IKEA Korea Ltd.: Renewing Success in a Turbulent Environment
Inter IKEA Systems B.V. (IKEA) entered Korea at a relatively late stage of its global expansion and encountered an overwhelmingly positive customer response, which emboldened it to open several additional stores at a relatively fast pace. However, IKEA encountered much stronger headwinds after the COVID-19 pandemic hit Korea. It had to shift to online sales channels, mitigate customer dissatisfaction, face aggressive Korean competitors, accommodate a major slump in furniture demand, and address employee dissatisfaction and strong demands from its labour union. What could the company do to address these challenges and renew its success?
Collection: Ivey Business School (Canada)
Ref: IVEY-W33909-E
Format: PDF
Number of pages: 13
Publication Date: Sep 27, 2023
Language: English
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Description
Inter IKEA Systems B.V. (IKEA) entered Korea at a relatively late stage of its global expansion and encountered an overwhelmingly positive customer response, which emboldened it to open several additional stores at a relatively fast pace. However, IKEA encountered much stronger headwinds after the COVID-19 pandemic hit Korea. It had to shift to online sales channels, mitigate customer dissatisfaction, face aggressive Korean competitors, accommodate a major slump in furniture demand, and address employee dissatisfaction and strong demands from its labour union. What could the company do to address these challenges and renew its success?
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Year: 2022
Geographic Setting: South Korea
Industry Setting: Retail Trade
Learning Objective
This case may be taught in Strategy, strategy, and Asian business courses at the undergraduate, graduate, and master of business administration levels. After working through the case and assignment questions, students will be able to do the following:Understand the pros and cons of different types of Strategy strategies when entering foreign markets. Understand the liability of foreignness multinational firms experience when entering distant countries and how it may be effectively mitigated. Understand the challenging and dynamic competitive environment in a major East Asian market.
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