International Business Strategy. IKEA's Foreign Expansion into the Chinese Market

Alex Bremann

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Seminar paper from the year 2017 in the subject Business economics - Business Management, Corporate Governance, grade: 1,7, Unive...

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Seminar paper from the year 2017 in the subject Business economics - Business Management, Corporate Governance, grade: 1,7, University of applied sciences, Munich, language: English, abstract: Having only operated in the western culture, the Chinese market was one that IKEA had little to no experience of. Changing dynamics of consumer behavior and strong heterogeneity in terms of customers made it difficult for IKEA's managers to predict future market trends in China. Before entering the Chinese market, IKEA had to consider, high import taxation, complex government regulations, complex consumer buying behaviors, and strong competition. The paper will evaluate IKEA's market entry strategies, routines & firm specific-advantages. Using Verbekes model to identify IKEA's early expansion into foreign markets will give the reader a clearer overview of IKEAs international operations. Looking into the Chinese market with the use of Porters Diamond model, while considering IKEA's various approaches to become successful in such an economically strong market, will give the reader some practical insights of the difficulties that can arise while expanding into foreign markets.