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Reference no. 398-173-1
Prize winner
Michel Roger (Groupe CPA); Paul Grol (Groupe CPA); Christopher Schoch (Groupe CPA)
Published in:
40 pages
Data source:
Field research
As companies in an increasing number of industries enter the global marketplace they must adapt not only to different market conditions but also to different cultural demands. IKEA, the only world scale furniture distributor, has succeeded in doing both without sacrificing its unique culture and way of doing business. Its thirty-year saga of international expansion has been driven by the inspirational, almost missionary, zeal of its founder Ingvar Kamprad. This case explores IKEA's successful international development through the lens of both corporate and national culture where, as a Swedish company, it may benefit from cultural 'competitive advantage'. It begins with an analysis of how IKEA approached the culturally diversified West European markets, and then describes how the company avoided near disaster in the United States, 'the graveyard of European distributors'. Background is provided for reflecting on IKEA's immediate future, which includes a major succession issue, and growing pressure for change. Should IKEA diversify its organisational culture and management as it increases its investment in North America, Eastern Europe and Asia? Should it decentralise decision making to better match its products to local markets, or should it pursue its global product lines to maintain economy of scale and unique brand recognition? The authors let the reader decide how best to leverage IKEA's core-competencies in facing these challenges. A technical note 'Managing Cultural Diversity: Change Across Borders' (398-173-6) is available to accompany the case.
Europe, USA, Furniture retailing, 1996, 33,400 employees in 28 countries
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