IKEA in China: Competing through Low-Cost Strategies



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Code : COM0112

Year :
2006

Industry : Retailing

Region : Sweden China

Teaching Note: Available

Structured Assignment : Not Available

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Abstract: With a simple mission statement "to create a better everyday life for the Chinese people", IKEA entered China in 1998. Initially it faced challenges due to high duty rates and the strict quotas levied by the Chinese government. To attract customers in China, IKEA adopted a low-cost strategy and started offering quality furniture at discounted prices. Although, IKEA tasted success in China, analysts are skeptical whether the price-reduction strategy of IKEA would benefit it in the long run amidst stiff competition and the changing customer preferences.

Pedagogical Objectives:

  • To understand the impact of customer preferences on the furniture retailing industry in China
  • To discuss how IKEA gained competitive advantage by differentiating its products and maintaining a cost leadership in the furniture retailing industry of China.

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    Keywords : Global furniture retailing industry; Furniture retailing industry in China; Competitive Strategies Case Study; Customer preferences in China; Foreign furniture retailers in China; Domestic furniture manufacturers in China; Price of furniture in China; B&Q; Customer spending habits in China; Supplier countries of IKEA; IKEA's global operations

    Contents :
    IKEA: A Brief Profile
    IKEA's Foray into China
    IKEA's Low-Cost Strategy


    Case Introduction >>


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