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BAMMC-THESIS BY: ALEXANDRA STOLBA Supervisor: Henrik Christensen
Aarhus School of Business Aarhus University 2009
BA thesis BA-MMC
Table of Contents
Table of Contents ..........................................................................1 1. Introduction ................................................................................3
1.1 Background ...................................................................................................................................... 3 1.2 Thesis statement ............................................................................................................................. 3 1.3 Delimitations..................................................................................................................................... 3 1.4 Method .............................................................................................................................................. 4 1.4.1 Choice of theory ............................................................................................................................ 4
2. Discussion of theory ..................................................................5
2.1 Reasons for internationalization ................................................................................................... 5 2.2 The Uppsala internationalization process model ....................................................................... 6 2.3 The concept of psychic distance ................................................................................................. 10 2.4 Srandardization vs. adaptation ................................................................................................... 11
3. Background............................................................................. 14
3.1 IKEA background information ..................................................................................................... 14 3.2 The Japanese Market background information ........................................................................ 15 3.2.1 The Japanese economy and market situation in the period from the 1970’s till 1990’s. . 15 3.2.2 The Japanese economy and market situation in the period from 1990’s till the time of second entry .......................................................................................................................................... 16 3.2.3 Japanese Home Furnishing sector and lifestyle preferences .............................................. 16 3.3 Ikea on the Japanese market ...................................................................................................... 17
BA thesis BA-MMC
4. Analysis .................................................................................. 18
4.1 Internationalization of Ikea on the Japanese market ............................................................... 18 4.1.1 First round .................................................................................................................................... 18 4.1.2 Second round .............................................................................................................................. 20 4.2 Degree of adaptation .................................................................................................................... 21 4.2.1 Product ......................................................................................................................................... 23 4.2.2 Pricing ........................................................................................................................................... 23 4.2.3 Place/distribution ......................................................................................................................... 24 4.2.4 Promotion/marketing communication ...................................................................................... 25
5. Conclusion .............................................................................. 26 6. Bibliography ............................................................................ 27
Introduction 1.BA thesis BA-MMC 15. In 1986 Ikea had to withdraw their store out of Japan because of difficulties and then. last of which was opened in 2009. there are six Ikea stores in Japan. Although there are 279 of Ikea stores in 36 countries. Nowadays. 1. the rest being managed by franchisees in 16 countries. it will be studied why Ikea chose to internationalize in a culturally distant country as Japan at the given time as well as analyzed which cultural and strategic factors were behind Ikea’s failure and success on the Japanese market. whereas primary data is not present. due to the difficulty in accessing the data since Ikea has expanded to Japan for the first time for a long time 3 . Ikea is the major retail company that is present in 36 countries around the world. During Ikea’s expansion on the international market Japan was the first country in Asia that Ikea considered to enter in 1970’s.2 Thesis statement The objective of the thesis is to understand factors in Ikea’s internationalization strategy in Japan that influenced the failure on the Japanese market in the first round but success in the second round. In this thesis. they decided to reenter the Japanese market for one more time. Having entered only five European countries by the time Ikea decided to internationalize in Japan. Ikea group owns 247 Ikea stores in 24 countries.3 Delimitations The thesis makes use only of secondary data.2009 1. At present. Ikea’s international experience was rather poor. lifestyle and behavior made Ikea face the failure. The differences between culture. twenty years later.04. Japan is different from other European countries that Ikea was already present in. 1.1 Background Ikea is furniture retail company established in 1943 in Sweden. so it was difficult to pursue success in the same way.
Moreover. K. which is collected for a particular research purpose. The information derives mainly from articles which describe Ikea’s new entry on the market and only refer to the past events. In order to find out why Ikea internationalized on the Japanese market. (2006). executives continually changed.4. p. (12th edition).2009 ago. It is fully acknowledged that this fact can result in a somewhat deficient picture of Ikea’s strategy in the 1970’s. which made it almost impossible for me. no articles which would treat the whole set of strategies employed at that time were available.BA thesis BA-MMC 15. Customer interviews. For the same reason analysis of Ikea company structure and internal communication is not included. which could have been a useful tool for analyzing effectiveness of Ikea’s new strategy in Japan. are not used in this thesis for the reason of great distance between Japan and Denmark and language barriers. which made it very difficult to find a way of contacting them. yet the key data relevant for our analysis could still be retrieved from the secondary sources to form a reliable basis for our research. Marketing Management. P. Even though secondary data does not possess the same advantages as primary data. 104. since the thesis focuses on external communication. proving a suitable method to solve a specific research problem. 4 .1 The information retrieved by and large form various articles was carefully collated and subjected to critical scrutiny in order to increase its consistence and reliability.4 Method In the thesis secondary data is used for analysis. Yet.04. & Keller. the choice had been placed on the following theories: 1 Kotler. In depth economical analysis of the Japanese market is left out of discussion being considered irrelevant. United States of America: Pearson Prentice Hall. 1. as a student. since Ikea’s first expansion on the Japanese market took place more then thirty years ago. literature relevant for the topic had been reviewed. it is less time and money consuming. 1. and what factors made Ikea to review the strategy and succeed in the second round. what factors influenced the choice of marketing strategy in the fist round and lead to failure.1 Choice of theory As this thesis is about internationalization process. to accomplish.
foreign markets give the retailer an opportunity to grow. 2. Furthermore.1 Reasons for internationalization The retailer’s decision to internationalise is in most cases driven by the sales growth. Moreover.BA thesis BA-MMC 15. The Uppsala internationalization process model explains the impact of knowledge and learning to the firm’s approach to foreign markets. Standardization and adaptation approaches are used to elaborate on the strategies used on the Japanese market. it is used to analyze why and how Ikea has changed the strategy when expanding on the Japanese market for the second time and the consequences of that. according to Kotler. when it needs a larger customer base to achieve 5 . it is much easier to grow sales by increasing the store network than by getting more sales out of existing stores. 2. 4. 2. The concept of psychic distance is implemented to gain understanding of factors that hampered the successful internalization and explain how the perception of the cultural differences influenced choice of a marketing strategy.2009 1.04. However. Criticism of the theory is taken into consideration when conducting the analysis. and if the domestic market is not large enough any more. Discussion of theory In this section theories that are considered relevant for the study are presented and discussed. and explain how the degree of adaptation contributed to failure in the first round and success in the second. Sales growth is a measure of success and if the desired growth could be achieved on the domestic market. The international arena gets attractive when the company discovers higher profit opportunities than on the domestic market. It has been used to understand why Ikea decided to internationalize on the Japanese market in the first place and how the knowledge affected the entry mode and strategy choice. 3. advantages and disadvantages of both strategies are discussed. most companies would prefer to remain domestic. Geert Hofstede’s cultural dimensions have been used to define cultural differences between countries of interest.
