The Relevance of Entry Strategy in China: A Case Study of IKEA and Coca-Cola - Essay Example

Comments (1) Cite this document
Aims & Objectives 5
Research Questions 5
Mode of Entry 7
Ownership & Control 12
Conclusion of the Literature Review in Entry Strategy 15
IKEA in China 16
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER91.7% of users find it useful
The Relevance of Entry Strategy in China: A Case Study of IKEA and Coca-Cola
Read TextPreview

Extract of sample "The Relevance of Entry Strategy in China: A Case Study of IKEA and Coca-Cola"

Download file to see previous pages Coca-Cola goes back to China 18
Coca-Cola 28
The Franchise Mode of Entry (1979-84) 30
The Joint Venture (1985-1992) 32
Hybrid Mode of Entry (1993-Present) 34
Recommendations 38
China’s vast market potential makes it attractive to foreign direct investors. However, there are many barriers and challenges that a multinational company is likely to encounter. An entry strategy is deemed necessary to overcome these barriers and challenges and to come out successful in its foray into the Chinese market. This paper will present two case studies of companies that have successfully entered China: Coca-Cola and IKEA. Empirical studies as well as other secondary data from various sources including textbooks, journals, news articles, and websites contributed to this research. Both these companies are top producers and marketers of their products, in China and as well as the rest of the world. Their entry into China was not without enormous challenges, specifically for Coca-Cola who has a long history of investment in China. Analyzing their entry strategies provides a deeper insight into how a multinational company can utilise appropriate entry strategies to expand its global operations, even in a country that poses many difficulties.
therefore decided to open its doors to trade liberalization and to invite Foreign Direct Investments (FDI) to boost its international trade and commerce, in order to improve its economy. Globalization offered China a welcome opportunity to open up its economy to free market operation. The objective was threefold; first to invite FDI into China with a motive to expand its manufacturing capability and provide employment opportunities for its vast and growing population; second to enable its industries to upgrade with new technologies and to regain economic balance; and lastly to again become an economic power in the world as it had been historically. IKEA and Coca-Cola are two of the multinational companies (MNCs) that went into business in China after it opened its economy to foreign corporations. The two took distinct tracks and had differing learning experiences. Coca-Cola bears more colours in its entry mode being the first one to establish an inroad into the vast Chinese market. The Coca-Cola affair is rich with data that can provide good learning on how China shifted from communist market control to that of a socialist-market economy. It shows the intricacies that Coke underwent and reveals how it was able to surmount the odds. IKEA came in later when restrictions had been eased and China has already taken initial lessons on how to handle foreign corporations. The more favourable environment coupled with IKEA’s dynamic entry approach provided for a smoother inroad than was experienced by Coca-Cola. Nevertheless, the experience of both MNCs provides a comparison and contrast to equate in a critical analysis of how foreign corporations got back into the Chinese economy. The stories are as interesting as they are entertaining. Aims & Objectives This paper aims to ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“The Relevance of Entry Strategy in China: A Case Study of IKEA and Essay”, n.d.)
Retrieved de
(The Relevance of Entry Strategy in China: A Case Study of IKEA and Essay)
“The Relevance of Entry Strategy in China: A Case Study of IKEA and Essay”, n.d.
  • Cited: 0 times
Comments (1)
Click to create a comment or rate a document
linwood53 added comment 1 year ago
Student rated this paper as
Great work done on the %topic%. I think it is the best document I have seen so far.

CHECK THESE SAMPLES OF The Relevance of Entry Strategy in China: A Case Study of IKEA and Coca-Cola

Business strategy IKEA group

...programs (Rosenhauer, 2008). This ensures better cooperation with the suppliers who strive to give quality products at a very low price. Relevant and timely training can provide the valuable guidance that can help suppliers produce the right product for the customers. (iii) The global furniture giant is characterized by lesser hierarchical structure and absence of bureaucracy. This helps the company to have centralized control over key functional activities. The Chairman of the company believes that strategic decisions of an organization should be reached in a simple manner (Rosenhauer, 2008). IKEA also delegates important strategy decisions to their store managers (Nesbitt, 2004)....
8 Pages(2000 words)Case Study

Market Analysis for Entry Strategy

...Situational analysis 5 2.1 PESTLE analysis 5 2.2 Market Analysis 7 2.3 industry analysis 7 2.4 Competitor analysis 8 2.6 Implications of situational analysis 8 3.0 SWOT analysis 8 3.1 Opportunities and threats 9 3.2 Strengths and weaknesses 9 4.0 Objectives 10 4.1 Mission Statement of the company 10 4.2 Generic business strategy 11 5.0 Marketing strategies 11 5.1 Market selected 11 5.2 Market entry mode 11 5.2.1 Direct Exporting 12 5.2.2 Indirect Exporting 12 5.2.3 Joint Ventures 13 5.2.4 Licensing 13 5.2.5 Franchising 14 5.2.6 Strategic Alliance 14 6.0 Marketing mix 15 6.1 product 15 6.2 Price 15 6.3 Distribution 15 6.4 Promotion 16 7.0 Implementation and control 16 7.1 Action plan for...
16 Pages(4000 words)Case Study

