTERNATIONALISATION FACTORS

According to Ghauri (2000) those factors, which take enterprises to initiate a internationalisation process are fundamentally directly related to the firm, the environment the firm is immersed, and the people who are running the activities in that specific firm.

Therefore, in order to connect the IKEA case with the theories, we will follow the sequence of factors to describe the driving force that take to IKEA to go international.

3.1.1 ORGANISATIONAL FACTOR

3.1.1.1 The role of the Management

After reading about IKEA, its history, its strategies, and its way to do business, one can realize that one of the most important factors in IKEA's success is its founder Ingvar Kamprad. His style and personality are impregnate in every piece of IKEA culture. As is exemplify in Ghauri (2000), the incentive of expansion can obey to a natural entrepreneurial motivation of the manager, and according to Christopher Brown from the financial times, Mr Kamprad is one of Europe's greatest post-war entrepreneurs. This innate distinctive, and his idea to supply home furnishing at low price with creative styles and flexibility of use, have taken IKEA to play an important role international.

Mr Kamprad's role in the internationalisation of IKEA, comes until our days, when in the interview to the financial times in August 2002, presented his preference to expand in countries like China and Russia, rather than continue opening shops in established markets like UK or German.

3.1.1.2 Motives of the Organisation

A number of reason take companies to go abroad in order to search for opportunities that give them the chance to expand its ownership advantage. Dunning (1993) gives a classification the MNEs according to their most important activity. These can be "Resource Seeking"; those that seek obtain a benefit from the resources in another location. "Market Seeking", which look for establish subordinates companies in specific markets in order to supply them from inside. "Efficiency Seeking", which look for allocate branches to produce a specialize parts within a wider level of production and "Strategic asset Seeking", which incur in FDI, acquiring strategic companies to able them to prolong their existence.

We can observe that IKEA, can be classified in those market categorization. IKEA, at its first stage was a "resource seeking" and "efficiency seeking". This can view when IKEA went to Poland and established a source...
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