Why was IKEAs initial entry into the United States not as successful as its expansion across Europe?

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Why was IKEA’s initial entry into the United States not as successful as its expansion across Europe? What steps did the company take to turnaround its American business? What lessons can be learned from this?

IKEA is one of the world’s most successful global retailers. In 2007, IKEA had 300 home furnishing superstores in 35 countries and was visited by some 583 million shoppers. IKEA’s low-priced, elegantly designed merchandise, displayed in large warehouse stores, generated sales of €21.2 billion in 2008, up from €4.4 billion in 1994. Although the privately held company refuses to publish figures on profitability, its net profit margins were rumored to be approximately 10%, high for a retailer. The founder, Ingvar Kamprad, now in his 80s but still an active “advisor” to the company, is rumored to be one of the world’s richest men.

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Essentials of strategic management

ISBN: 978-1111525194

3rd Edition

Authors: Charles w. l. hill, Gareth r. Jones

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