COMPANY BACKGROUND
EUROPEAN EXPANSION
CANADIAN ENTRY
ENTRY HURDLES IN THE U.S.
PROMOTION
100
What is the year in which IKEA was founded?
1943
100
What country did IKEA first expand into?
Switzerland
100
What famous IKEA symbol did Canadians respond well to?
The Moose
100
What is one adaptation IDEA had to take when entering the United States?
-new cash registers -new bed dimensions -altered store layout -more generous return policy -next-day delivery -....
100
What store symbol was successful in Germany and Canada, but not so successful in the United States?
The Moose
200
What is the name of IKEA's founder?
Ingvar Kamprad
200
What is the second country in which IKEA expanded into?
Germany
200
The advertising campaign in Canada was centered around what slogan?
IKEA: the impossible furniture store from Sweden
200
Why did IKEA send employees to suppliers' plants?
To learn technical tips about more effecient methods and helping the suppliers shop around for better-quality or lower-price materials
200
What slogan did IKEA turn to attract the U.S. market?
It’s a big country. Someone’s got to furnish it
300
What allows for IKEA to have low costs?
Disassembled Furniture
300
Why was the use of the Swedish flag and blue-yellow colors by IKEA criticized in Germany?
The IKEA subsidiary was an incorporated German company (IKEA GmbH)
300
What was the purpose of entering Canada prior to the United States?
The Canadian market was close to the U.S. market, and creating the supply network for Canada would lay the foundation for what was needed for the much larger U.S. market
300
What made IKEA's failure in entering the U.S market during 80's?
The company was unwilling to voilate the spirit of its product design in exchange of American style.
300
What is unique about IKEA's TV slots?
Commercials featured people at different transitional stages in their lives, when they were most likely to be in the market for furniture
400
What is the leading country in sales for IKEA?
Germany, with 20%
400
What was considered wrong about IKEA's entering Germany in 1974?
In German culture, birthdays should be celebrated only every 25 years
400
What served as the main issue in managing Canadian stores?
The unusually great independence and authority of each individual employee in the IKEA system (not enough specific guidance and direction)
400
What is one of the standard rules of international retailing in which IKEA broke when entering the United States?
-Enter market only after exhaustive study -Cater to local tastes as much as possible -Tap into local expertise through acquisitions, joint ventures, or franchising
400
What is a disadvantage of IKEA store locations?
-Huge size of stores -Need to keep large inventory so customers can get purchased furniture immediately -Amount of land needed for parking
500
What are IKEA's firm-specific advantages? Country-specific advantages?
Firm-Specific:  Low cost and high quality combo due to disassembled furniture  Large store sizes, large inventories, and large parking lots  Visual representation of furniture in actual room layouts  Versatility in furnishing  Unique advertising campaigns that target wide range of consumers Country-Specific:  Domestic and internationally exclusive contracting  Adaptability between countries  County-specific cultural slogans
500
What are the cultural factors that make expansion abroad in retailing difficult? What has made it possible in IKEA's case?
A  Consumers all over the world don’t have the same preferences and tastes  Management style varies between countries  Social orientation, technology, and material culture  Government rules and regulations B  Cultural specific strategy: o The use of the Swedish flag o Swedish style of the furniture  Cultural adaptation: o Specific adaptation when entering the US market  Different management style giving employees greater freedom and responsibilities
500
Describe how IKEA's expansion has reenergized mature markets around the world and changed the competitive situation.
IKEA’s acceptance internationally enlarged the entire market by its low prices. IKEA broke several of the rules of international retailing. Already well-established and large furniture retailers often adopted IKEA’s formula in their own operations. IKEA is credited with being partly responsible for a shift in furniture buying behavior in the US, as choosing furniture has become a matter of personality, lifestyle, and emotions in addition to functionality.
500
Should IKEA expand further in the United States or focus on other countries?
While expanding further in the United States is certainly important, the most logical step would be to continue expanding further into other countries. Countries which have less diversity and are more ethnically homogenous than the US will enable IKEA to expand relatively easily. Moreover, their geographic locations in relation to Sweden would aid in terms of obtaining needed materials and supplies.
500
How does the TV advertising campaign initiated by IKEA overcome the entry barrier of high advertising expenditures?
IKEA developed a series of 8 TV advertising spots that featured people at different transitional stages in their lives when they were most likely to be in the market for furniture. The success outweighed the expenditures.
M
e
n
u