The choice of the country and the way to approach it require knowledge of foreign markets. There are two assumptions that the model is based on: first.2 The Uppsala internationalization process model Once a firm has reached a decision to internationalize. that are low in market risk. 669. Ibid. Journal of international business studies.2009 economies of scale. the lack of knowledge about foreign markets is a major obstacle to the development of international organizations. firms want to increase their long term profit at one site. J. and that the necessary knowledge can be acquired mainly through operations abroad. a company prefers to enter countries that rank high on market attractiveness.04.1. J. p. 674 4 Johanson.2 In general. p. and is employed in this thesis while analyzing Ikea’s expansion on the Japanese market.. The Uppsala internationalization model was developed by Johanson and Vahlne in 1977 and is based on Johanson and Wiedersheim-Paul study of internationalization of four Swedish firms.. p. p.4 It focuses on four aspects that firms should face while going abroad: market knowledge and commitment. 23. vol..E. and in which it possesses competitive advantage. when the company wants to reduce its dependence on a particular market or gives an opportunity to counterattack the competitors that attack the company on its domestic market on their home markets.3 2.BA thesis BA-MMC 15. Ibid. (1977) The internationalization process of the firm – a model of knowledge development and increasing foreign market commitments. & Vahlne. The Uppsala internationalization model reflects on how the knowledge development influences the market choice and international marketing activities. but at the other site want to keep risk-taking at a low level. 8.27 3 2 6 . the next step would be to choose a strategy. second. The internationalization strategy is a first step to success or failure. and commitment decisions and current activities which are divided into stage and change aspects that interact with each other in a cycle. no.
“The more specialized the resources are to the specific market the greater is the degree of commitment.2009 The two state aspects market knowledge and commitment decisions are resources committed to foreign markets. 27 Ibid. and the degree of commitment on the other hand.. It must be gained successively during the operations in the country. The amount of resources committed is easy to grasp. p. Market commitment is measured as the amount of resources committed to foreign markets on the one hand.. organization. and other areas. including investment in marketing. personnel. General knowledge concerns.”5 The degree of commitment is related to the difficulty of finding an alternative use for the resources and transferring them to it.04.”6 Market knowledge is classified into two types. using this concept in a broad sense. 27 7 . Experiential knowledge can only be learned by personal experience and provides the framework for perceiving and formulating opportunities. for it cannot be so easily acquired as objective knowledge. Johanson and Vahlne view the experiential knowledge as critical.BA thesis BA-MMC 15. Another way to classify knowledge is to make a distinction between general knowledge and market-specific knowledge. marketing 5 6 Ibid. Objective knowledge can be taught and on its basis it is only possible to formulate theoretical opportunities. in the present context. p. “It is close to the size of the investment in the market.
on similarities in the production process. On the other hand. The second change aspect is the decision to commit resources to foreign operations. or the less interaction is required between firm and its market environment. for the performance of marketing activities. Marketing activities are a good illustration of this.7 The two change aspects are current business activities and commitment decisions.BA thesis BA-MMC 15. cultural patterns. these decisions are made because there are problems or opportunities in the 7 8 Ibid.. irrespective of their geographical location. the more market-oriented. characteristics of the individual customer firms and their personnel. The longer the lag. depending. There is a lag between current activities and the consequences of these activities. first and foremost.. the more difficult it is to rely on hired personnel or external advice because they lack the necessary firm experience. the authors of the model make a distinction between firm experience and market experience. While general knowledge can be transferred from one country to another. the higher is the commitment of the firm.04. Market experience can be also obtained by hiring people with this experience or to make an appeal to external advisors. It has been argued that the market-specific knowledge relates to characteristics of the specific national markets such as its business climate. market-specific knowledge can be achieved mainly through experience in the market. structure of the market system. the easier it will be to substitute hired personnel or advice for current activities. for example. To clarify the roles of these alternative ways of integrating experience into the firm in the internationalization process. and. Persons working on the boundary between the firm and its market must be able to interpret information from inside the firm and from the market. The more the activities are production-oriented. According to Johanson and Vahlne. 29 8 . and in this area it is difficult to substitute personnel or advice from outside for current activities. They are of more variable nature then the state aspects. p. in the case of industrial customers. p.2009 methods and common characteristics of certain types of customers. both kinds of experience are required. both of which are essential.”8 The authors conclude that. “The interpretation of one kind of information is possible only for one who has experience in the other part. Current business activities are all of the activities undertaken by a firm at a certain moment. Current activities are also the prime source of experience. 28 Ibid.
The probability that the firm will be offered opportunities from outside is dependent on the scale and type of operations it is performing. The better the knowledge about the market the more valuable are the resources and the stronger is the commitment to the market. stage two is export via independent representatives. which leads to increasing market commitment by raising the maximum tolerable risk level. There are 4 stages of entering an international market in the mode of operation. Global marketing: A market responsive approach. that is. in two dimensions.BA thesis BA-MMC 15.9 There are two kinds of commitment decisions: scale-increasing commitment decisions and uncertainty reducing decisions. which is emphasised in the market knowledge aspect of the model. Scale-increasing commitments are influenced by factors such as competitive or political stabilization of the market. 29 11 Hollensen. One dimension is mode of operation which illustrates the market commitment. (2nd edition). p. 29 Johanson and Vahlne.10 Another aspect of the model.. that way increasing market commitment by declining uncertainty about the market.04. Even though the empirical research confirms that commitment and experience are important factors explaining international business behaviour. Problems and opportunities are mostly discovered by parts of the organization working in the market (marketing personnel. third stage is establishment of a foreign sales subsidiary. p.cit. Uncertainty-reducing commitment can be occasioned by decrease of maximum tolerable risk level or increase of existing risk in the market. p. op. But opportunities can also be seen by individuals in organizations with which the firm is interacting..11 International activities require knowledge when entering new markets. on its commitment to the market. 48. which means that the firm can function peacefully and obtain market knowledge through experience. (2001). 10 9 . First stage is no regular exports activities. and increase of total returns of the firm or more aggressive approach towards risk. and the other is market dimension which illustrates the geographic diversification. op. these individuals may propose alternative solutions to the firm in the form of offers and demand. is that firms develop their activities abroad over time in an incremental fashion. and fourth stage is foreign production and sales subsidiary. The successive stages represent higher degrees of market commitment. based on their knowledge development. some criticism concerning the model has been 9 Johanson and Vahlne.cit. the stage model.2009 market. S. salesmen).
