As of January 2014, IKEA owns 349 retailing outlets across 43 countries. The gross revenue was €28.506 billion in 2013 and its operating profit share was worth €4.011 billion (IKEA Group, 2013). IKEA is a privately owned business organization and its founder was Ingvar Kamprad. The current CEO and chairman of the company are Peter Agnefjäll. The company manufactures more than 12000 variations of products and conducts business in all major economies of Europe, North America, Asia and Oceania (Chu, Girdhar amp. Sood, 2013). Due to extensive business internationalization, the scope and scale of IKEA’s business are wide. The company utilizes 1% of the global supply of wood. IKEA has expanded its internationalization process by following different types of market entry approaches (Dickson amp. Giglierano, 2000). In China, IKEA expanded business through joint venture entry approach. A joint venture is a special business agreement whereby two or more business entities merge as a completely new organization or to generate new assets to the equity holding of both the companies (Campbell amp. Netzer, 2009). IKEA entered the Chinese market through a joint venture agreement. The company opened its retailing outlets in prominent locations in China under this venture agreement. IKEA had entered the Chinese market in 1998 (Harapiak, 2013). The company had selected the joint venture method for lowering the political risks associated and gaining core competencies within the dynamic furniture industry. Moreover, according to the Chinese regulations during IKEA’s entry, a foreign organization could enter only through a venture business with any native Chinese company. By forming a joint venture with a local furniture company of China, IKEA made strategic alliances with the Chinese suppliers and appropriately evaluated the market features therein (IKEA Group, 2013).
Issues of International Marketing