IKEA in China: Facing Dilemmas in an Emerging Economy

This case summarizes the development of IKEA's China operations since the opening of its first store in Shanghai in 1998. Since then, IKEA had added four retail stores in Shanghai, Beijing and Guangzhou. Nevertheless, IKEA still had not been profitable in China. The case aims to identify the underlying factors that influenced IKEA's performance in China. The case starts by summarizing IKEA's history, including its organizational characteristics and the competitive dynamics in the Chinese furniture market. Building on this framework, the strategic challenges of IKEA in China are highlighted. In this regard, the case analyzes the effectiveness of IKEA's distinct furniture concept, pricing strategy, and market positioning in the Chinese furniture market. On the whole, the case aims to provide insights for international business development in the Chinese furniture market.