”15 Seen from another perspective.12 Studies have shown that the model is not valid for service industries. however. According to the model. which means that the distance exists in the minds of individuals. and services and information offered by international consulting firms reduce the level of uncertainty by providing knowledge about foreign markets. However. Hence. this criticism will be seen at as not relevant in this particular case. however. p. 48 Ibid.. cultural distances among countries have an influence on the individual’s perception. there has been some criticism concerning among other things the measurement of the psychic distance. I. because the level of uncertainty is reduced by the fact that markets are becoming more homogenous. Psychic distance is defined in terms of factors such as differences in language. 10 .14 The higher is the level of psychic distance. the psychic distance may not capture the influence of cultural differences on firm’s internationalization process. which disturb the flow of information between the firm and the market.04. Given that Ikea is not a service but a retailer only including subordinate services. M. This does not exclude. Another criticism of the model is based on studies claiming that firms seem lately to skip the early stages of the establishment chain entering psychically distant markets at an early stage and to “leap-frog some intermediate entry modes in order to move away from the sequentialist pattern and more directly to some kind of foreign investment”.BA thesis BA-MMC 15. that the firm’s international activities develop in the incremental fashion based on their knowledge development. The nature of the international firm. p. As a result. and political systems. because the growing reinforcement of foreign commitments implied by the process model is absent.2009 expressed. 144.13 As Hollensen explains. p. psychic distance has decreased. the more knowledge is required in order to reduce the uncertainty level. p. Copenhagen: Reproset. this is possible. & Forsgren. (1997). but means that the process of knowledge development is going faster. with firms expanding first into markets which are psychically close and most easy to understand and into more distant markets as their knowledge develop..3 The concept of psychic distance The internationalization process is also explained by the concept of psychic distance. 2. The greater the cultural distance of the 12 13 Ibid. “the concept does not refer to an objective concept or measurement of a cultural distance which may influence corporate behavior.. 49 15 Bjorkman. psychic distance is caused by individual decision-makers perceived uncertainty.. culture. 51 14 Ibid.
144 18 Ibid.18 This critic is considered when conducting an analysis. the less knowledge about the new environment is likely to be available and the more difficult it is to understand and learn about the foreign country on the individual level as well. Bjorkman and Forsgren argue. & Bradley. the greater is the psychic distance. it may be problematic to use the country as a unit of analysis when dealing with psychic distance. Op. C. This conclusion will be used when dealing with the psychic distance concept in this thesis. cultural distance. They do not explain cultural differences in general.BA thesis BA-MMC 15. even though they cannot explain psychic distance and consumer behavior completely. p. So. they still do highlight some preferences and can be useful in an analysis of cultural differences. (2006). and thus psychic distance. intraorganizational relationships across nations. p. according to Sousa and Bradley analysis.16 According to Sousa and Bradley. F. What really matters is the gap between actual and expected behavior. Hofstede’s cultural dimensions. can be measured using Hofstede’s study on cultural differences. masculinity. 144 11 . First of all. there is a positive relationship between cultural and psychic distance: the greater the cultural distance between the home and the foreign market. uncertainty avoidance and long-term orientation.cit. which is the difference between cultures in general and lack of its understanding. individualism.4 Srandardization vs. cross-cultural differences in consumer behavior. for instance. no 1. 2. adaptation 16 Sousa. Cultural Distance and Psychic Distance: Two Peas in a Pod? Journal of international marketing.2009 foreign country to the home country. Vol.14. p. which are power distance.e. cross-cultural differences in intraorganizational relationships and consumer behavior have the same root. for that it assumes that all firms at a given stage of internationalization are influenced by cultural differences in the same direction and by the same intensity. however. This does not justify that multinational companies are not influenced by cultural differences in all aspects of their international behavior as small companies. describe the cultural differences on the intra-organizational level because they explain the cultural differences in these areas in general. thus giving an insight in the culture. The concept has also been criticized in other aspects.17 Still. 53 17 Bjorkman & Forsgren.04. pp 49-70. Thus. Secondly. that Hofstede’s results concern cross-cultural differences in people’s relationship with one another when they act as employees. i.
cit. Global marketing and advertising: Understanding Cultural Paradoxes. homogenization of consumer needs and tastes. op. legal environment. M. Standardizing the marketing program has advantages such as economies of scale in production and distribution. ability to leverage good ideas quickly and efficiently. the company’s organization and management. adapting both the product and the communication to the local market. where the producer adjusts the marketing program to each target country. California: SAGE Publications. (1998). Differences in consumer needs. The degree of adaptation can be influenced by product category.BA thesis BA-MMC 15. The process is described by the model below: 19 20 Kotler & Keller. p. The following theory reflects on the strategy choice and will be used to analyse it in case of Ikea on the Japanese market. differences in brand and product development. However.. wants. it needs to deal with the cultural differences identified on the foreign market and choose a marketing program accordingly. or adapt only one the above mentioned.19 It is said to offer the possibility of building a uniform worldwide corporate image. only few products and brands allow for a fully standardized approach. 27 12 . and usage patterns for products. whereas at the other extreme is an adapted marketing mix. Some changes in product features. consistency in brand image. consumer response to marketing-mix elements.2009 Once a company has decided which markets to enter. competitive environment.04. International companies must decide how much to adapt their marketing strategy to local conditions. marketing institutions and administrative procedures all make it necessary for the company to place the choice between standardized and differentiated marketing strategy. p. channels. lower marketing costs. packaging. for instance. company can engage in dual adaptation. a world brand or global brand with a global image. At the one extreme are companies that use a globally standardized marketing mix worldwide.20 Depending on the situation. pricing or communication are needed in different global markets in order to make sure that the company’s marketing is relevant to consumers in every market.. 678 De Mooij. by psychic and cultural differences. product life cycle and brand positioning or.
