Homework Help is Here – Start Your Trial Now!
Business
Marketing
Resources on IKEA and Prices Around the World:

Resources on IKEA and Prices Around the World:

Principles Of Marketing
Principles Of Marketing
17th Edition
ISBN:9780134492513
Author:Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:Kotler, Philip, Armstrong, Gary (gary M.)
Chapter1: Marketing: Creating Customer Value And Engagement
Section: Chapter Questions
Problem 1.1DQ
See similar textbooks
icon
Related questions
Question

Resources on IKEA and Prices Around the World: 

IKEA China is a joint venture between the IKEA Group and the chinese government. This enterprise was an excellent way to test the market, discover local demands, and change techniques to obtain a competitive edge. With that said, let us discuss more on the macro- environment and micro environment of IKEA in China. Please refer to the next step for futher explanation. Most manufacvtures start by designing a promduct and then figuring out how to create it at a certain cost Pricing is the most important factor for IKEA. IKEA can achieve cost leadership in various ways, including cost control from design to manufacture, changing the traditional role of customers, flat-pack strategy, and selling atmoshpere. Political the chinese government's and legal systems power trends to favor domestic businesses. This may be observed in China's difficulty in protecting intellectual property, leading to the emergencies of more imitation IKEA stores. The growth of internet shopping merchants, who can give similar products at lower rates. is also a challenge to IKEA. Economical chinese buyers demand good quality while seeking the lowest possible price., Alothough IKEA's costs were reasonable compared to their European competitors, they were rather high compared to the chinese customer when they first entered the market. IKEA was obliged to slash prices due to this, which triggered a chain reaction inside the value chain, leading IKEA to search for methods to cut costs in all sectors. Social IKEA did not adapt its businss pratices to fit into Chinese culture for a long period. Chinese consumers prefer western styles and frequently immitate them in various sectors, including home funiture. IKEA'S items are of great quality: therefore, expect hefty pricing. IKEA had difficulty balancing these expectations with the low prices of the Chinese furniture marketplaces. Technology development of distribution systems, payment systems, the rapid development of information technology. especially in terms of social networking and advance e-coomerce systems are all the technological factors that have a direct impact on IKEA China. Other factors the legal consequences of entering the Chinese market are numerous. IKEA had to form a joint venture to avoid these trade proibitions. While they retained management control, the expansion process was halted because property ownership was only allowed through the Chinese partner. This reduced IKEAS market reach in China, as well as the pool of potential customers. Opportunities the purchasing power of Chinese people is increasing in recent times or can say have hopped back to normal post- pandemic.
Transcribed Image Text:IKEA China is a joint venture between the IKEA Group and the chinese government. This enterprise was an excellent way to test the market, discover local demands, and change techniques to obtain a competitive edge. With that said, let us discuss more on the macro- environment and micro environment of IKEA in China. Please refer to the next step for futher explanation. Most manufacvtures start by designing a promduct and then figuring out how to create it at a certain cost Pricing is the most important factor for IKEA. IKEA can achieve cost leadership in various ways, including cost control from design to manufacture, changing the traditional role of customers, flat-pack strategy, and selling atmoshpere. Political the chinese government's and legal systems power trends to favor domestic businesses. This may be observed in China's difficulty in protecting intellectual property, leading to the emergencies of more imitation IKEA stores. The growth of internet shopping merchants, who can give similar products at lower rates. is also a challenge to IKEA. Economical chinese buyers demand good quality while seeking the lowest possible price., Alothough IKEA's costs were reasonable compared to their European competitors, they were rather high compared to the chinese customer when they first entered the market. IKEA was obliged to slash prices due to this, which triggered a chain reaction inside the value chain, leading IKEA to search for methods to cut costs in all sectors. Social IKEA did not adapt its businss pratices to fit into Chinese culture for a long period. Chinese consumers prefer western styles and frequently immitate them in various sectors, including home funiture. IKEA'S items are of great quality: therefore, expect hefty pricing. IKEA had difficulty balancing these expectations with the low prices of the Chinese furniture marketplaces. Technology development of distribution systems, payment systems, the rapid development of information technology. especially in terms of social networking and advance e-coomerce systems are all the technological factors that have a direct impact on IKEA China. Other factors the legal consequences of entering the Chinese market are numerous. IKEA had to form a joint venture to avoid these trade proibitions. While they retained management control, the expansion process was halted because property ownership was only allowed through the Chinese partner. This reduced IKEAS market reach in China, as well as the pool of potential customers. Opportunities the purchasing power of Chinese people is increasing in recent times or can say have hopped back to normal post- pandemic.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
Recommended textbooks for you
Principles Of Marketing
Principles Of Marketing
Marketing
ISBN:
9780134492513
Author:
Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:
Pearson Higher Education,
Marketing
Marketing
Marketing
ISBN:
9781259924040
Author:
Roger A. Kerin, Steven W. Hartley
Publisher:
McGraw-Hill Education
Foundations of Business (MindTap Course List)
Foundations of Business (MindTap Course List)
Marketing
ISBN:
9781337386920
Author:
William M. Pride, Robert J. Hughes, Jack R. Kapoor
Publisher:
Cengage Learning
Marketing: An Introduction (13th Edition)
Marketing: An Introduction (13th Edition)
Marketing
ISBN:
9780134149530
Author:
Gary Armstrong, Philip Kotler
Publisher:
PEARSON
MKTG 12:STUDENT ED.-TEXT
MKTG 12:STUDENT ED.-TEXT
Marketing
ISBN:
9781337407595
Author:
Lamb
Publisher:
Cengage
Contemporary Marketing
Contemporary Marketing
Marketing
ISBN:
9780357033777
Author:
Louis E. Boone, David L. Kurtz
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS