Ikea in Russia - Case Study

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INTERNATIONAL MARKETING

FINAL ASSIGNMENT

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FLORENT FROIDEVAL                                                    MR

ISEG GROUP 1B                           INTERNATIONAL SCHOOL OF MANAGEMENT

IKEA IN RUSSIA

Presentation of the group IKEA

IKEA is a Swedish-born group specializing in the global market Ammeublement kit. The entity was created in 1943 and is now present in 27 countries worldwide with more than 300 stores.

IKEA distributes its products primarily in Europe with over 200 stores on the old continent but also continues its international expansion with 51 stores throughout the Americas, 23 in Asia and 5 in Oceania.

The company known today a very significant growth, with net affairse around 30 billion euros, it has tripled in the space of a few years. IKEA also hires 147,000 employees and offers its customers a catalog of over 9500 products.

The main target of the Swedish giant is the developed countries where the purchasing power of employees is high. It may also be noted that the company sets up more and more in developing countries which are synonymous with true growth driver for years to come (we may take as an example Brazil and India).

The Russian market

Russia represents a challenge for IKEA for its implentation. Indeed it is a more complex market where many external factors are taken into consideration.

Regarding the activities of the Swedish group in Russia, one must first know that the company now has 12 stores, including three in the capital Moscow. In the space of 15 years IKEA has rapidly established on Russian soil. This external growth is mainly due to the many sources of opportunities of the market. Straddling europe and asia, russia is now the largest country in the world. With nearly 150 million people for an average income of $ 475 per month per capita, the country today represents a real source of opporutnité for group activities.

Nevertheless, many factors proper to the Russian environment are to be considered by the brand. Among these, we can put forward the particular economic situation of the country hit by the high international fora, there is also a presence of corruption on all activities of the territory but also the cost of the life in Russia knows a slight inflation in recent years.

The company also faces other problems such as the presence of local competitors in the territory, but also the morphological criteria of the Russian population that currently requires changes in some furniture productions.