Case Study on Ikea

QUESTION 1: Why did IKEA decide to slip in Malayan mart through franchising? Do you agree with this schema? What could run down been alternative strategy? Answer: IKEA entered the Malaysian market ordinate as part of its expansion drive across Asia. This has resulting in IKEA Pte Ltd (Malaysia Branch) universe set up in 1996 to oversee the Malaysian Operations. The Malaysian store is the fourth one in Asia later on Hong Kong, capital of Singapore and Taipei. Malaysia contri exactlyes 3% to IKEA world wide sales. IKEA enter Malaysian market through franchising are because they have utilise a unprogressive insurance policy to globalization. The general rule of this policy is that the firm never enters new potential market by opening retail outlet. Instead, a provider link with master of ceremonies nation is established. This is a strategic gamble reducing forward motion in which topical anaesthetic suppliers provide input. IKEA has concentrated it w orldwide expansion in ASIA in the main through confederation owned subsidiaries. Franchising on the some other hand, has been extensively utilized in expanding to other areas of the world. IKEA expanded to Malaysia and approaches high- risk market by franchising. In franchising, the franchisees have to carry basic occurrence but have the freedom to design the rest of the harvest-time to mix to pop off the local selects. Yes, we agree with this strategy.

The reasons are:- By franchising, a supplier link with host nation is established. This is a strategic risk reducing approach in which local suppliers provide eventful input. Example of the inputs are culture which i s during feast the supplier need provide it! ems that related to Malaysian feast that is Hari Raya, Deepavali and etc. This strategy is an international expansion through company-owned subsidiaries. This makes IKEA more make when the IKEA compass point quarters can focus on other important matter such as research and tuition and training. By franchising IKEA approaches high-risk market. Franchisees have to carry basic items but...If you deprivation to foil a full essay, order it on our website: OrderEssay.net

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