A Case Study Of Ikea In China Market Marketing Essay

The reason for this report is going to understand how the diverse culture impacts on the procedure of the business in the global business. On the other hand, it is also aiming to produce an effective solution of dealing with the ethnic differences for managing the cross nationwide activities.

With the ongoing immediate development of the globalization, specifically, the increasing of global trading and firm, it is unavoidable that different cultures meet mutually. However, because the organic of the culture in difference areas, exhibiting the multifaceted characteristic, the culture issue is inescapable as well. The folks from diverse culture think it is is difficult to talk to each other, not only due to the language hurdle, but also the affected by the difference of the culture styles. As the diversity of culture boosts the ambiguity and confusion and it deteriorates the potency of the team working, the companies or organizations including in the global market are immediately facing the challenge with regard to adopting in cultural diversity. In the end, the cross-cultural management gets more and more important, which is in a position to bridge the gaps between your difference cultures. The management of the across cultures becomes important for multinational companies and the global organizations in going after their international strategy.

In this report, it analyses the situation of IKEA's social management, a Swedish furniture company, and know how IKEA effectively conducts its business procedure in China market, where has the significant difference culture with western countries.

Cross-cultural Management

Cross-cultural management, as a fresh field, is very complicate and relating multifaceted issues, it is therefore very difficult to specify this new business concept.

Cross-cultural management is usually including in the international business activities in globally, which is the subject regarding how to maintain the local culture, basing on the new thoughts, working with ethnical difference.

For the multinational companies, the technique of cross-culture management is able to help the management to handle the troubles and opportunities of managing their workers in a social diverse organizational situation. Increasing globalization has created more knowing of the necessity for professionals to be delicate to the ethnical areas of decision-making (Miller, 2010).

Analysis

The analysis starts off by talking about the difference between from american culture to Chinese language culture.

Difference between Chinese and European Culture

There is a big change between the key philosophies of Chinese language and traditional western life. China can be an ethnically and culturally diverse country, and its own dominant cultural custom has been greatly inspired by Confucianism and Taoism, which is totally different from western heritage.

As the Chinese culture has its values, background and unique opinion system, therefore westerners find the Chinese culture complex, and hard to comprehend. Because of the diverse culture between western and Chinese, the lifestyle of european and Chinese is also vast difference in a few aspects. The western has a lavish lifestyle, while the majority of Chinese are prone to having a humble approach to life. For instance, the Chinese may have no more than 40 sq. ft of liveable space typically (Wang & Li, 2006).

There are in least three major dissimilarities between american culture and Chinese culture, arranging forth as the following

- Westerners have confidence in individualism, while China tend to be more incline on collectivism.

- The american culture encourages expressing the passion freely, and Chinese language culture express the feeling puritanically.

- The american culture thinks in a materialistic strategy, with a pragmatic and mental frame of mind, whereas the Chinese language believe in interactions, and looking for inner enjoyment through mediation (Wang & Li, 2006).

As mentioned before, due to the significant culture difference from difference geographical region, the multinational organization or the global organizations must change themselves in the given business environmental and situation with diverse culture, with a view to enhance the competitive border through taking benefit of the culture difference.

It is interesting to look at how IKEA to procedure its business from the cross-cultural management aspect. The business culture of IKEA Sweden is be used as basics for the contrast with IKEA China.

The Development of IKEA

IKEA, based on south of Sweden, was setup in 12 months 1943 by Ingvar Kamprad, in his 17 years of age. IKEA is merely global-scale furniture Distributor, its furnitures are greatly acknowledged as the international, low-cost and good -quality home products and IKEA's furnitures are also known because of its modern design (Dhanyasree, 2007). Presently, the Group has established more than 292 IKEA stores in thirty-six countries and the other stores are run by franchisees which can be out of the IKEA Group in 16 countries (Johansson & Thelander, 2009).

One of IKEA's business primary is to give a wide combination product, and useful right furnishing articles, with the lowest price possible to be able to attract as much as possible people to acquire them (Johansson & Thelander, 2009).

