Case Study on Ikea

QUESTION 1: Why did IKEA decide to venture Malayan mart through franchising? Do you agree with this dodging? What could polish off been alternative strategy? Answer: IKEA entered the Malaysian market assign 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 exceptes 3% to IKEA world wide sales. IKEA enter Malaysian market through franchising are because they have use a unprogressive polity to globalization. The general rule of this policy is that the firm never enters new potential market by opening retail outlet. Instead, a supplier link with host nation is established. This is a strategic jeopardy reducing ca-ca along in which topical anaesthetic suppliers provide input. IKEA has concentrated it world(prenominal) expansion in ASIA in the main through family owned subsidiaries. Franchising on the some other hand, has been extensively use 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 croak the local call fors. 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 invaluable input. Example of the inputs are culture which is during feast the supplier need provide items that related to Malaysian fe! ast 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 forefront quarters can focus on other Copernican 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 get a full essay, order it on our website: OrderEssay.net

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