case study ikea Essay

2158 Words Dec 17th, 2013 9 Pages
Can you see any alternative entry strategy that IKEA could have applied when entering the Russian market? What would have been the advantages and the disadvantages of these alternative strategies ?

For IKEA there was alternatives strategy for entry the Russian market, as any other foreign market, the options for the company where:
• Exporting
• Licensing
• Joint ventures
IKEA can use any of these alternatives but there were not in the same line has the company wanted to be in Russia, so they didn´t use it and stay with the direct investment.
If the company used this strategies the advantages and disadvantages would be:

• Exporting
Advantages:
-Cheapest way to enter
- the company do not have to know a lot about the new
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IKEA’s values and practices weren’t also typical for Russian market before. Thus, IKEA had to put much emphasis on the training at both overall management and store level.
On the other hand, IKEA didn’t take into account the inequality in purchasing power in Russia, typical for an emerging market. Because of that, IKEA didn’t have profit for the first few years in Russia, as its offering were still too expensive for the lowest class, and not luxurious enough for the rich.
IKEA faced difficulties in Russia, also because of bureaucracy and corruption. They waited for a permit to establish one of their stores for about a year, because of their strict policies concerning bribery.

4) IKEA has a vision of building up a global brand. Can IKEA be regarded as a global brand? How does IKEA’s marketing strategy in Russia influence/contribute to the company’s brand vision?

It is clearly visible that IKEA is a global brand, by sheer figures alone. They operate in 40 countries, have 334 stores and employ over 130000 people all over the world. The only continent where IKEA is not present is Africa. What’s more, IKEA is widely recognized by customers and they still continue to open new stores.
The business idea of IKEA is formulated as follows: “We shall offer a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.” IKEA’s marketing strategy in Russia is fully in

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