IKEA Consumer and Organisational Behaviour

...IKEA Consumer and Organisational Behaviour Consumers’ Level of Involvement and IKEA’s Marketing Plan The perceived level of risk of consumers is high when it comes to buy furnishing products therefore, consumer involvement level is high. Perceived Risk It has affected IKEA’s marketing plan in the following way. Post Purchase Evaluation at IKEA and its Impact on Marketing Plan IKEA is offering its products worldwide however; company has been offering its standardised products until it accessed US market. When the sales of IKEA declined after entering into US market, company had to conduct a research based on which it found that consumers in US did not like European furniture styles and dimensions. Based on consumer feedback, IKEA... ...
1 Pages(250 words)Case Study

Advertising and Sales Promotion of IKEA

...Integrated Marketing Communications Advertising and Sales Promotion of IKEA Type of Appeal IKEA is known for changing the concept of furniture and linking it with emotions and lifestyle. In consideration to this, an emotional appeal will be used to attract the potential customers. For example, in the advertisement of kids’ furniture, a story related to a kid can be built. In this way, people can associate themselves with the characters of ads which may develop strong emotional appeal. Moreover, instead of taking celebrities for emotional appeal, normal consumers will be given chance to convey the message as it will enhance the impact of emotional appeal Development of Ads Through an integrated marketing communication approach... , a...
1 Pages(250 words)Case Study

Supply Chain Management

...Distribution, Logistics and Retailing Can your company successfully use both retail store distribution and distribution through its traditional direct-selling approach? Justify your answer. IKEA is a huge global company and company sells its products through its retail store distribution network. More than 10,000 products of the company are being manufactured by 1600 suppliers and transported to 186 stores of IKEA around the world and stored in 27 central warehouses of the company (IKEA, 2003). Therefore, the size of company, range of its products and its supply chain strategies make retail store distribution most appropriate for IKEA. Moreover, with this huge product range and global distribution network, direct selling approach... is not...
1 Pages(250 words)Assignment


...Where IKEA stands today and why? Introduction IKEA has now become one of the leading affordable solution providers of stylish home furnishings and furnitures across Europe, North America, Middle East, Asia Pacific, and Caribbean (IKEA). This is due to its consistent ability to serve its target market segment with its available product or service offerings by using targeting strategy and effective market segmentation. Dynamic targeting strategy and effective market segmentation As mentioned in the case, IKEA’s customers are frugal or cost-conscious who would want to have more additional value for their money by choosing stylish home...
1 Pages(250 words)Case Study

Ikea Case Summary

..., eating restaurants and in-store child care houses. Whereas, bulky products sold by the company are delivered at doorstep of the consumers. If the consumers opt for self-delivery, then IKEA pays back the delivery charges of carracks to the buyers (Hertz and Hultman, 2008). This proves that IKEA owns unique product, pricing, promotional and distributions strategies for conducting its trade efficiently. The biggest supplier of IKEA is from Sweden, but as the current scope of business internationalization of the firm is enhancing, it appears to procure raw materials from suppliers of Germany, Italy and China. IKEA maintains good trading...
12 Pages(3000 words)Case Study

The Entry Strategy of Motorola in China

...strategy: investment/technology transfer, management localisation, local sourcing, and joint ventures/co-operative projects. However, Motorola’s future in China is currently being questioned due to growing competition from both foreign and local firms. This paper thus examines the strategic and environmental factors that motivated Motorola to enter China; the effectiveness of Motorola’s entry strategy in achieving its corporate strategy in China; and the appropriateness of Motorola’s staffing approach for senior management in China in relation to their strategic objectives. I. Using suitable...
9 Pages(2250 words)Case Study

The IKEA Marketing Strategy

...with the company leads to business success. Corporate giants such as IKEA, Megabus and Cirque du Soleil are market leaders in their own fields and have successfully expanded the business by taking their products to newer sectors and newer geographic locations. They have also been successful by offering new range of products and services to their existent clientele. Companies such as these often use business strategies for moving into adjacent markets. Market expansion is one of the key growth elements of business strategy, which helps the business to generate excess returns, improve retention of employees and ensure their objectives are met. Paul Fifield (2007, p. 217) quotes ‘Typically...
25 Pages(6250 words)Case Study

Internationalization Strategy at IKEA

...Internationalization Strategy at IKEA Introduction The world understands IKEA as a company that offers products at low prices that include among others innovatively designed furniture. This case study evaluates how IKEA adapted its international strategies to penetrate the global market in the process becoming profitable in China, United Kingdom, the United States, and Sweden. The discourse further covers lessons learnt from one market by the company and corrective measures in another part of its market. IKEA is a Swedish giant furniture company founded by Ingvar Kamprad during the early forties. Kamprad started his...
8 Pages(2000 words)Case Study
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic The Relevance of Entry Strategy in China: A Case Study of IKEA and Coca-Cola for FREE!

Contact Us