Management of IKEA in Russia - Essay Example

IKEA stood firm among the ruins to earn reputation and trust. IKEA was not in favor of sourcing raw materials and labor from the local market. (Developing and positioning the retail proposition in Russia, IKEA in Russia, Coursework, Page 4, para 1 and, Page 6, para 1). (Reference). They recruited local people to handle marketing and sales, leaving senior positions for IKEA executives. Setting up independent sales outlets without aligning itself with native business houses didn’t help their cause either. Their aim to attract and influence customers through their well-known and trusted products at cheap prices did not pay off. Additional tariffs, labor, transportation and distribution, and unstable foreign exchange fluctuations only added to their misery (Developing and positioning the retail proposition in Russia, IKEA in Russia, Coursework, Page 5, para 4). (Reference). The 1998 revaluation of the local currency and the fall of the Russian economy came as a blessing in disguise. While most multinationals left fearing a backlash, IKEA stood firmly behind the Russian establishment. The move was seen as a show of solidarity and faith, and in the bargain gained the Russian’s trust and friendship. Russia presented a challenge that IKEA overcame with time (Developing and positioning the retail proposition in Russia, IKEA in Russia, Coursework, Page 6, para 1) (Reference). The IKEA ideology of attracting customers to their premises began to show results. The construction of a mega mall changed the attitude of the Russian consumer. The attraction to western-styled shopping and malls presented a change from the past. IKEA with its full-fledged showroom in the mall became an instant hit (Developing and positioning the retail proposition in Russia, IKEA in Russia, Coursework, Page 6, para 3).  (Reference).