Rennes International School of Business ESC RENNESExecutive Master of Business Administration EMBA COHORT 1 (2003 - 2004) INTERNATIONAL BUSINESS Conducted by: Jamie SMITH IKEA Case Report By Magdy A. Sattar February, 2004 Cairo, Egypt
IKEA CASE1. What have been the key success factors for IKEAs global expansion? Development of unique product design capabilities inspired from the Swedish culture with an international appeal. Balancing customer requirements of a good designed furniture at a law price with the supplier need for profit through efficiency and long production runs. New and bold ideas and strategies of marketing (catalogues), Human resource (learning by Doing) Cost reduction (knocking down furniture).2. In what ways has the international culture been a challenge for IKEA? Though IKEA has been in Germany since 1974 German employees still perceive the IKEA WAY as peculiar, obviously it did not satisfy their needs of precise and firm work environment until now. An announcement board was the action taken to satisfy the French employees need for formal, clear communication procedures. In north America it toke five years to appeal to the American customer and conceive his needs Turn over in the American employees is high in spite of IKEA career security simply for the lake of career clarity.3. What are the three things that IKEA had to learn in order to do business effectively in the United States? American household’s characteristics. American buyer preferences. American administration tools.4. How well has the company been able to deal with the diversity issue?Diversity issue is not perceived as an obstacle by the Swedish ikeaans atall. Except in a certain circumstances where the diversity issue is broughtup very clearly, (American cases of the dinning room and display floorredesigning).
5. What else does it still need to do? Clear interpretation and communication of the constitution of IKEA (IKEA WAY) to all Coworkers. Regional offices equipped with training centers and professional trainers. Clear H/R policy (job description, career development).6. What are the main challenges that IKEA faces for the future? Drifting away from the roots of IKEA without being able to adapt or embrace a new or clear way The very thing that made IKEA what it is and holds it together is its founder Ingvar Kampard , How much more can he keeps it together? Competition is getting tougher as Local competitors is getting tougher Turn over among employees