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