transfer prices. The second opportunity is set a market-based price in each country. It can also lead to prices being too high in a poor country and too low in a rich country. dumping charges.04. varying only the language.op. companies have to deal with price escalation.2009 Communication adaptation happens at several levels. “Dumping occurs when a company charges either less than its costs or less than it charges in its home market. where a company would use a standard markup of its costs everywhere. The first one is to set uniform price everywhere. name. where the charge is what each country can afford. The third strategy is to set cost-based prices in each county. 684 13 . it may be charged with dumping. but this strategy might price the company out of the market in country where the costs are high. op. but then profit rates would be different in different countries. The third approach is to develop a global pool of ads.. Setting transfer prices for goods that a company ships to its foreign subsidiaries can also be problematic. but this strategy ignores differences in the actual costs from country to country. If the charges are too high. Because of the cost escalations varying from county to country. There three opportunities. a company has to decide on how to set prices. Media and sales promotion techniques also require international adaptation dependent on the environmental conditions. and colours.21 Pricing is also an important issue. The company can use the same message everywhere. from which each company selects the most appropriate one. If a company charges to low. 682 Kotler & Keller. p.”22 Often government does not allow 21 22 Kotler & Keller .cit. it may end up paying higher tariff duties. p. but adapt the copy to each local market.cit. and grey market. When selling abroad. in order to enter or win the market.BA thesis BA-MMC 15. Other possibility is to use the same theme globally. although it may pay lower income taxes in the foreign country.
we (AC: IKEA) basically copied the concept worldwide from the 1970s until now.d. IKEA can be called one of the largest global furniture retailers. et. & Goteman.com/ms/en_GB/about_ikea/press_room/student_info. About Ikea.ikea... vol.. 3.05.”25 The key IKEA messages all have their roots in the Swedish origin of IKEA and IKEA’s CEO Anders Dahlvig says that apart form the product range.17. The company’s three distinct features are function. For him.”24 Now the vision of IKEA is “To create a better everyday life for many people”. op.al. 3. IKEA’s Swedish values and culture are the factors that contributed to IKEA’s growth on the international market for the reason that Swedish way of doing business is different from the way they do it in many other counties.23 Owning 262 stores in 24 countries and being represented by 296 IKEA stores in 36 countries. Cited from (27. Together we save money. INGKA Holding BV is a parent company for all IKEA Group companies and owns the concept and brand name IKEA. using.. for example. Student info.168/?ID=25 Dahlvig. Background In this section background information relevant for the analysis is presented.04.html 26 Dahlving A. no.04.2009) http://193. 31-37 25 Ikea n. The academy of management executive. A. (2003).1 IKEA background information IKEA is a Swedish company which was founded in 1943 by Ingvar Kamprad. non-traditional materials for furniture such as plastic. We do our part.1. functional home furnishing products at prices do low that as many people as possible will be able to afford them” and market positioning statement: “Your partner in better living. “After that. pp.BA thesis BA-MMC 15. Cited from (08.108. you do yours.. 26 23 24 Ikea group corporate site n. an origin and unique idea is a key to international success. Today Ikea Group is owned by Stichting INGKA Foundation.2009 dumping by forcing a company to set a price close to what is charged by other competitor selling similar products. Kling.2009) http://www.d.42. Business idea is “To offer a wide range of well designed. quality and low price. Ikea CEO Anders Dahlvig on International Growth and Ikea’s Unique corporate culture and brand identity. In the 1950’s IKEA developed its own way of doing things.cit. 14 . K. About the Ikea Group. That strategy made IKEA different from other furniture retailers and in that way developed a competitive advantage. I.
4 percent.6 percent. with monetary policies while higher interest rates sent stock prices into a downward curved. For the same reasons information about the Japanese market in period from 1990’s till the second entry time in 2001 is important. the Japanese economy and market situation overview from 1970’s till 1990’s is considered to be relevant in order to understand what outside factors influenced the decision to enter and pull out. especially land.04.2009 3. In the 1980’s.2.2009) http://www. 3. As a consequence. government considered to tighten the value of asset. Since Ikea entered the Japanese market for the first time in 1974 and pulled out again in 1984.1 The Japanese economy and market situation in the period from the 1970’s till 1990’s.BA thesis BA-MMC 15. Summary of Japan’s economy.asianinfo.2 The Japanese Market background information In this section information about the Japanese market relevant for this thesis will be provided. The percentage of Japanese living in the cities almost doubled between 1950 and 1970. From 1974-1979 economic growth slowed to 3.d. After Second World War Japanese economy grew rapidly from less-developed to developed status and in 1968 with an annual GDP growth of about 10 percent Japan’s economy became the world’s second largest. new equity turned to rise exceedingly.htm 15 .org/asianinfo/japan/proeconomy. the GDP growth slightly increased to 4. stock prices. In 1993 the recession bottomed out. Later in 1985 the value of yen rose increasingly to three times its value in 1971. behind only that of United States. Cited from (01. Tendencies in the Japanese furnishing sector and lifestyle preferences by the time of the second entry are mentioned as well to gain understanding of factors that made Ikea’s new strategy successful. thus increasing demand for services.27 27 Asian info n. but has been recovering slowly since then.05. Corporate investment. In spite of that Japan’s major export industries still remained competitive by cutting costs and increasing efficiency. caused by double-digit inflation and the Middle East oil crisis that reduced private investments.
in turn.2 The Japanese economy and market situation in the period from 1990’s till the time of second entry In the 1990’s. thus lowering the living standard and decreasing spending. The move beyond the usual retail practice of selling only products to stores adding value to customer’s shopping experience by giving innovative ways to solve household problems has become a prominent trend. Later.pdf 16 . once considered unthinkable in Japan due to its traditions of “lifetime employment” for selected workers and strong employee loyalty. which. A demand for higher life quality and varying consumer styles are now met by home furnishing stores presenting their merchandise in coordinated settings. in 1996 Japan tried to restructure the financial sector by introducing the so-called “Big Bang” reform measures. This decline resulted in higher unemployment though layoffs. growing to 3.go.29 In general.2.04. the second 28 Encyclopedia of nations n. Consumers have changed the way they thought of products in households by encouraged to search for home management solutions.2009) http://www. It removed an enormous number of restrictive government regulations and the country moved from being a well-protected economy practically closed to foreign investments to a more open economy. the Asian crisis emerged and was considered as external economic factor of downturn. Japan’s consumer market is witnessing the growing presence of two generations that are pursuing new lifestyles: the first is the “baby boomers” – those born during the late 1940s and who are now approaching retirement years and enjoying high disposable income and time. Cited from ( 05.92 trillion yen in sales and 3. 28 3. Japanese government undertook deflationary measures which triggered a decline in the Japanese economy. The economic decline in the 1990’s which inclined the Japanese government to encourage foreign investment by liberalizing the economy together with pressure from its trading partners and competitors forcing to open the market to foreign competition initiated deregulation reforms. Because of the decline. Japanese consumers are known to value quality in a high degree.com/Asia-andOceania/Japan. in order to keep the inflation level low. has prolonged the economic decline.2. many companies initiated a policy for reducing salaries and wages.nationsencyclopedia.05. To avoid these massive layoffs.Japan.html 29 www.3 Japanese Home Furnishing sector and lifestyle preferences Japan's home furnishings sector has experienced considerable expansion since the 1990’s.d.2009 3.jp/en/reports/market/pdf/2005_50_l.BA thesis BA-MMC 15.860 stores in 2003. in 1997. although there are still some restrictions limiting the flow of imports.jetro.
