IKEAinChinaCheapforChinese：宜家在中国廉价的中国.pptVIP

2008-06-02 LYDIA LIU CCS 2008 SPRING 2008-06-02 CCS 2008 SPRING ?REBRO LYDIA LIU IKEA in China: Cheap for Chinese? Business idea: IKEA offers a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible can afford them Low prices are the cornerstone of the IKEA vision, business idea and concept . Source: IKEA group′s website (/?ID=5) IKEA stores in China Beijing 2006 42,000 Chengdu 2006 26,000 Guangzhou 2005 16,000 Shanghai 2003 32,000 (1998, 8000) Shenzhen 2008 34,000 Source: IKEA group′s website (/?ID=96 ) Problem Ikea became a luxury brand for Chinese when IKEA entered into the Chinese market, which was far from what IKEA stands for and their slogan “affordable solutions for better living”. IKEA’s target group is “middle class” not low income young people. IKEA furniture is becoming cheaper and cheaper in China, but the mass in China still don’t have the purchasing power to consume IKEA products. Challenges An important challenge for IKEA is the need to understand the different environments the company needs to operate in. Understanding different cultural, economic, and political environments becomes necessary for success. Price- Cheap for Chinese? Income RMB of Urban Households Hofstede’s cultural dimensions The Chinese Culture Confucianism and Taoism. China is a culture with high power distance, there is a large difference between people’s social status, status symbols are important . Being a collectivistic culture, family is very important in China. Long-term orientation. This indicates that consumers are very concerned with the price of products, because they want to save money . DIY in China IKEA’s main argument for the flat packaging and DIY is that they can provide low prices for the customers. DIY did no