宜家中国本土化商务战略分析

Q1:Is there a middle class effect in
China? If so, to what extend does it
benefit IKEA?
Distribution %
Increase in GDP/Cap + 50%
Very Poor
Increase in Middle Class
Q1: Are there any unattractive features of locating in China?
1. Heavy-duty rate from the government 2. Competition from B&Q 3. Competition from the local low-cost furniture
• Chinese furniture market expands very fast owing to the economic reformation in China from 1978.
• In 2000,“Furniture Price Campaign” has been spread over the market.
+ 110%
Poor
Middle Class
GDP/Cap
Rich
Q1:Is there a middle class effect in China? If so, to what extend does it
benefit IKEA?
• When IKEA first entered China, its target consumers are young, professional couples.
UK-based B&Q Imitation
Raw materials
Cheap labor
Increasing the number of its manufacturing facilities
the environment as overall favorable to Ikea
The adjustment of law and regulation to attract foreign investment, the rapid economic growth, the huge demand in domestic market and abundant of raw materials and labors for furniture manufacturing are push and pull factors that lead IKEA to enter and exploit Internationalization of IKEA in Chinese markets . In addition, the entry of IKEA to Chinese market gives the company transaction advantage to produce its products locally. As a result, IKEA can offer lower prices and compete with other competitors in Chinese market (Johnson 2008). The capability of the company to internalize has been implicitly
Q1: What makes China an attractive location for IKEA to
invest in?
• Social 1. Updating of the basic needs(urbanisation) 2. Large numbers of its target consumers • Technological 1. Supply chain 2. More manufacturing facilities • Environmental 1. Resources
• Considered middle-range of Shanghai. • Workforce • Repeat customers
2)What are the characteristics of the industry in which Ikea (China) operates?
Characteristics of Chinese Furniture Market
Consider the extent of competition and the availability of input. Would you describe the environment as overall favorable to Ikea?
competition input
Heavy import taxes
Since 1980s, several economic trade and investment reforms have enabled the growth of furniture industry in China by 2004, Chinese furniture production was $24 billon and its exports were $7 billion.
What strategies did IKEA adopt in China?
Globally standardized strategy
The main reason for the choice of the aforementioned strategy is ;
• creation of constant value quality chain of products in all countries.
markets/countries • According to report of National Bureau of
Statistics of China in 2002, China has 30 million middle class people. • The effect is more visible in urban cities like Shanghai, Beijing or Guangzhou(huge flow of
• In 2005, it provides a great occasion for foreign manufacturer, retailers and wholesalers.
• status symbols are important in China.
1990-2005 China's import tariff reduction
Q1: What makes China an attractive location for IKEA to
invest in?
• Economical 1. Emerging market 2. Basic need updated to sophisticated wants 3. New market space for newcomers 4. Cheap labour cost 5. Wood industry (top supplier)
LOW ATTRACTIVENESS
LOW RISK
LOW RETURN
HIGH
RISKS
LOW
Q1:Is there a middle class effect in China? If so, to what extend does it
benefit IKEA?
• YES • Middle class effect in emerging
opportunities
Resources: raw materials from
China
Incentives: declining of the duty rate
Q1: What makes China an attractive location for IKEA to
invest in?
IKEA IN CHINA
Introduction to IKEA historical chain of IKEA
BRIEF INTRODUCTION OF IKEA IN CHINA
IKEA entered China in 1998 through a joint venture and started its first in Shanghai. This was followed a store in Beijing in 1999.
• Political 1. The reform of China since 1980’s 2. Entered through a joint venture 3. In 2005, first wholly owned store in
Guangzhou.(China entered WTO in 2001)
Concept: Simplicity is beauty. Yi Jia-comfortable home
Q1: What makes China an
attractive location for IKEA to
Market: emerging market源自文库 small to high size market; customer quality is low but shows an increasing trend
100%
80%
60%
40%
20%
0% 1990
1995
1999
2002
2003
2005
Chinese furniture industry
export import
1997: ﹩959,138,000
2005: ﹩6,843,164,000
(27.84%)
1997: ﹩22,510,00
2005: ﹩82,719,000
• To observe an economic of scale and economic of scope.
• Loyalty to supply chain network.
What are the factors that induced IKEA to pursue
companies 4. “Chinese reluctance to spend money”
IKEA OPPORTUNITY/RISK TABLE IN CHINA
HIGH OPPORTUNITIES
LOW
HIGH RISK
HIGH ATTRACTIVENESS
IKEA HIGH RETURN
invest in?
Competition: intensity of rivalry is strong; facing some
entry barriers; bargaining power is high; a long-term profitable business
Country market & industry
(17.67%)
The characteristics of the industry in which Ikea operates in China
• At first , IKEA entered China through a joint venture. • Offering a wide range of well-designed , functional
home furnishing standardized products.( Ian Duffy). • Later, it adapted itself to China’s national , economic
and cultural conditions. • 23% of its furniture is locally made.