IKEA's Global Renovations Management Case Study

IKEA’s Global Renovations
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Question One
IKEA is a Swedish company that was established in 1935 by Ingvar Kamprad who was keen on offering a variety of well-designed home furniture products at low prices that could be afforded by all people in society. Over the years, the company has grown immensely and expanded into various countries around the globe including Russia. Despite its successes in Russia, IKEA was faced with several micro and macro-political risks when it first entered the region. To begin with, IKEA was impeded by cultural issues since Russia and Sweden are very different and it was extremely difficult changing the culture without with reevaluating its brand values. In this regard, while IKEA is keen on receiving comprehensive resume to identify candidates that blend with its business model, Russians tend to focus on education and competence. Secondly, IKEA also faced training issues in sense that Russian employers and employees prefer academic training. On the contrary, IKEA ensured the provision of “shop floor training” by a group of its internal trainers. Lastly, massive corruption in Russia was also a major factor that risked IKEA’s operations in the region. It is reported that Russia paid out or was rather cheated out of more than $190 million in the form of bribes. IKEA’s efforts to play fair were met with blow after blow including cancellation of opening ceremonies for some of the new stores.
Question Two
It is highly essential that multinational organizations plan their entry into foreign territories. Over the years, IKEA has employed and adjusted its entry mode into different host countries For one, IKEA entered China through joint venture with the Chinese government. Considering the extreme cultural differences between Asia and Sweden, the Asian market had proven to be very diff...