The Market of IKEA in China - Essay Example

1.1 Product rule 45 4.1.2 Propaganda approach 46 4.2 IKEA stores have a different location principle in China 46 4.2.1 City selection 47 4.2.2 Position selection 47 4.3 IKEA tries to lower the price to fit Chinese consumption level 49 4.3.1 Build more processing factories 49 4.4 The difficulties and challenges for IKEA in China 50 4.4.1 Domestic furniture firms are the main competitors of IKEA 50 4.4.2 IKEA’s products are always imitated by others in China 52 4.4.3 IKEA joint venture with local firms at the early stage of operating in China 52 4.4.4 IKEA developed slowly in China 53 4.

5 Chinese furniture market has huge potential 54 5 Conclusion, Limitation and Recommendations 57 5.1 Conclusion 57 5.2 Limitations 58 5.21 The credibility of Chinese media resource 58 5.22 The short history of statistics collection in China 58 5.23 On demand information not available 58 5.24 Regional restriction 59 5.3 Recommendations 59 5.3.1 Appropriate investigations for the market of IKEA in other countries 59 5.3.2 Choose a similar brand as a case study, adding into this paper 59 5.3.3 Adding the research on IKEA’s development planning in China 60 References 61 Bibliography 69 Appendix I Reflection 71 Appendix II Dissertation Log 72 Appendix III Dissertation Proposal 83 Appendix IV Ethic Form 95 1 Introduction With the rapid growth and development of China, especially after 1987, the level of economy and the life quality of Chinese people increased dramatically.

When they have enough money for food and cloth, they shift their interests in other aspects, such as furnishing, to make their life more colourful. Due to the increasing needs for furniture, there are more and more furniture companies operating in China. Nowadays, there are a large number of furniture companies. IKEA is a Swedish home furnishing retailer. Since 1973, when IKEA opened its first store in Switzerland, it started its business activities in the foreign markets. Nowadays, IKEA has more than 292 stores in 37 countries although it had operations only in Asia about ten years ago.

At present, Ikea is trying to expand, to many other overseas markets. International business or cross cultural business is growing day by day after the introduction of globalization. Majority of the countries are trying to attract foreign direct investments as much as possible and hence international companies are getting immense opportunities in overseas markets. As an internationalisation strategy, IKEA has selected the neighbouring countries initially to move into. It is because these countries share a similar language, and traditional culture with Sweden.

Following that, IKEA has moved into other Non-neighbouring countries to develop more variety in its market share. It should be noted that culture plays an important role in the internationalization of business. In other words, expansion of business to countries with similar culture is easier than expansion of business to countries with different culture. IKEA aims to offer a better everyday life for a lot of people. The company’s mission is to offer a wide range of well-designed, functional home furnishing products with affordable price (Sandelands, 2009).

Earlier, Ikea products were highly expensive and hence only the elite groups in the society were the major customers of Ikea.