Ikea: Expanding Through Franchising To The South American Market

4127 words - 17 pages

CASE STUDY III.2IKEA: expanding through franchising to the South American market?It is the beginning of 2011, and Ingvar kamprad, founder of the Swedish furniture retailing giant IkEA, is concerned 'his' firm may be growing too quickly. he used to be in favour of rapid expansion, but he has now started to worry that the firm may be forced to close stores in the event of a sustained economic downturn. on the other hand, IkEA is active in nearly all the world's con- tinents, though to a lesser degree in South America. kamprad wonders if this continent, and in particular Brazil, could be a future growth market for IkEA.Although IkEA is one of Sweden's best-known exports, it has not, in a strict legalsense, been Swedish since the early 1980s.the store made its name by supplying Scandinavian designs at Asian prices. It managed its international expansion without stumbling. Indeed, its brand - which stands for clean, green and attractive design and value for money - is as potent today as it has been at any time in more than 60 years in business.the parent of all IkEA companies - the operator of 253 of the 287 worldwide IkEA stores - is Ingka holding, a private Dutch-registered company. Ingka (taken from the first few letters of kamprad's name) belongs entirely to the Stichting Ingka foundation. this is a Dutch-registered, tax-exempt, non-profit-making legal entity, which was given kamprad's shares in 1982. Stichtingen, or foundations, are the most common form of not-for-profit organization in the netherlands; tens of thousands of them are registered.Most Dutch stichtingen are tiny, but if Stichting Ingka foundation were listed it would be one of the netherlands' ten largest companies by market value. Its main asset is the Ingka holding group, which is con- servatively financed and highly profitable.Valuing the Ingka holding group is awkward, because IkEA has no direct competitors that operate globally. Shares in target, a large, successful chain of stores in the uS that makes a fifth of its sales from home furnishings, are priced at 20 times the store's latest full-year earnings. using that price/earnings ratio, the Ingka holding group is worth €35 billion.Source: www.ikea.com.now Ingvar kamprad has heard that the top man- agement of the IkEA group plans to make a further international expansion, into South America, because of the growth opportunities there. kamprad is very sceptical about these plans and his personal assistant has asked you, as an international marketing specialist, to get an expert opinion about the plans . . .IKEA - the storyIkEA Svenska AB, founded in 1943, is the world's largest furniture retailer and specializes in stylish but inexpensive Scandinavian designed furniture. In 1943 the founder of IkEA, Ingvar kamprad, from Agunnaryd, Sweden, registered the name IkEA, which was formed from the founder's initials (Ik) plus the first letters of Elmtaryd and Agunnaryd, the farm and village where he grew up.the first IkEA...

Find Another Essay On IKEA: expanding through franchising to the South American market

Slavery in the American South Essay

1810 words - 7 pages Slavery in the South Slavery was a big part of life in the South. Many plantation owners relied on slaves and their work to help get the money and crops they needed. There were two types of slaves in the South at this time. There were house slaves and there were field slaves. House slaves consisted of servants, maids, and butlers. They were normally treated better than the field slaves (Biel 14). They got to be inside most of the time

Topics that XYZ Construction, Inc. Should Engross Before Expanding Into the Global Market

2226 words - 9 pages responsibilities the company must be proactive in preventing, such as the violation of basic worker rights. While, not all of the aforementioned things are road blockers for expanding the company, they should just be extremely vigilant in understanding the multiple differences of the global market. This assignment was a revelation for me; I did not realize the types of things international companies have to deal with when conducting business in

The Grotesque Gem of the American South: Different Approaches to the Okefenokee Swamp

1079 words - 5 pages Deep in the American South lies a swamp so vast, so diverse, so mysterious, perspective changes its very nature. The appeal of this swamp, the Okefenokee Swamp, as an inspiration for writers lies not only in its mystery, but also its many faces. Describing the swamp, from its terrain to its inhabitants, authors can bring out its beauty or terror, depending on their purpose. While both Passage 1 and Passage 2 define and describe the Okefenokee

In what important ways is the American South Different to the North?

