logo image

Global Marketing

Any successful business has to reduce costs if it wants to boost profits and succeed. IKEA is a firm which reduces production costs using the global strategy, through using low cost resources in specific countries. The company locates cheaper sources of raw materials and establishes its manufacturing firms in these areas (Hollensen 2007: 396-397). It also uses cheaper labor through establishing its labor intensive activities in countries where low cost labor is available, such as Asia. In addition to this, the company uses simple distribution channels which are relatively cheaper, with very few middlemen.

Centralization and control When undertaking the global strategy, it is important to have control over the process, and this is done to prevent the contractors from flouting the policy of the company. An example can be given of Nike, which subcontracted its activities to Asian countries. Due to allegations of mistreatment of workers in the Chinese factories, Nike lost some goodwill from customers (Bill 1998). IKEA achieves this control through centralizing development and research activities to its headquarters in Sweden.

This provides a centralized decision making environment and allows a central authority to monitor the overall performance of the company (Rugman and D’Cruz 2003: 12-13). Conclusion and recommendation.

Need essay sample on "Global Marketing"? We will write a custom essay sample specifically for you for only $13.90/page

IKEA has been seen to have achieved success through the various strategies that it uses in its operations. It is important for multinationals to take advantage of strengths of different countries and use them to achieve success. It is also very important to maintain control of the overall running of the company, in order to be able to evaluate performance from a central authority.

Firms should borrow the favorable characteristics of IKEA which work for them in order to be as successful.

Bibliography

Bill, S. (1998). “Taking a look inside Nike’s factories” Retrieved on December 12, 2008 from <http://www. pathfinder. com/time/magazine>. Hollensen, S. (2007). Global Marketing: A Decision-Oriented Approach. New York: Financial Times Prentice Hall. Rosenhauer, S. (2008) . “Profit is a Wonderful Word”: IKEA’s Strategy Behind the Profit Sweden: GRIN Verlag. Rugman, A. M. , D’Cruz, J. R. (2003). Multinationals As Flagship Firms: Regional Business Networks. London: Oxford University Press.

Read full document

Can’t wait to take that assignment burden offyour shoulders?

Let us know what it is and we will show you how it can be done!
×
Sorry, but copying text is forbidden on this website. If you need this or any other sample, please register
Signup & Access Essays

Already on Businessays? Login here

No, thanks. I prefer suffering on my own
Sorry, but copying text is forbidden on this website. If you need this or any other sample register now and get a free access to all papers, carefully proofread and edited by our experts.
Sign in / Sign up
No, thanks. I prefer suffering on my own
Not quite the topic you need?
We would be happy to write it
Join and witness the magic
Service Open At All Times
|
Complete Buyer Protection
|
Plagiarism-Free Writing

Emily from Businessays

Hi there, would you like to get such a paper? How about receiving a customized one? Check it out https://goo.gl/chNgQy