A Case Study of Ikea

Topics: China, IKEA, Culture of China Pages: 9 (3327 words) Published: March 12, 2011
A case study of IKEA


The past century saw rapid growth of multinational companies around the globe. Along with the tide of globalization, china is under the influence of effects of globalization. China boosting a remarkable economic growth in the past two decades, stands out under the spotlight of international business. Being amazed by the huge business potential posed by a population of 1.3 billion, many multinational companies have joined the competition to attract Chinese customers. There have been losers and winners. IKEA is now on the right track.

IKEA entered the Chinese market in 1998 by first opening a shop in Shanghai, the financial centre of the country and are now ready to expand further. The thesis presenting a case study of IKEA Shanghai’s marketing performances is to better illustrate the effects of globalization. Following the model of the marketing mix (the 4Ps). The findings convey an important message in terms of international marketing—the company must think globally and act locally in hope of building long-term customer relationships and capturing customer value. On the other hand. Globalization brings good and bad influence on china ,which we can see from the case of IKEA..

Key words: IKEA , effects, globalization, products, price

1. introduction 2-5 2. case of IKEA
1. product 5-6 2. price 6-7 3. place 7-8 4. promotion 8-9 3.conclusion 9-10 4 Bibliography 10-11

1. Introduction

China’s reform and opening-up policy since 1978 has brought profound changes of the country’s economic landscape. Boasting an average Gross Domestic Product (GDP) growth rate of 9.4% per year in the past 26 years, China’s annual per capital GDP growth rate has still reached 8.1% even with a large population of 1.3 billion (China Development Research Foundation and UNDP 2005). In addition, after 15 years of negotiations, China’s entry into the World Trade Organization (WTO) was officially approved on 11thNovember 2001. China has committed to further integrate into the world’s multilateral trading system by opening up its wide market. Hence, multinational corporations suddenly found themselves standing at the doorstep to a new arena—the Chinese market. Due to globalization, some Western companies tended to assume Asian consumers have similar tastes and preferences, but reality might have shown a different picture. The world might have become a “global village” but the impacts of various languages and cultures should always be taken into consideration, especially when multinational companies design their marketing strategies for different markets.

It is obvious that china is deeply influencing by globalization. From big level, Globalization will contribute to the development of international trade and our country’s Prosperity. On a personal level, we can benefit from globalization for getting products from abroad more easily. We have more choice when making a purchase decision. We can better understand the effects of globalization from studying the case of IKEA Originating from a small village in the south of Sweden in 1943, IKEA has grown into the biggest furniture retailer with 253 stores in 37 countries and territories around world. The company’s attempts in the Chinese market started from Shanghai in 1998, when its first store in Mainland China was opened. During the next 9 years, IKEA took its time, getting to know the Chinese customers. A series of prudent experiments have been proven effective. IKEA’s sales in China increased 500% from 2000 to 2005. At the same time, price has also been paid for a lesson on how to balance...
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