The biggest difficulty for IKEA when entering China was the legal systems and trade barriers. Initially Ikea’s presence in the Chinese market was purely procurement, with most of its purchases of materials from other store deriving from China. In 1998 Ikea opened its first retail store in Shanghai. The store was opened as part of a joint venture,as policies at the time did not allow for foreign companies to build wholly owned stores. Entering into the Chinese market came with many uncertainties, and the entering into the joint venture was less risky than if they had entered on their own.
After China joined the WTO, foreign firms could build wholly owned stores. IKEA then changed its entry mode by purchasing the remaining shares from their partners and began building wholly owned stores.
The normal way IKEA used to advertise is the “Catalog”. If IKEA wants to get a good effect in China, IKEA should not only use the “catalog”. Because of the number population in China IKEA will find out the “Catalog” may spend a lot of money in the future. Because there are still a little stores in China, IKEA still a new name in China. If IKEA wants to open more stores in new city, IKEA should take the advertisement to the city before the store opened.
2.The company culture
Even IKEA already entered China about 11 years, Chinese customers still do not understand the model and company culture of IKEA. In the shadow of the high price, the concept which wants to improve the quality of life seems like an empty talk. So, the…