1229 words - 5 pages banned post war, the North industrialised, while the South continued to focus on agriculture and cotton.      The North had undoubtedly made steps towards becoming fully industrialised, through improved railroad systems, more mechanical farming which required less workers, however the steps were not as large as many assume. Southern agriculture was highly advanced and arguably rivalled many on the world market. The North

Changing The World Through Words. How Guevara uses beautiful and unique language in Motorcycle Diares to illustrate South America

594 words - 2 pages In the memoir Motorcycle Diaries, Ernesto Guevara embarks on a journey of self discovery through Latin America. With his companion, Alberto Granado, they set off on their motorcycle, La Ponderosa II. It is the true account of a journey that later turned into a film which touched the souls of many. Most Americans would say a movie's visualizations are better embraced because you are able to witness it as opposed to reading it. Readers are able to

Plantation Ruins in The American South

2183 words - 9 pages Plantations represent a very particular, traditional time in the south. Ironically they design a sense of both pride and shame for the prestigious southern families that owned and ran them. This is a focus on ruins of plantations that have been lost through time but just enough remains to give us a sense of wonder. Such plantations as the Rosewell, Millwood, Forks of Cypress, Bulow, Windsor.. Most of what remains are just columns and walls but

The American Dream according to the 1970s and Norman MacLean's "A River Runs Through It"

1415 words - 6 pages Again and again, the American Dream changes more rapidly than most decades have a chance to change. The novel, A River Runs Through It, written by Norman MacLean, suggests a cold feeling growing in the 1970s, one that took away from everyone's time to relax in nature, although there are bleak times of pride and joy that almost suggest that times are changing in their entirety (MacLean). Even such rock n' roll bands such as the great Led Zeppelin

The Shift Of American Dreams Through Advertisements

1853 words - 8 pages their customers and defeated their competitors. Advertising itself had become some of the most pervasive media in our society. They promoted the image of high self-esteem, successfulness through their products. This was the first American Dream – self-identify and self-esteem. The dream became evolving into the stock market where people believed their dream could come true. After the burst of stock market, people came back to the reality and

Through the careful reading of American Colonies

1435 words - 6 pages Through the careful reading of American Colonies, written by Alan Taylor, it is clear that there are vast differences as well as a number of similarities between the European competitors as they began to colonize the Americas but diversity can also be found within the colonies they would create. American Colonies shows a close relationship between climate, the state of the economy, and the development of slavery. The varying climate within the

The South: The Creation of the African American Community

805 words - 4 pages The concept of a new beginning is a repetitive theme that occurs in African American literature, mostly, in the geographical form of The South. Used as a literary landscape, The South is more than a representation of the horrors that African-Americans had endured during the time of slavery. It is there that African-Americans developed a society and culture that was constructed through the struggles of their ancestors and the mechanisms that had

A Study of the American Stock Market

1757 words - 8 pages The history of stock markets or exchanges is long and complex, and dates back before the birth of America. Early records of stock markets go clear back to the 1600’s when it consisted mostly of spice trades and shipping. The stock markets as we know them today are much different of course, and that is because of their vast ability to facilitate business all over the world. The American stock market, which we will be focusing on, was adapted

Similar Essays

Ikea: Expanding Through Franchising To The South American Market

4127 words - 17 pages CASE STUDY III.2IKEA: expanding through franchising to the South American market?It is the beginning of 2011, and Ingvar kamprad, founder of the Swedish furniture retailing giant IkEA, is concerned 'his' firm may be growing too quickly. he used to be in favour of rapid expansion, but he has now started to worry that the firm may be forced to close stores in the event of a sustained economic downturn. on the other hand, IkEA is active in nearly

Ikea: Expanding Through Franchising To The South American Market

4127 words - 17 pages CASE STUDY III.2IKEA: expanding through franchising to the South American market?It is the beginning of 2011, and Ingvar kamprad, founder of the Swedish furniture retailing giant IkEA, is concerned 'his' firm may be growing too quickly. he used to be in favour of rapid expansion, but he has now started to worry that the firm may be forced to close stores in the event of a sustained economic downturn. on the other hand, IkEA is active in nearly

The Expanding Field Of Sports Sponsorship And Relate It To Growth In Market Share For Multinational Organisations

2475 words - 10 pages returns for their investments in sponsorships? The effectiveness of the developed theory will be considered by measuring the profitability of the company with regards to market share by testing awareness in the market, recall by the audience and ultimately analysing the market share of the organisation.1.0 IntroductionMost Companies with a profit motive are constantly trying various techniques to increase there revenues through different forms of

Expanding Access To The International Baccalaureate

2663 words - 11 pages strategic imperatives. One of the most pressing strategic challenges of the organisation is opening up the access of its programs to those disadvantaged through economic or geographic disparities. The IBOs rapid expansion and development of a near monopolistic brand in recent decades has attracted some criticism for its ad hoc expansion, maintenance of Western ideals, and a tendency for catering exclusively to the socioeconomic elite. In a