Juliet S.

Punongbayan
BA3102
International Business and Trade

Task Performance

1. IKEA is very Sweden-centric; that is, they like doing it the Swedish way, from the names of the
furniture to the management of the company. Sweden is a neutral country so maybe this is the way to go
for a global company, but is it smart to be too centric to a specific country when you are a global
corporation?

Answer:

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No, it is now wise to be too centric to a specific country when you are a global

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corporation. It is important to understand that people from various countries have

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certain preferences. As such, if a company presents a product in a certain manner and is

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successful in that country, it should not assume that replicating the same will guarantee

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success in other countries. Companies must tailor their products to meet the needs and
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wants of the consumers in a specific country. Moreover, there are existing factors in
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countries that make certain management strategies either successful or not. this may
include the legal policies in place, the strategies the competitors are using, and the
economic system of the country. Given that these vary from country to country, it would
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be unwise to use the same approach to management in all countries. If a company is to

succeed globally, it must learn how to twist its approach to management, sales,
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marketing, promotions, and other activities concerning the country that it is operating
in.

2. IKEA is also very “IKEA-centric.” For example, the IKEA store itself will be laid out as a maze
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that requires customers to walk through every department before they reach the checkout stations. This
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forced path can seem constraining to their customers who naturally are freer spirited than the IKEA
management model. Can this spell trouble shortly, or is the IKEA way a sustainable business model?

Answer:
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 I think the layout is good. It requires customers to walk through every department
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before they reach the checkout stations. The stores are often structured as a one-way
layout, leading customers counterclockwise along what IKEA calls “the long natural way.”
This “way” is designed to encourage customers to see the store in its entirety. Cut-off
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points and shortcuts exist but are not easy to figure out. So, IKEA still provide cut-off
points and shortcuts and only can be found by more free-spirited people. And I think the
IKEA “way” is a sustainable business model because it gives many experiences for
customers.

3. Strategically, having more than 1,000 suppliers result in a complex task of managing those
suppliers, ensuring the quality of the products, and maintaining the IKEA brand. While we will address

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global supply chains later, from a global strategy standpoint how would you manage IKEA’s global
suppliers?

Answer:

 A global network of more than 1,000 suppliers based in more than 50 countries
manufactures most of the 12,000 or so products that IKEA sells. IKEA itself must focus on
the design of products and works closely with suppliers to bring down manufacturing
costs. Developing a new product line can be a painstaking process that takes years.
IKEA’s designers will develop a prototype design (e.g., a small couch), look at the price
that rivals charge for a similar piece, and then work with suppliers to figure out a way to
cut prices by 40 percent without compromising on quality. IKEA also manufactures about
10 percent of what it sells in-house and uses the knowledge gained to help its suppliers
improve their productivity, thereby lowering costs across the entire supply chain .

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