IKEA

Globalisation and IKEA

Globalisation and IKEA

Introduction

Globalisation is something that in recent years become an increasingly recognized concept among us. Globalisation affects us both individuals and businesses worldwide. In a fastly changing competitive marketplace, a business should be a mighty competitor to survive (Hoffman 2000 121). A business should own a mighty scheme in alignment to become a mighty competitor. To examine the real impact of globalisation of on international business practices, this paper explores how the Swedish giant IKEA fits in as an international company. This paper explores the IKEA's current strategic issues and challenges in a a fastly changing and globalising business scenario. A brief account of the company is provided through the organisation's history and business focus. Further, the paper provides geographies, regionalization, localization, productions, marketing, financial and environmental considerations of the company as it globalises itself. Finally, the paper concludes with the options the company may consider in dealing with its strategic issues and challenges.

Company Profile

The Swedish furnishings monster 'IKEA' was founded in 1943. It is the world's biggest furnishings retailer that deals with stylish but cheap Scandinavian conceived furniture. It has outlets in 35 nations. According to Cameron (2010), IKEA is possibly one of the World's most thriving multinational retailing companies functioning as a international association founded on its exclusive notion that the furnishings is traded in bang down pattern tahat are to be gathered by the clientele at home (Cameron, 2010, pp. 56). IKEA is considered today, no doubt, as a icon of contemporary design, the most prestigious, innovative and world's leading market furniture and household company (Torekull & Kamprad 1999 213). This industrial giant was created in Sweden in 1943 as a small business offering items such as pens, picture frames, watches and jewelry among others, by Ingvar Kamprad. In 1948, Kamprad decided to sell furniture produced by local manufacturers (Cameron, 2010, pp. 56).

Geographies of Economies

IKEA's business spans around a wide array of world economies. A customer-coverage that spans across 38 countries is one of the facts that bring great pride to IKEA. The company has over 300 stores operating at different international locations, with the original store being in Sweden. About 280 of these stores are owned by IKEA itself, while the rest are run by independent franchisees. Germany offers the biggest market to IKEA where alone the company has over 40 stores. USA offers the second highest demand for the company's furniture ware amongst the other international markets in Europe, America, Australia and Asia (Armitstead 2010, pp.5).The market that offers IKEA the greatest market share is Germany, followed by USA and France. In UK, the company currently enjoys an estimated market share of 6.1%, with a reported likes-for-likes sales increase by 1%. Some of the other strong markets for IKEA include Sweden, Australia, China, Italy and Canada.

Regionalisation and Localisation

IKEA had notable regionaization and localisation expereriences in Germany, France, and the United States. While IKEA's culture has been a potent factor in its competitive advantage, its expansion into overseas ...