05. “multinational companies entering Japan often do not spend enough time to understand the nature of the competition here. and we are a much stronger 30 Jetro Japan External Trade Organization n.jp/en/invest/attract/retail/retail2009.thelocal. commented on the failure: “The Japanese market and consumers were not ready for Ikea.2006) ”Size matters as Ikea returns to Japan”.K.jp/en/invest/attract/retail/retail2009. with the assistance of JETRO. These two groups are expected to generate robust demand for lifestyle-related products and services. 34 “IKEA: The Japanese Misadventure and Successful Re-entry”. Cited from ( 09. Ikea.03.05.05. after planning the return strategy for five years.04.go. Ikea is not just selling products. Cited from ( 09. but also s philosophy: this is how things are done in Sweden.31 When entering the new markets.d.thelocal.go.pdf 17 .04. Cited from (10. a principal at management consultants AT Kearney in Tokyo. (16.30 3.04. CEO of Ikea Anders Dahlvig thinks that Ikea will have a better time in Japan the second time around. CEO. Attractive sectors.BA thesis BA-MMC 15.2009) http://www.2009) www. E.05.2009 group is their children – the so-called “second-generation baby boomers” – who are currently establishing households of their own.se/3566/20060416/.05. first Ikea mega-store in Japan opened east of Tokyo. “Japan is much more open.pdf 31 The Local n..se/3566/20060416/..asp?pf_id=256 33 The Local n. Retail.d.d.jetro. Is Ikea for everyone? Cited from (10.3 Ikea on the Japanese market In 1974 as the economic expansion in Asia emerged.icmrindia. but failed to win over Japanese consumers and pulled out in 1986. entered Japan with a local partner. and in 2002 established Ikea Japan K.2009) http://www. Cited from (10. and the so-called unique needs of Japanese consumers”.2005). (28. in 2001 Ikea decided to re-enter Japanese market in part due to deregulation of Japan’s Large-Scale Store Law. Tommy Kullberg.d.com/features_effect. Ikea encountered the failure as a result of rush into Japanese market and Japanese customers being not ready for flat pack living and not convinced of assembling their own furniture.htm 35 Jetro Japan External Trade Organization n. Attractive sectors.35 In April 2006.brandchannel.34 Since Ikea was not successful from the first time it entered Japanese market.org/casestudies/catalogue/Business%20Strategy/IKEAJapanese%20Misadventure%20and%20Successful%20Re-entry.K. which is usually fairly fierce.32 According to David Marra.jetro.2006) ”Size matters as Ikea returns to Japan”.33 Ikea’s Japan K. 32 Lewis.2009) www. http://www. which was highly successful in most of its international markets. putting a Swedish accent on another country’s way of living wasn’t a success in Japan. (16. and Ikea was definitely not ready for Japan at the time”. which made it beneficial for large retailer to enter Japan. Retail.2009) http://www. However.
Analysis In this section Ikea on the Japanese market in round one and two is discussed and analyzed based on theories presented above as a tool to answer the research problem..36 However. he says.htm 37 Lewis. Then.ikea-group. (26. Kullberg says. such as Norway (1963).04.”37 This does not bother Kullberg. Switzerland (1973).2005). Anyone operating on this market has to satisfy these demands”.K.com/features_effect. the Uppsala internationalization process model and the concept of psychic distance are used to answer the question why and how Ikea internationalize to Japanese market. firms develop their activities abroad over time in an incremental fashion. starting from nearby countries that are psychically close to the home market.05.04.businessweek.asp?pf_id=256 38 Hollensen. E. Ikea’s New plan for Japan.BA thesis BA-MMC 15. who thinks that this time Ikea is prepared and has done its homework. based on their knowledge development.03. the biggest home-furnishing retailer. First.2009 company”. (28. Is Ikea for everyone? Cited from (10.1 Internationalization of Ikea on the Japanese market 4.05. 4. S. 48.d. 4.com/?ID=11 36 18 .39 Little geographic and psychic Capell. used to high quality and high service levels.com/globalbiz/content/apr2006/gb20060426_821825. “Japan’s notoriously fussy consumers will not be open to the idea of building furniture themselves.2009) http://www.ikea. The new concept of Ikea on the Japanese market is “making an ideal home” and Kullberg also explains that it is the idea they want to inspire people with. started the international expansion from the nearest countries. the market strategy and factors that made Ikea a failure on the Japanese market in the first round and success in the second round are analyzed using the concept of standardization and adaptation. Cited from (01. Denmark (1969).1.2009) http://www. op. 39 Ikea group corporate site n.brandchannel.. Ikea’s biggest barrier is these time the same that it was first time around. Ikea group stores.04. Germany (1974) and so on. Empirical data is utilized to analyse the cases.1 First round According to the Uppsala internationalization stage model.2006).2009) http://www.. Cited from (28. p.cit. “Today is the right time to come to Japan”.38 Ikea. “We are meeting the most demanding customers in the world.
