Week3 DQ1

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Week3 DQ1

Introduction

There are few companies which manage to enter a foreign market establish themselves and take over the market from the competitors . The major challenges which face such companies are learning the market trends and developing goodwill which will make consumers use its products as opposed to competitors ' products . There are also unique challenges which face individual markets , such as the macroeconomic environment , which only local firms have the ability to adapt to in a relatively short time . In

spite of these challenges , IKEA a company with origins in Sweden has managed to establish a global presence . It uses a global sourcing approach where it takes advantage of the different strengths of different markets when undertaking its operations

According to Rosenhauer (2008 : 2-3 , IKEA was established in 1943 and is the largest furniture retailer in the world . It operates in more than twenty five countries and has over one million customers who visit it each year . It is one of the most successful multinationals in the world . This aims at analyzing the factors which have led to the success of this firm using the global sourcing strategy , and the characteristics that other multinationals can borrow from it in to succeed

Global sourcing

This is a strategy which exploits the global efficiencies when producing and selling products . There are several characteristics that multinationals can learn from IKEA in relation to the global strategy These are briefly explained below

Subcontracting strategy

Subcontracting is...