Question one
IKEA, like any other company, has faced a lot of challenges during its global expansions. Many scandals have hit IKEA, but the company is showing no signs of bowing to such scandals. Instead, the company is using the problems to identify solutions and move ahead. One of the most discussed scandals that have ever faced the company was that of the horse meat. IKEA was accused of using horse meat in its meatballs. The scandal almost tarnished the image of the company, but it luckily managed to overcome the challenges, it even made the company popular amongst the Americans. Apart from the horse meat scandal, IKEA have found itself working on a very stiff economy due to the global recession that has been evident of late.
However, IKEA has recorded a number of successes across the whole world covering almost 41 countries. As per 2013, IKEA had a record of almost 150,000 employees. Considering the humble beginning, it is worth noting that IKEA is destined to a better place in the world market. The company’s great achievement though did not come from a silver platter. IKEA is facing a lot of completion from other furniture companies. This competition has seen the company to offer services at the lower services. The fact that the suppliers boycotted supplying the company due to the low prices is an indicator of the effects of competition.
Question two
IKEA entered Russia in 2000. The company viewed Russia as the next big market without realizing the eminent challenges that lay before them. Russia has got a complex political system that does not look friendly at some times. Amongst the many micro-political risks that IKEA faced in Russia was corruption. During its expansion to Russia, IKEA was ranked as the most corrupt company. This was after the incidences of bribing by the company officials. The development led to the firing of some of the company top officials. Another micro political risk that IKEA faced in Russia was the location of the company. IKEA’s efforts of locating the most favorable place to locate the business were thwarted by the government officials. An example was when the company’s location was termed as very near to the gas pipeline.
These problems faced made the IKEA officials to reconsider its venturing initiatives in Russia. Apart from the corruption cases that the company faced in Russia, the government of Russia also never gave the company a supporting hand that has been seen among some countries. IKEA was, however, not reluctant to let its good image rubbished by the Russian incident. Firing the officials who involved in the bribery was the first step to show that the company was not a corruption hub. The perseverance that the company put forward was also another way the company mitigated the risk. The best way, however, that IKEA could have used to mitigate the political risks that it. An outstanding pre-emptive approach IKEA could have used was to learn the political system of Russia and under the challenges that they might have faced. Through learning the political structure of China, the possibilities of getting into problems could have been minimal.However, these challenges did not stop IKEA from moving forward. The company is destined to conquering the Russian market even at the most harsh conditions.
Question four
IKEA is governed with three basic foundations which are vision, core value and band. The leadership skill that the company has put forward has seen it mitigate most of the challenges and even stand strong on the economic ground. By standing by the visions that its founder, Kampard drafted many years ago has made the company to maintain its brand and culture. The employees at the company are also included in most of the decisions made and hence making IKEA to have a strong belief from its worker. The simple rules that the company uses in its day to day operations has made the work very efficient something the workers cherish. Above all, IKEA has been a company that has stood by its customers to save money irrespective of their social status, tis has made the face of the company familiar with many customers. IKEA’s favorable HR approaches have made the company have an international recognition.
The core vision is to maintain its culture irrespective of the cultures of the country it is operating (Baraldi 101). IKEA’s trainers do train their workers the same and thus maintaining their culture and providing high-quality products. The company is also said to be open to only the employees who are willing to spread the company’s gospel. The workers are thus required to abide by the culture of the company. The success of IKEA is said to be revolving around the fact that it has maintained its culture, however, with the globalization; the company is facing numerous challenges. The different culture the company comes around complicates the issues. Leadership is another challenge. IKEA should thus revise its leadership strategies so as to conquer the world market. Even if the company is reluctant to changes, room for changes should be left. The good leadership skills that IKEA has put forward can thus be concluded as the power behind the rolling wheel of IKEA.
Works cited
Baraldi, E. Strategy in Industrial Networks: EXPERIENCES FROM IKEA. California Management Review, 50.4(2008), 99-126.
Deniz Caglar, Marco Kesteloo and Art Kleiner (May 7, 2011). How Ikea Resembles Its Growth Strategy. Accessed on November 4, 2014. <<http://www.strategy-business.com/article/00111?pg=all>>
Fahey, Alison. "Ikea Building A Loyal Following With Style, Price." Advertising Age 62.4 (1991): 23. Academic Search Premier. Web. 4 Nov. 2014.
Irene Chun (2014) Ikea Gives Us an Adjustable Standing Desk We Can Actually Afford. Accessed on November 4, 2014. <<http://www.wired.com/2014/11/ikea-bekant-desk/>>
