IKEA INTERNATIONAL EXPANSION

Cross-Border Trading and the International Expansion of IKEA

Executive Summary

IKEA is a multinational corporation that has Dutch origin. IDEA is one of the most leading retail stores across the world in terms of furniture and household items. This organization is well known for the distinct advantages that it provides to its customers. IKEA used effective pricing strategy and achieved the low cost leadership in the market by providing the contemporary designed brands at lower price. The organizational structure of IKEA is opaque and confusing. The brand known as IKEA belongs to a foundation based in the Netherlands that is under the control of the Kamprad family. IKEA was considered as one of the leading furniture manufacturing retail corporations in 2007; according to a research study it can be enlightened that IKEA has 238 stores in 34 countries and it employees 104,000. IKEA with in a short span of time achieved tremendous success and achieved the goals and objectives mentioned in its mission. The contemporary product design feature is the competitive advantage of the company because of this distinct feature it is regarded as the most prestigious and innovative organization. The product line of IKEA is intended to cover all household needs and different ages. The organization adapts diversified strategies on the basis of the category on their target market. IKEA's target market is not limited to a particular age segment or class. Nevertheless, the huge part of IKEA's target market belongs to the lower and middle class as it can be reflected from the pricing strategy adapted by the organization. IKEA adapts effective management practices and designs innovative strategies to win the hearts of its customers. This is the reason because of which IKEA is one of the well known and valuable brands of the world.

Cross-Border Trading and the International Expansion of IKEA

Introduction

The founder of IKEA, Ingvar Kamprad, has bothered to create a corporate structure and organization forward-looking and independent. Inter IKEA Systems BV owns the IKEA concept and brand and franchise agreements with every IKEA store in different countries of the world, most of which is part of the IKEA Group (Samuelson 2001, 1204). While the universal approach proved to be successful in Europe, it was a different story for the US. In order for it to succeed, it had to adapt to the taste and preferences of the US market. While their approach is still to market the streamlined and contemporary Scandinavian style, it had to keep in mind the preference of its local market in terms of product lines and features.

This experience has caused IKEA to remix its formula elsewhere as well. This means that IKEA does not simply buys what is available from suppliers and that simply does not draw a product that must then be "produced by someone”. All IKEA products are developed and designed according to production, logistics, storage and trade "Integration". The organization consists of IKEA in the world through what we call, for obvious simplification of a complex, three basic types ...