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Following 40 years of success in Europe, IKEA launched a global strategy that would expand the company’s distinctive line of assemble-it-yourself furniture into new products and markets. Why do you think this strategy did not work as well in North America as it did in Europe? IKEA’s international product strategy, that extends the same products and the same message worldwide, was initially applied when the company expanded into the sophisticated high-income North American market. At first, IKEA followed its standard pattern. It identified principal markets with volume potential, acquired cheap land on the periphery of big cities, utilised mass marketing to advertise its unique message, that emphasised it’s ‘Swedishness’, focused on range and price and established a site from which to launch and develop the organisation. This unorthodox practice goes against traditional international retailing rules. However it had proven successful for IKEA’s European operations, as customs and standards were similar enough to embrace the standard approach. A successful marketing mix in one region may not be successful in another as different customs, culture or competition effect the environment. As a result, IKEA’s initial U.S. business ran into a number of problems as culturally specific requirements of home furnishings in America considerably differ to European markets - especially considering the size and function of certain furniture. The company had not adapted its European product lines to national tastes and preferences of the U.S. market. As a production orientated company, IKEA’s Swedish management and design group decided what it sold and then presented it to the world public (with little research into what the public wants). This technique helped maintain IKEA’s vision that the company should sell a product range, which is of good value and typically ‘Swedish’, all over the world. As a result, the furniture was not suited to US standards. IKEA’s outlets sold: - products that were all measured in centimetres. - sitting room furniture that was much softer than American sofas - curtains that did not reach the ground as ceilings in the U.S.
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