Please answer question 11-10 in point form and explain the answer. Please make the answer short .

Practicing International Management Case IKEA's Global Strategy I KEA (www.ikea.com) is a nearly $30 billion global furniture Some U.S. customers, however, are inked to find popular items sometimes out of stock. Another problem is the long lines result countries, the company's success reflects founder Ingvar Kamprad's ing from the company's no frills approach. Although all customers "social ambition" of selling a wide range of stylish, functional home appreciate receiving quality products at a fair price, some of them furnishings at prices so low that the majority of people can afford question whether drawbacks of the IKEA concept are worth the to buy them. The story of Kamprad's success is detailed in a book savings titled IKEA: The Entrepreneur, the Business Concept, the Culture Goran Carstedt, president of IKEA North America, responds The store exteriors are painted with Sweden's national colors, bright to such criticism by referring to the company's mission. He notes blue and yellow. Shoppers view furniture in scores of realistic set that IKEA's ability to keep prices low tests on the strategy of pro- tings arranged throughout the cavernous showrooms. viding limited services. Customers return to IKEA despite having In a departure from standard industry practice, IKEA's furniture to make some small sacrifices because they value the company's bears names such as "Ivar" and "Sten" as well as model numbers. At low prices, he says. "To keep them coming back, IKEA is spending IKEA, shopping is very much a self-service activity-after brows- millions on advertising to get its message across. Whereas com ing and writing down the names of desired items in the showroom, mon industry practice is to rely heavily on newspaper and radio shoppers pick their furniture off shelves, where they find boxes con- advertising, two-thirds of IKEA's North American advertising taining the furniture in kit form. One of the comerstones of IKEA's budget is allocated for TV. strategy is having customers take their purchases home and assem- Incredibly, IKEA has also expanded into apartment building. ble the furniture themselves. The typical IKEA store also contains a The retail giant has more than 3.500 of its prefab homes through Swedish-cuisine restaurant, a grocery store called the Swede Shop, out Sweden, Norway, Finland, and the United Kingdom. IKEA's a supervised play area for children, and a baby-care room. BoKlok (meaning "smart living in Swedish) apartments resemble IKEA's approach to the furniture business enables it to rack IKEA's modern furniture. The apartments are designed with open up impressive growth in an industry in which overall sales are flat. plan living spaces with high ceilings, windows on three sides, and, Sourcing fumiture from more than 1,500 suppliers in 50 coun of course, pre-fitted IKEA kitchens tries helps the company maintain its low-cost position. IKEA has also opened stores in emerging markets, such as in Central and Thinking Globally Eastern Europe. Because many consumers in those regions have 11-9. When company founder Kamprad decided to expand into relatively low purchasing power, the stores offer a smaller selec- China, he based his decision on his own intuition, not on tion of goods, and some of the fumiture is designed specifically market research. Looking at IKEA's current performance for the cramped living styles typical informer Soviet bloc coun in China, did Kamprad's decision pay off! tries. Throughout Europe, IKEA benefits from the perception that 11-10. Relying on topics covered in this chapter, would you elas Sweden is the source of high-quality products. In fact, one of the sity IKEA's approach as one of standardization or adapta company's key selling points is its "Swedishness." IKEA also op. tion in markets around the world? Explain. erates in emerging markets like Russia, where its core strategy and anticorruption policies have been effective Industry observers predict that the United States will eventu Source: Jennifer Karmon, "IKEA Fust Cultural Collaboration Is A Sharp ally he IKEA's largest market. The company opened its first U.S. Tu To The East Sweden Meets China. Yahoo webite chup/home store in Philadelphia in 1985 and today has dozens of outlets that yahoo.com blogu spaces) January 21, 2014 The Corruption Eruption. The generate billions of dollars in sales annually. IKEA's competitors Est, May 1, 2010, p. 73. Dianna Dilworth. "Ikea Enters UK Housing Market, Blonry Busineswerk (www.businessweek.com. April 20.2007 Take the company very seriously and say any industry player that Kerry Capell. Ikea's New Plan for Japan, Blower Bow ignores the future Walmart of home furnishings (as IKEA is some businessweek.com). April 26, 2006. lea website www.ikea.com elected times called), does so at its own peril