and tips on how to succeed.05. Cited from (28.42 According to the Uppsala internationalization model. as well as market specific knowledge about home country and the nearest markets.05. in the Japanese market.d. the unit of analysis is not the country but the gap between actual and expected behaviour. said that the strategy Ikea chose for entering Japanese market in the first round was the same as in the countries entered before..04. general and objective knowledge.pdf 41 Asian info n.2009) http://webjapan. G.com/p/articles/mi_m0NTN/is_73/ai_n21081525/pg_4/ 19 .geert-hofstede. Japan. Geert Hofstede Cultural Dimensions.org/asianinfo/japan/proeconomy.04. & Forsgren. 40 Japan fact sheet n. was not an exception. M. Ikea perceived the psychic distance being smaller.2007). Cited from (01. Internationalization of Ikea in Japan was shaped by environmental conditions such as economic and regulation. Perceiving the uncertainty level and the psychic distance as small leads to the conclusion that the knowledge development can be kept at low level too.. can seem to be enough for the new entry. Failed businesses in Japan: a study of how different companies have failed. As it is mentioned in the critics of the psychic distance concept.44 That means that by the time of first entry. the more psychically distant is the market. Summary of Japan’s economy. (09-10.144 44 Lane. due to the economic growth Japan became attractive for foreigner to invest as the economy expanded rapidly and turned Japan from less-developed into the second largest market in the world40 as well as the growing city population made the demand for services higher. Cited from ( 30. president of Ikea Japan K. skipping stages of the establishment chain. That explains Ikea’s choice to transfer their European strategy to Japan.d. After a successful entry in these countries.htm 42 Itim international n.41 Ikea considered the Japanese market attractive and decided to enter it in 1974. Japans economy in an era of globalization.d. After the Second World War. reduced the uncertainty level and made the internalization easier not requiring a lot of new experiential knowledge. in the critic of the model it is stated that some companies still enter the distant markets at an early stage. I. which reduced the level of uncertainty and contributed to the expansion decision at an early stage. op.2009) http://www. Ikea decided to invest in distance country in Asia. At that point.cit p.BA thesis BA-MMC 15.2009 distance between Sweden and the above mentioned countries. However.K. measured according to Hofstede’s dimensions. the more knowledge is required to reduce the uncertainty level and develop a right strategy.43 Ikea.2009) http://www.asianinfo.org/factsheet/pdf/04Economy. Lars Petersson. Hofstede’s dimensions describe Japan as culturally distant from Sweden in a very high degree. entering Japan in the 1970’s right after entering the closest markets.04.com/ 43 Bjorkman.2009) http://findarticles. Cited from (01.
You need to have local people employed right from the start. the real cultural distance ended to be larger then Ikea had expected.asianinfo.K. together with outside factors such as instability of Asian economic growth and inflation46 among other things lead to failure and Ikea chose to withdraw stores out Japanese market in 1986.50 By the time of the second entry Ikea was already present in the most important markets of the world.org/asianinfo/japan/proeconomy.d .04. 50 Ikea group corporate site n. that understand what this country is about”. 20 .d.php?titolo=Ikea%20confident%20as%20new%20store%20opens%20in%20Ja pan&persona=Anders%20Dahlvig 49 Jetro n.BA thesis BA-MMC 15. “There are a lot of local things you need to understand. Ikea group president.cit. at a high level. 48 News Gate NY n. op.cit. created favourable conditions for the new entry. Russia (2000) and Australia (1981).. op.d. together with deregulation changes in Japanese economy and large scale retail store law in 1990’s.2 Second round After almost thirty years since Ikea unsuccessfully had tried to launch a store in Japan. Canada (1976). Cited from (01. Ikea confident as new store opens in Japan. Summary of Japan’s economy. which made the country much more open to foreign investments.1. the early entry was a big mistake and right decision was to leave and wait until they were ready. which contributed to Ikea’s international experience.2009) http://www..05. As discussed in the section “Japanese home furnishing sector and lifestyle preferences” Japanese generations of “baby boomers” and “second-generation baby boomers” were pursuing new life styles thus increasing the 45 46 Ibid. This.2009 However. and in 2002 established Ikea Japan K. with the focus toward promoting foreign direct investment into Japan and helping firms maximize their global trade potential).net/site/news/newsfile. China (1998). in assistance with JETRO ( Japan external trade organization is a government-related organization that works to promote mutual trade and investment between Japan and the rest of the world.49 In 2006 the first Ikea mega-store was opened Tokyo (Funabashi). such as USA (1985). commented on that: “I think last time in 1970s it was way too early to come to Japan”. Asian info n. in 2001 they finally felt that the time was right to re-enter the Japanese market.48 4. Petersson commented that Japan is not just another country.d.cit.47 Anders Dahlvig.05.. According to him. op..45 General and objective knowledge were in a high degree not enough to deal with the Japanese market.2009) http://newsgateny. and the lack of experiential and market specific knowledge while internationalizing on an early stage.htm 47 Lane G. Cited from (01.
quality.57 Moreover.al.04. According to Mooij. Realizing the cultural differences. Johanson & Vahlne. domestic competition on the foreign markets.cit.52 In order to understand customers and cultural pattern of Japanese. 57 Kotler and Keller.54 According to Kullberg. but learned from mistakes by gathering market specific knowledge.28 55 Kotler and Keller. 678 21 .cit. Ikea uses a rather standardized approach to the foreign markets.2 Degree of adaptation When entering a new market. cit. doing things the other way around than the traditional furnishing business and benefiting from Scandinavian style.. Ikea made a survey and visited more then hundred of homes. Having three distinct features – function. Having a unique concept. p.. and low price – the company basically copied the developed concept worldwide. op. p.55 In general. 4.. p.2009 demand for life style related products and services. In general. op. according to the theory. it contributed to Ikea in building a global brand with a global image. ability to leverage good ideas quickly and efficiently. et.cit.51 Moreover..cit. a global brand is “one that shares the same strategic principles. This time around. such as economies of scale in production and distribution. gives many benefits.cit. op. Japanese customers have changed a little too. now the time to expand on the Japanese market was right. it was a great challenge for Ikea to overcome cultural differences and maintain their advantages while using their experiences in the past to conquer lack of foreign knowledge. Ikea stood for something different from the local.op. op. op. positioning and marketing in 51 52 Capell.56 The standardized approach.cit. 28 53 Capell. and now were warming to “do it yourself” shops. Ikea has done its homework and after five years of preparations was ready to meet the Japanese consumers. lower marketing costs. consistency in brand image. 677 56 Dahlving A. Ikea was not content with general and objective knowledge any more. p. a company should choose how to approach it and to which degree it must adapt their strategy to the local conditions.BA thesis BA-MMC 15.53 Market specific knowledge favoured the uncertainty decline and together with political stabilization of the market and changes in consumer tastes contributed to the commitment decision. op. whereas Ikea’s modern aesthetic seems to appeal to Japanese taste. 54 Johanson and Vahlne..