IKEA has extensively succeeded globally and they have an extremely strong business culture with aSwedish image. In order to enhance the culture point of view of IKEA, they make sure you interpret symbols (such as pictures or objects)in specific countries.

IKEA's Ethnic management in China

As the real-stated of commercial and domestic institutions boosted, it also increased the sales of home design and fixtures.

To load the increasing needs of decor market, especially the high quality furniture products. IKEA started out its retailing procedures in China and set up its first store in Shanghai in time 1998. The decision of IKEA to enter in Chinese market is due to supporting political, public and monetary conditions that allow IKEA to beneficially acquire advantages in the Chinese market (Skillet, 2005).

IKEA needs to face various challenges in terms of business methods, socio-economic and political conditions, as well as its unique culture in Chinese market. Chinese people from different parts may exhibit different characteristics as well. Taking the terminology for example, the spoken language varies greatly from region to region. It is not shocked that someone from Shanghai cannot understand residents of Guangdong province, if without special research of Cantonese.

In China, IKEA's products possess the image of wedding caterers to high-end consumers, whereas the perception of IKEA's products is regarded as a 'good value' buy elsewhere in world. To be able to attract larger number customers and keep maintaining the business in reasonable earnings, IKEA continues to implement the effective strategy both from external and internal ethnic management.

External culture management of IKEA

From the exterior cultural management point of view, to help Chinese language customers deeply understand the IKEA concept, the company also content in-house instructions and design recommendation, publishes brochures, which is sent out in the stores and through the mail, and manages a completed company website.

Meanwhile, in order to better understand Chinese people's standards of living and their home dreams and frustrations, IKEA performs a large quantity of home visits, surveys, and focus group meetings. In additional, IKEA also research the customers' comments on IKEA'S product range, price and service levels, and it supply the useful information for the business to position its goal consumers.

At the beginning, most of IKEA's China customers are range between 20 to 35 years old. Due to the marketplace repositioning strategy, the stores are now attractive a growing customers with age group shutting to 45. Among these customers, many are generally well-educated couples and earn higher double-income without children (Blomqvis, 2005).

In conditions of housing, the average rectangular meters per person in Sweden is much large than in China. Until recently, now Beijing and Shanghai rentals average 80 m2. To suit the specified needs of Chinese language consumers, IKEA must design and provide more storage pots and facilities (Blomqvis, 2005).

In additional, with keeping up-to-date research on Chinese home-life, IKEA alters products to meet up with the local customers need. For instance, IKEA sold standard size bedrooms in mainland China, while the consumers in the Sweden generally favor larger items.

In additional, the value of "the client is kings" is also deeply acknowledged in the Chinese people minds, and the Chinese customers prefer to take pleasure from the completed services in the whole process in their furniture purchasing activities. Normally, the Chinese customers would like to shopping accompany with the store staff to introduce the merchandise to them. In the mean time, for almost all of the Chinese customers, it is properly that the store staff to distribute the merchandise directly to their house and set up all the furniture as well (Skillet, 2005).

Nevertheless, IKEA creates the unique shopping environment in China, and educates customers of the idea of self-services. It motivates the customers arriving to personal if indeed they have any question or dependence on any assistance. Nowadays, Chinese language people would use IKEA Beijing Store as the theme part, going out in the store and directly go through the furniture.

Moreover, IKEA also adjust its do-it-yourself assemblage strategy to the Chinese language consumers, which are incredibly liked in the West. As the labor costs in western are higher than in China, the traditional western people choose the assembling product for saving cash and some of them actually enjoy install the furniture. In China, the individuals would rather the ready products and use the IKEA's set up services more than in other countries (Miller, 2010).

Internal culture management of IKEA

From IKEA's interior culture management aspect, there are distinctions on the list of working culture in every country. The american culture and Chinese language culture is factor in some aspects, which means business culture of Sweden and China is also clear diverse.

