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Why do you think IKEA’s expansion into Europe went so well? Why did the company subsequently stumble in North America? What lessons did IKEA learn from this experience? How is the company now applying these lessons?

The IKEA Europe expansion went so well as we know that is where the company was founded. In 1943 entrepreneur Ingvar Kamprad took his ideas he learned from his homeland of Sweden to produce a store that churned out pens, wallets, and watches. According to Business Today, "In Europe and in the US, where most customers use personal vehicles, IKEA stores are usually located in the suburbs" (Chu, 2013). The commonality of their customers and how they use transportation is one reason why the expansion went fairly smooth. Americans demanding bigger beds and bigger clothes, as opposed to China, is one strategy from a marketing perspective that had to be altered as it contributed to them stumbling subsequently. One of the lessons that they learned from that particular experience was to understand what could make a profit where and how to position that: each region and city may have a different demand for a certain product through various periods of the calendar year. The company is applying those lessons on the fly after seeing the results as a successful organization should go about it. For instance, Americans are one of the most obese nations in the world so adjusting their bed sizes relatively to China was something that contributed to profits. Sticking to lower prices and staying true to their brand is a valuable lesson they learned that has kept them in business for decades.

Reference

Chu, V. (2013, December 06). How IKEA adapted its strategies to expand and become profitable in China. Retrieved October 4, 2018, from https://www.businesstoday.in/magazine/lbs-case-study/how-ikea-adapted-its-strategies-to-expand-in-china/story/19https://www.businesstoday.in/magazine/lbs-case-study/how-ikea-adapted-its-strategies-to-expand-in-china/story/196322.html6322.html

by EssayRoyal, Dec. 10, 2019, 5:58 p.m.

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