04.thelocal. M. including a light Scandinavian furnishing style.60 However. According to Dahlvig. a part of Ikea’s strategy is to inspire their global customers with Swedish family values.cit. op. (16. First of all. laws.d. says Kullberg. for the reason of its small size the store has not attracted enough attention and Japanese consumers were not willing to assemble Ikea’s do-it-yourself kits. languages.05. 63 The Local n. Go home in time to see your children.. 22 . cit. Y.64 This leads to a conclusion.”58 Ikea as a brand matches to that description in a rather high degree.04. different countries. The concept all over the world is the same. The degree of adaptation was very low. et. as Ikea does. Therefore in the second round Ikea being taught by the past mistakes gained the market specific knowledge and learnt to adapt the level of services.2009 every market throughout the world.2009) http://www. 58 De Mooij. Sweden’s Ikea back in Japan after 20-year hiatus. That is the concept we want to inspire in people here”.2006). 64 Capell. op... After spending five years on preparations.59 Moreover. et. It carries the same brand name or logo. can not allow a fully standardized strategy. that the low degree of adaptation and the wrong direction that it has taken is a consequence of Ikea relaying too much on the general knowledge and lacking the market specific one. Ikea learned about tastes.jp/cgi-bin/nb20060425a1. Its values are identical in all countries. op. and all other factors have to be taken into consideration. Cited from (30. the strategy for Japan was very similar to the one it used on its nearest markets. 62 Capell. cit.63 But the lack of market specific and experiential knowledge at that time brought Ikea into disappointment.al.61 As Ikea entered Japan for the first time in 1974 on a rather early stage in their internationalization process.(25.. California: SAGE Publications. home is the most important place and having children is the most important thing. Global marketing and advertising: Understanding Cultural Paradoxes. even a global brand that seeks to educate consumers. showrooms. it has a substantial market share in all countries and comparable brand loyalty.se/3566/20060416/. gave Ikea the same advantages in each country that it had in Sweden in the early days. The distribution channels are similar. Worldwide Ikea’s main target group is younger people and young families.BA thesis BA-MMC 15. Cited from ( 09.04. The uniqueness of the concept.cit. flat-pack and self assembling. 60 Wijers-Hasegawa.2009) http://search. (1998).2006) ”Size matters as Ikea returns to Japan”. 59 Dahlving A.. op. conveyed mainly in the small size of the store.japantimes. although the marketing mix can vary.04. making surveys and visiting more then a hundred of Japanese homes. 62 based on the fact that smaller stores are what the Japanese consumers were used to.co.al. “In our world.html 61 Dahlving A.
market based price in each country. beds and tables which are top sellers in Europe would not attract Japanese consumers because they simply would not fit into their homes.BA thesis BA-MMC 15. To find out what strategy Ikea is using. and in rich countries it would loose profit due to prices being too low compared to costs for production. because these pricing strategies take into consideration costs related to a specific market or its spending power of customers. op.04. for example. The decision was made not to adapt the products by. 67 Wijers-Hasegawa. 23 . but to adapt the product range by selecting 7500 items out of 10000 suited to cramped Japanese homes. prices for the same product in Japan and Sweden were compared.2009 preferences and lifestyles of Japanese consumers and has developed a new strategy for the Japanese market based on those cultural differences. There are four elements of the marketing mix. 66 The adaptation in this case became a necessity. Cost-based prices and market based prices are a part of adaptation strategy. promotion. that large sofas. They are: uniform price everywhere. this is not possible in the most cases.2. If a company uses standardized approach to pricing. price. Y. 4. because in poor countries a company might not be able to sell products due to prices being too high.65 That observation lead to conclusion. prices would be the same everywhere. children usually live together with parents at home before marriage and also share space with grandparents or in-laws. changing their size. that global brand can adapt to meet the needs of local consumers: product. taxes and other factors. Ikea got an understanding of the tastes and living conditions of the Japanese. op.67 This strategy helped to avoid extra cost and to make the furniture appeal to the Japanese consumers as well. However.cit.2. and cost-based price in each country. that a sleeping couch in Sweden costs 3195 SEK.cit. Most Japanese homes are small. where as the same 65 66 Capell.2 Pricing Kotler and Keller discuss three options of setting prices on the international market.1 Product After having visited Japanese homes. 4. Ibid. place. The finding was. The strategies are elaborated on in the theory section.
which equals to 4192 SEK at the current exchange rate. Cited from (01. Thus. it can be concluded that the prices in Japan are not market based.aspx?Data_Plot_Id=183 70 News Gate NY n. However.. Ikea uses a quite standardized approach worldwide. 72 News Gate NY n. after accumulating market knowledge of the Japanese behaviour from the first round. as discussed above. op. However.2009) http://newsgateny. because small stores were what the Japanese consumers were used to.69 Based on that information. we buy land and build a store on it”.72 68 69 Ikea Japan corporate website and Ikea Sweden corporate website http://public.000 product lines supported by 2.al. Having cost based prices has a risk that in countries where the costs are high company can be priced out of the market. Sweden turned out to be the ninth richest country. that an adaptation approach is used in pricing on the Japanese market.3 Place/distribution When it comes to distribution.BA thesis BA-MMC 15.php?titolo=Ikea%20confident%20as%20new%20store%20opens%20in%20Ja pan&persona=Anders%20Dahlvig 71 Dahlving A. they tried to adapt the size of the store by making it smaller.05. Ikea introduced a mega store with 10. led to disappointment. 4.org/pub_dp_report. it is not the case of Ikea in Japan. by the time of the first entry on the Japanese market. Ikea makes use of big size stores with many showrooms to present their products to the customers.2009 model in Japan costs 51900YEN..php?titolo=Ikea%20confident%20as%20new%20store%20opens%20in%20Ja pan&persona=Anders%20Dahlvig 24 . When entering Japan for the second time. says Dahlvig.68 It makes clear.70 So it can be concluded that chosen strategy gave Ikea both: an opportunity to match differences in actual costs and a competitive advantage on the Japanese market. a child-care area and one of Tokyo’s largest restaurants.05.d . et.2009) http://newsgateny. nominal GDP per capita of Japan and Sweden for 2007 is compared. Then.200 car parking spaces.net/site/news/newsfile.d . they recognized that the size of the store is a matter in selling furniture in Japan. Although Ikea is a mass retailer. “Normally. the “no brand” home ware retailer.net/site/news/newsfile. Ikea confident as new store opens in Japan. Ikea confident as new store opens in Japan.. “The prices are still competitive compared to other well-known furniture retailers such as Muji. because if they were Ikea should have been charging more in Sweden then in Japan.04.cit.. whereas Japan is on the sixteenth place. it was not such a good idea and.” Customers were also pleasantly surprised by the prices being lower then they expected Scandinavian furniture to be. prices are cost-based.71 Size of the store is a significant factor.2. In order to find out whether it is cost-based or market based pricing. Cited from (01.data360.
