Ikea Way in Russia
Case Study Report
IKEA in Russia
Emily Kane - 491340
Eleanor Jones - 491338
Silvia Blanco - 490319
Luis Felipe Hernandez - 490819
4th March 2011
Executive Summary IKEA began as a small company in Sweden selling small household items but in 1945 began selling furniture. IKEA has expanded to other European countries, Canada and Australia. Currently, IKEA is the market leader in the distribution of furniture and home decorative items. IKEA entered the Russian market in 1991 but did not open its first store until 2000 in Moscow. IKEA stayed in Russia during their economic downturn gaining respect from the Russian public and government. To say competitive IKEA has tried to lower cost without losing quality in their products. They are able to do this because of a good relationship with their supply chain and customer involvement. IKEA does half of the work and have the customers do half. IKEA does not adapt their products for each market they are in. This has proven beneficial for IKEA.
IKEA has a strong brand and a unique vision. They want to transfer the IKEA culture and values into Russia. Russian stores have become a training site to teach each employee IKEA values. IKEA was able to come up with solution to the problem that Russian homes are small and often house 2 or 3 families without changing their products drastically. IKEA was able to convey to the Russian people that having a beautiful home does not have to cost a fortune. Within the Russian store the employee paid special attention to making sure the Russian customers feel welcome. One issue still facing IKEA is the difficulty finding local suppliers.
IKEA has several strengths that outweigh their weaknesses in the Russian market. IKEA is an established company and has invested time and money in Russia and that is seen though the opening of new stores and extensive training programs. IKEA does have a problem with finding local suppliers but that could change when
IKEA in Russia
Emily Kane - 491340
Eleanor Jones - 491338
Silvia Blanco - 490319
Luis Felipe Hernandez - 490819
4th March 2011
Executive Summary IKEA began as a small company in Sweden selling small household items but in 1945 began selling furniture. IKEA has expanded to other European countries, Canada and Australia. Currently, IKEA is the market leader in the distribution of furniture and home decorative items. IKEA entered the Russian market in 1991 but did not open its first store until 2000 in Moscow. IKEA stayed in Russia during their economic downturn gaining respect from the Russian public and government. To say competitive IKEA has tried to lower cost without losing quality in their products. They are able to do this because of a good relationship with their supply chain and customer involvement. IKEA does half of the work and have the customers do half. IKEA does not adapt their products for each market they are in. This has proven beneficial for IKEA.
IKEA has a strong brand and a unique vision. They want to transfer the IKEA culture and values into Russia. Russian stores have become a training site to teach each employee IKEA values. IKEA was able to come up with solution to the problem that Russian homes are small and often house 2 or 3 families without changing their products drastically. IKEA was able to convey to the Russian people that having a beautiful home does not have to cost a fortune. Within the Russian store the employee paid special attention to making sure the Russian customers feel welcome. One issue still facing IKEA is the difficulty finding local suppliers.
IKEA has several strengths that outweigh their weaknesses in the Russian market. IKEA is an established company and has invested time and money in Russia and that is seen though the opening of new stores and extensive training programs. IKEA does have a problem with finding local suppliers but that could change when
Bibliography: N.Ghuari, Pervez & Cateora, Philip (2010) “International Marketing” Third edition, McGraw Hill IKEA (2011) “Home” [Online] Available at: http://www.ikea.com/gb/en/ (Assessed: 23rd February 2011) WinRed.com (2011) “IKEA Brief History” [Online] Available at: http://winred.com/estrategias/caso-ikea/gmx-niv102-con1393.htm (Assessed: 23rd February 2011) Business Week (2011) “Why IKEA is Fed Up with Russia” [Online] Available at: http://www.businessweek.com/magazine/content/09_28/b4139033326721.htm (Assessed: 3rd March 2011) IN