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International Business: Germany Europe and the World –
The IKEA Case StudyProf. Dr. Markus Raueiser
Cologne Business School, Germany
WELCOME!
Prof. Dr. RaueiserDean of International Business Department
• Regional networking, innovative cluster & strategisches
Mgmt
• Deutsche Bank AG & KPMG Peat Marwick LLP, New
York
The Nature of International Business
▪ All value-adding activities – including sourcing, manufacturing, and marketing – can be performed in international locations.
▪ International trade can involve products, services, capital, technology, know-how, and labor.
▪ Firms internationalize through various entry strategies, such as exporting and foreign direct investment.
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Dimensions of International Business
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Key Concepts in International Business
▪ International business: Performance of trade and investment activities by firms across national borders.
▪ Globalization of markets: Ongoing economic integration and growing interdependency of countries worldwide.
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Key Concepts (cont’d)
▪ International trade: Exchange of products and services across national borders; typically through exporting and importing.
▪ Exporting: Sale of products or services to customers located abroad from a base in the home country or a third country. Boeing and Airbus export billions in commercial aircraft every year.
▪ Importing or Global Sourcing: Procurement of products or services from suppliers located abroad for consumption in the home country or a third country. Toyota imports many parts from China when it manufactures cars in Japan.
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Key Concepts (cont’d)
• International investment: • Transfer of assets to another country or the • acquisition of assets in that country. Also known • as ‘foreign direct investment’ (FDI), we will focus• On this type of investment.
• International portfolio investment: Passive owner-ship of foreign securities such as stocks and bonds in order to
generate financial returns.
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The ‘Flows’ of International Business
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Who Participates in International Business?
▪ Multinational enterprise (MNE): A large company with substantial resources that performs various business activities through a network of subsidiaries and affiliates located in multiple countries. E.g., Caterpillar, Samsung, Unilever, Vodafone, Disney.
▪ Small and Medium-Sized Enterprise (SME): Typically, companies with 500 or fewer employees, comprising over 90% of all firms in most countries. SMEs increasingly engage in international business.
▪ Born global firm: A young, entrepreneurial SME that undertakes substantial international business at or near its founding.
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The Retail Giant from Sweden
31.10.2019 IKEA | © Prof Dr. M. Raueiser
IKEA’s Business Areas
31.10.2019 32IKEA | © Prof. Dr. Markus Raueiser
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1943 20121973
IKEA and Sustainability
Implementation of IKEA’s sustainability strategy “People &
Planet Positive”
INGKA Foundation
Ownership of IKEA was transformed to
Stitching INGKA Foundation in the
Netherlands
IKEA in Switzerland
First Ikea store was opened outside of
Scandinavia in Switzerland
Founded by the Ingvar Kamprad from Sweden
I: IngvarK: KampradE: Elmtaryd (farm where he was brought up)A: Agunnaryd (Kamparad’s hometown
The largest furniture retailer
Ikea has been ranked as the largest
furniture retailer
20081982
€16.3 billion
€22.5 billion €1.6 billion
€1.2 billion
IKEABusinessFunctions
Our business idea is “to offer a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them”.
- Business Function
31.10.2019 IKEA | © Prof Dr. M. Raueiser
IKEA’s Business Functions
Is IKEA an international enterprise?
31.10.2019 IKEA | © Prof Dr. M. Raueiser
Latest Advertisement
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Marketing and Design in Sweden
Why does IKEA designs in Sweden?
Production in Bangladesh, China, Poland
Why does IKEA produce in Asia and Eastern Euope?
Headquarter in the Netherlands
Why is IKEA’s Headquarter in the Netherlands?
Sales worldwide
How can IKEA sell its products worldwide?
Discussion
30.10.19 IKEA | © Prof Dr. M. Raueiser
Headquarter
Why is IKEA’s Headquarter in the
Netherlands?
Netherlands
The business is a private company owned by Inter IKEA Systems B.V
Accounting issues
Tax purpose → 10% taxavoid over €1 billion in tax
payments over the 2009–2014 period
Taxation
Marketing and Design
Why does IKEA designs in Sweden?
Sweden
Get a modern PowerPoint Presentation that is beautifully
designed.
Main marketing tool is the catalogue
History of the founder Ingvar Kamprad
Products and furniture are designed in Sweden to maintain
the Scandinavian spirit
Nordic Identity
Production
Why does IKEA produce in Asia and Eastern Europe?
China, Bangladesh, Poland
China and Bangladesh produce more than 50% of Ikea’s Retail
Wood-based products come from Poland
Lower cost
Sales
How can IKEA sell its products worldwide?
Worldwide
There are
Ready-to-assemble furniture
Made for mass consumer market
433 IKEA stores operating in 52 countries
5% of Retail Sales are online
Functional product portfolio
China27%
Poland 19%
Italy 7%
Lithuania 5%
Sweden 4%
Germany 4%
Others 34%
IKEA’s Key Success Factors
“We work hard to achieve quality at affordable prices for our customers through optimising our entire value chain, by building long-term supplier relationships, investing in highly automated production and producing large volumes.”
30.10.19 IKEA | © Prof Dr. M. Raueiser
China- Store layout reflects
the layout of a typical Chinese apartment
- Special balcony section
- Location near public transportation as owing a car is not widespread
- Additional offers of home delivery
U.S.- Implementation of
King/ Queen and Twin Size
- Implementation of huge sofas
- Implementation of deep wardrobes
- Implementation of bigger glasses
Adaption to consumer needs
Locations are based on consumer behavior
Mantain IKEA Standards
IKEA Worldwide
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CBS AND COLOGNE
STUDY IN COLOGNE
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STUDENT CITY• Population:1 Million
• App. 97 000 students
• Sports & Recreation
• Cologne Carnival
MEDIA AND TRADE• Hub for multinational companies
• Trade Fairs
• Media and Publishing firms
COLOGNE BUSINESS SCHOOL
• International Business Focus
• International & practice-oriented
• Fully English-taught study programs
• Student Exchange & Study Abroad semesters
• 3+1 Double Degree Programs
• German language courses
1500 STUDENTS
• 400 international students per year
• More than 70 nationalities on campus
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Email: international.office@cbs.dePhone: (+49) 221 / 93 13 09 – 476Web: cbs.de
3+1 BACHELOR DOUBLE DEGREE PROGRAM
Binus University (Sarjana Ekonomi or Sarjana Komputer) )
Cologne Business School (B.A.)
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B.A. in International Business, specialisation in:
▪ International Trade
▪ Marketing Management
▪ Financial Management
▪ International Business
▪ Accounting & Finance
▪ Marketing
▪ Info Systems
APPLICATION PROCESS
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3+1 PROGRAMS & STUDENT EXCHANGE/ STUDY ABROAD
Step 3:Complete the online application
Application deadlines: 1 May for Fall semester (Start August)1 November for Spring semester (Start January)
3+1 Candidates - Use the application form sent to you by Binus International
Step 2:Visit the CBS Webpage: https://cbs.de/en/internationality/international-students/visiting-students/
Step 1:Contact Binus International
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