IKEA: A company pursuing globalization with Swedish design

As IKEA has expanded into more and more countries, it has becomeone of the most successful retailers in the world. Looking forward,IKEA hopes to successfully expand into India, despite strictguidelines, and grow its Chinese market. You are a member of theteam that helps develop the company’s international expansionplans.

As the company prepares to sell and open more stores in theIndian and Chinese markets, which type of strategy would yourecommend to best help IKEA expand?

A-Regionalization of its products and business model to servethe specific markets

B- Standardization of its products and business model tomaintain consistency in each market IKEA enters

2-

Standardization

The team went with your recommendation of a standardizationstrategy. In what way would IKEA standardize its stores to bestserve the Chinese market?

A- Offer the same at-home delivery model as the United States inwhich customers can choose to pay for delivery and assembly

B- Sell the original Swedish lines of products as-is inChina

3-

Cost Structure vs. Design

Based on the previous realizations, you have two options: Lowerthe cost structure for the Chinese market to maintain competitiveprices or build IKEA’s products with lighter but more expensivematerials, so that Chinese customers can easily carry theirpurchases home without having to pay for delivery.

A- Build IKEA’s products with lighter materials

B- Lower the cost structure for the Chinese market

4-

Chinese Design vs. Swedish Design

You’ve decided to sell IKEA furniture with lighter materials sothat homeowners with no vehicles in urban environments will be ableto carry their purchases home to their apartments. In designingthese lighter IKEA products, which of these would be the mosteffective choice in serving the Chinese market?

A- Bring in Chinese designers to create versions of IKEA’sproducts tailored to the preferences and needs of Chinesecustomers

B- Leave it up to the designers in Sweden to replicate theirstandard products in a light-weight style

5-

Regionalization

As IKEA pursues a regionalization strategy in India, you havelimited resources prior to launch. You are able to focus on justone strategy to get the stores open. You may be able to addressadditional strategies later. In the short term, which of thesestrategies must happen for the store to be able to open and shouldbe the focus of your team’s work early on?

A- Design furniture to suit the preferences and style of Indiancustomers

B- Modify the IKEA menus in store restaurants to suit thepolitical and religious sensitivities of Indian customers