Ikea

Peng Du

Dr. Michael D. Cole

Global Marketing

1. What are IKEA’s firm-specific advantages? Country specific advantages?

IKEA is a famous furniture manufacturer and retailer in the world. The firm-specific advantages as following.

First of all, IKEA’s most important company-specific advantage is its target market buyers. IKEA is the low-cost furniture manufacturer and retailer to attractive average income consumers. According to the case, “IKEA could offer quality furniture in modern Scandinavian designs at very low prices.” (page 85).

Second, assembled product is IKEA’s specific advantage. IKEA focuses on buyers in the assembling process. Especially in U.S market, people are good at the house working such as plumbing and fixing furniture.

Last, IKEA stores are located in the convenient suburban areas. According to the case, “The low-cost operation relies on buyers with automobiles to carry the disassembled furniture in packaged kits and assemble the pieces at home.” (page 85).

2. What are the cultural factors that make expansion abroad in retailing difficult? What has made it possible in IKEA’s case?

The one of the cultural factors that make IKEA expansion abroad in retailing difficult is customer buying behavior. IKEA met a troubling problem when it entered the U.S. market. Ikea has met several problems because it must adapt its products and its shopping style fit for standards in the U.S. according to the case, "IKEA decided not to reconfigure its bedroom furniture to the different dimensions used in the American market. As a result, the European-style beds sold by IKEA were slightly narrower and longer than standard American beds, and customers’ existing mattresses and sheets did not fit the beds."(page 88). Consumers in the world have different culture and habits; they do not have the same preferences. Therefore, IKEA should redesign its beds because the people would not buy the European size beds in the American market. And also, IKEA should...