Ikea

IKEA’s success in Europe.

During the 60’s, IKEA was blooming in its own country and they expand into Switzerland where it is similar to the Swedish culture but the problem with expanding into another country was to acquire new suppliers. Once that was established, the culture of IKEA’s consumer – assembled furniture could be used again. Looking at the success of IKEA in Switzerland, they decided to move into Germany, where it is a much bigger country and also culturally close to IKEA’s roots. IKEA’s subsidiary German company (IKEA GmbH) became very successful using its German culture. Soon after, IKEA (GmbH) became very successful and they were voted German marketer of the year in 1979.

Failure in USA and Japan.

Moving into USA would prove to be a very tough time for the organisation because they have adapted the wrong tactic when entering this market as IKEA only entered a market after extensive research. The team at IKEA suggested that the main problem when entering the US market was the creation of a stable supply chain, where they took an incremental approach, starting with a few stores and gradually increasing. Other problems which IKEA had were the failure to adapt to the American culture, where it is much more different than Europe. IKEA did not reconfigure its bedroom furniture to suite a different dimension used in America, as beds in Europe had a different length. IKEA imported more than half of its furniture from Europe and it was very costly.

IKEA’s failure in Japan occurred in the 70’s. IKEA went through a very rough period and eventually they pulled out of Japan in 1986 (Lane, 2007). The problems which IKEA encountered during their time in Japan was the fact that the store was too small and only a handful of customers are willing to assemble the furniture themselves let alone put it in their car. During that period IKEA faced competitors, where they had operated more than hundreds of shops. Like IKEA the competitors capture the demand for...