Market Entry Strategies Case Study

IKEA in Japan: The Market Re-entry Strategies

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Abstract:
In April 2006, IKEA, the world's largest furniture retailer, forayed into Japan by opening its second-largest store outside Sweden. The opening of the store marked the re-entry of IKEA into the Japanese market after an unsuccessful 12 years stint between 1974 and 1986. Although the company has planned to 'act local' by customizing its offerings according to Japanese preferences, it still expects to face several challenges from the Japanese customers who are known to be inconsistent and unpredictable, and have forced many a foreign retailer to exit from Japan.

Pedagogical Objectives:

• To discuss the need for global companies to understand consumer needs and preferences in each of their markets and adapt their offerings accordingly
• To understand the dynamics of the Japanese retail and home improvement market
• To analyse the reasons behind IKEA's failure in Japan in its first entry (1974-1986) and the factors that encouraged it to re-enter the Japanese market with the ensuing challenges
• To debate whether IKEA, which is known for its standard offerings across the globe at the lowest price, would be able to win fastidious Japanese customers through customized offerings.

Keywords : Japanese retail market; Japanese home improvement market; Consumer behavior in Japan; Foreign retailers in Japan; Japanese furniture retailers; Japanese real estate market; IKEA as a cult brand; Low price strategies of IKEA; IKEA's growth strategies in Japan; Market Entry Strategies Case Study; Product mix; Product line; ‘One-size fits all’, Marketing Management; Marketing Mix; Market Segmentation; Product Life Cycle; New Product Development; Consumer Behavior; Marketing Case Studies; MBA; Marketing Course for MBA Marketing Course Case Map; Course Case Map; Case Map

Contents : 
Japan’s Economic Growth and the Home Improvement Market
Business Cycle and Unemployment in Japan
Global Commercial Real Estate Market
Global Office Markets
IKEA Locations
How IKEA Creates the Low Price
IKEA’s Initial Foray into Japan: The Strategic Missteps
IKEA’s Re-entry into Japan:AStrategy Makeover?