Packaging is also an important issue when it comes to distribution. one of the most popular furnishing stores. op. gives Ikea an actual opportunity to built big stores and save on ground rent. “Your partner in better living. which is a battleground for furniture retailers.html 76 Wijers-Hasegawa. you do yours. the more we sell”74 Moreover. op. as flat-packs and self-assemble kits are an important part of Ikea’s concept.04.2009) http://www.. Student info. contributing to low level prices.cit.04. Japanese customers were not familiar with the do it yourself kit.cit.ikea. 25 .BA thesis BA-MMC 15.000 people had passed through its doors.76 Customers’ unwillingness to do their part was one of the reasons that led to Ikea’s failure in the 1980’s and later on. 4.d. says that his team enjoys it. conveyed in not changing the flat-pack concept completely. We do our part. locating the store on the outskirt of the city. Yet. “The more people talk about furniture. Standardizing the market positioning and applying the flat-packs and self-assemble kits strategy global gives Ikea the same competitive advantage on each market. About Ikea.. 77 Capell. where they need to assemble the furniture from compact box themselves at home.com/ms/en_GB/about_ikea/press_room/student_info.2009 The new store attracted a lot of attention and within the first four hours 15. with ten large shops mostly located within two train stops from Ikea. after having gained the experiential knowledge.77 The lower degree of adaptation.73 The store was located in Funabashi area. Competition is taught. but Kullberg. thus lowering the actual costs and keeping prices low. and very few were willing to do that. opened its biggest store only a station apart from Ikea. op. but providing extra services. Y.4 Promotion/marketing communication 73 74 Ibid. to review the concept in Japan and adapt it more to customers tastes and habits by providing home delivery and assembly for an extra charge. which is Ikea’s worldwide strategy. Wijers-Hasegawa. Y.2. when the packaging concept was introduced in Japan.. Cited from (27. for his part. Tokyo Interior. Together we save money”75 is Ikea’s worldwide market positioning strategy.cit. still left space for Ikea to educate their customers and possibly train them to assemble the furniture themselves in the future.. it was not a success. 75 Ikea n.
adaptation is vital.2009) http://gridskipper. Ikea comprised 70 mini-showrooms on the second floor of the store with the same size of typical Japanese room in order to convince their understanding of small-scale living. op.5 museum. Since in different countries living situation is very different.com/watch?v=CRngo4fB6y4&feature=PlayList&p=6011624657F14FD7&playnext=1&playnext _from=PL&index=4 79 78 26 . by setting up 14 showrooms along tree-boulevard. The factors in Ikea’s internationalization strategy that influenced Ikea’s failure on the Japanese market in the first round and success in the second round could be summed up to.04. finding that Japanese homes are mostly small. it will not be appealing in a desirable degree. J.04. Cited from (13. 81 Snow.com/archives/entries/056/56578. 80 Ibid.BA thesis BA-MMC 15.79 Based on the gained knowledge. 5. Conclusion In this section conclusion of the thesis based on the thesis statement and the conducted analysis is provided. market knowledge and learning. When entering Japan for the first time in 1974 Ikea underestimated the significance of cultural differences and due to the lack of experiential and market specific knowledge perceived the level of uncertainty as low and the time Kotler & Keller.cit. namely.cit. The 4. (12. Firstly. op.78 Ikea’s showrooms are a part of promotion strategy. psychic distance. psychic distance creates barriers for Ikea to enter the Japanese market.81 Even in the TV commercial that Ikea launched in Japan in 2008 the emphasis is on the small-space living and educating the consumers about how easy it is to assemble the furniture yourself.80 For the same reasons and to gain attention Ikea launched an outdoor exhibition in Aoyama.php 82 http://www.youtube.05. If the furniture is presented in housing conditions that customers can not relate to.5 refers to the fact that each showroom is in the size of 4 and half tatami mats.2009 Cultural and regulatory differences often force a company to adapt their communication to the local market.. 683 Capell.82 Adaptation of the commercial to the specific market makes it both appealing and allows to focus on solving specific market-related problems. That is why before opening the new store Ikea studied Japanese living situation. entry time and strategy.2006) Ikea Funabashi. Ikea 4. p. which appeal to customers by presenting the furniture in almost real life housing conditions.. and degree of adaptation.
businessweek.2009 as right to enter the Japanese market. Bibliography Asian info n. Before entering the market for the second time Ikea. Remaining a global brand and using a rather standardized approach worldwide. and thus market based knowledge. It made the marketing program relevant for the Japanese and contributed to the success.05. The gained market specific knowledge contributed to understanding of consumers’ lifestyles and needs.htm Bjorkman. Secondly.com/globalbiz/content/apr2006/gb20060426_821825.05.04. Though Ikea did not succeed in expanding on the Japanese market in the 1970’s. due to the lack of market specific knowledge. The nature of the international firm.04.asianinfo. Capell. Thirdly. Cited from (01.BA thesis BA-MMC 15. (1997).org/asianinfo/japan/pro-economy.d. Ikea gained extra skills to conquer other distant markets in world. K. Ikea adapted the marketing mix to the special features of Japanese market and consumers. It can be concluded that internationalization on the Japanese market was a big challenge for Ikea. in the second round Ikea made use of learning and past international experience. Ikea’s New plan for Japan. Summary of Japan’s economy. which is a platform for building the right marketing strategy.2009) http://www.htm 27 . I. (26.5 pages 6. Characters: 49688 – 22.2006).2009) http://www. which led to a conclusion that a higher degree of adaptation is needed on the Japanese market. M. by the time of the first entry research. Copenhagen: Reproset. spent five years on research in order to understand the cultural differences and get more market specific knowledge reducing in that way the level of uncertainty. which led to failure. there was too little degree of adaptation in the marketing strategy and as a result the Japanese consumers could not relate to the concept. realising that the level of psychic distance between the Swedish and the Japanese is high. was missing. Learning from this experience and acquiring the international know-how from satisfying ones of the most demanding customers in the world. Cited from (01. & Forsgren.
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