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IKEA

DEFENITION

DEFENITION

MNC

multinational corporation any corporation that is registered and operates in more than one country at a time. Generally the corporation has its headquarters in one country and operates wholly or partially owned subsidiaries in other countries.

FDI

fdi

Foreign direct investment is an ownership stake in a foreign company or project made by an investor, company, or government from another country.

IKEA EXAMPLE

IKEA EXAMPLE

IKEA has already invested $400m, buying its 60-plus suppliers equipment and granting credit for investment and working capital – as Russian companies’ biggest headache is their inability to borrow from the local banks. The company plans to invest another $600m over the next five years

HOME & HOST COUNTRIES

Home country refers to the country where the haedquarters is located, whereas host country refers to the foreign countries where the company invests.

Host countries of IKEA: Europe, North America and Asia

Home country of IKEA: Sweden

HOME AND HOST COUNTRIES

+ & - of IKEA in China

+ & -

In the past three years, IKEA has invested 1.46 billion US dollars into the Chinese market, and claims it remains confident about the growth prospects in the country.

positive

  • strong support from policies - the Chinese government has introduced many policies and measures to attract foreign investment
  • stable political environment
  • vast consumer market
  • abundant human resources

+

negative

  • political environment
  • dilemma in procurement- IKEA’s rigorous and idealized purchasing management method has some contradictions with Chinese manufacturing. Some suppliers who have cooperated with IKEA said that if they provide IKEA with a ontinuous increase in the output of manufactured products, it would be difficult for them to find a partner with such a large production volume like IKEA; thus, it would be difficult for them to leave IKEA

Name

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