The theories pointed out that european culture is more inclined to the average person way, in this regard and the managers of IKEA Sweden are very good at marking contact and build up team work, plus they often want to leap into projects and get involved. In the same time, the communication in IKEA Sweden works vertical and the employees are not scared to disagree using their superiors. The management style is informal, for example they solve each another with their first name. The management style is also based mostly a whole lot on delegations. In the meantime, IKEA Sweden comes with an open-door insurance plan, every worker is pleasant to directly go and talk with their superiors if there are some ideas on the mind. In the end, the atmosphere throughout the store managers in Sweden is quite wide open and friendly and the employees all appears to be comfortable to speak and make jokes with their boss. This kind of management style and the working environment is vital in IKEA's culture (Pan, 2005).

As mentioned before, the Chinese language culture is susceptible to more connotations, and Chinese prefer expressing their own sentiment and idea in the puritanical way.

The unique individuals of Chinese culture lead the original Chinese corporate and business culture tending to emphasize the partnership and respect their seniors (Pan, 2005)

The traditional Chinese corporate culture will point out seniority and relationships more than responsibility and accountability which is compare with the Traditional western focus on personal accountability and shown merit and capacity (Chen, Wang & Chu, 2011).

The ideals of caution make the store professionals in China going for a long time to produce a decision and unwilling to help make the risky decision. What's more, if the store professionals in China under this conservative management style, the employees in IKEA China, who most straight people connective with customers, would not create the new ideas and express the useful information for their supervisors.

In another hands, due to the rapid economic development in China in the recent years, the worthiness of "time is money" is deeply caved into China business culture, in particular in the residents who moving into big metropolitan areas in China. Hence, enough time is also as an additional more environment factor to manage in majorities of companies in China, and it is employed completely, budgeted properly and really should not be misused. However, this is not really how IKEA works when they making their decisions, actually IKEA allows the mistake to be produced in the working, and something that would cost time (Miller, 2010).

In order to ensure that important beliefs are propagate throughout the whole organization, even out among the customers, IKEA has carried out team-building activities throughout the whole store in IKEA China.

To stay away from the store professionals unwilling to use risk in general would do in Chinese language companies, IKEA supply the inside in-house or oversea training to the store managers and the general employees in IKEA China, with a view to improve the management understanding the values of IKEA and every member in IKEA make their points. After putting lots of the work in cultivating the available and free working environment, currently, IKEA China is well organized about how to look after the new hires. When a new worker step in to the companies, she or he must take the short-term or median terms of orientation training, plus they would be trained of the ideals of "IKEA way" (Miller, 2010).

Meanwhile, with prepared to maintain consistence with the human orientated culture, IKEA set up the gross annual outing, the big kick-off people when IKEA catalogs introduction and sport activities once in a while for the complete stores in China, which helps to create the happy working environment for everybody in IKEA. Through accumulating this internal company culture, it is helpful for the store managers for taking their own obligations and start the ground breaking ideas in the management. Meanwhile, it is actually improve the employees' sense of belonging of "IKEA" and the staff feel more casual expressing the own ideas and advice to their boss. In IKEA China, the employees are also come up with the difference opinions on some essential and valuable ideas, which are useful for running the business (Miller, 2010).

Based on the putting into action effective cultural management strategies in China, IKEA overcome the obstacles of western and Chinese culture and significant benefits the diverse ethnicities in China.

Conclusion

The above evaluation with regard to cross-cultural management shows that there are highly distinguished distinctions in the behaviour and habit of professionals and employees from different countries/regions which did the trick in the multinational companies or global organizations. In this respect, the cross nationwide companies and organizations shall make the great efforts to comprehend and document ethnic dissimilarities when they step into a new situation, including the deeply understand the people's characteristic, their ways of things, lifestyle, notion etc. From the case of IKEA's business operation in China market, known that the marketing communications, particularly along the way of integration the dissimilar companies is an efficient approach in the cross-cultural management. In this respect, the management of the multinational companies shall be clearly awareness of quite of the communication. Effective marketing communications are able to set up a friendly knowledge of the difference principles and beliefs of men and women in the diverse culture (Dietz, Orr & Xing, 2008).

In the end, the professionals shall build up the strategy and evidently objective for to articulate the neighborhood culture, like the specific responsibilities and roles of employees in each level.

Meanwhile, the multinational companies must acknowledge of the advantages and cons of the cultural difference in the business activities, establishing the best cross-cultural management, and build up the competitive corners in the international market.

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