IKEA in 2013: Furniture Retailer to the World
1. By the early 1970s IKEA had established itself as the largest furniture retailer in Sweden.
What was the source of its competitive advantage at that time?
Answer: Many students will probably attribute IKEA’s success in the 1970s to innovation. The
2. Why do you think IKEA’s expansion into Europe went so well? Why did the company
subsequently stumble in North America? What lessons did IKEA learn from this experience?
How is the company now applying these lessons?
Answer: IKEA’s experiences in the United States were in stark contrast to its experiences in
3. How would you characterize IKEA’s strategy prior to its missteps in North America? How
would you characterize its strategy today?
Answer: Most students will probably agree that prior to its missteps in North America, IKEA
4. What is IKEA’s strategy toward its suppliers? How important is this strategy to IKEA’s
success?
Answer: IKEA’s suppliers are central to the company’s success. In 2013, the company had more
5. What is the source of IKEA’s success today? Can you see any weaknesses in the company?
What might it do to correct these?
Answer: Many students will probably attribute IKEA’s continued success to it ability to remain
General Electric’s Joint Ventures
1. GE used to have a preference for acquisitions or greenfield ventures as an entry mode, rather
than joint ventures. Why do you think this was the case?
Answer: Many companies choose acquisitions or greenfield investments as an entry because
2. Why do you think that GE has come to prefer joint ventures in recent years? Do you think that
the global economic crisis of 2008-2009 might have impacted upon this preference in any way?
If so, how?
Answer: General Electric has shifted away from its traditionally preferred method of entering
3. What are the risks that GE must assume when it enters into a joint venture? Is there any way
for GE to reduce these risks?
Answer: Most students will probably focus on the fact that joint ventures, while offering firms
4. The case mentions that GE has a well-earned reputation for being a good partner. What are
the likely benefits of this reputation to GE? If GE were to tarnish its reputation by, for example,
opportunistically taking advantage of a partner, how might this impact the company going
forward?
Answer: GE is well recognized in the industry as being a good partner. GE’s partners find the
5. In addition to its reputation for being a good partner, what other assets do you think GE brings
to the table that make it an attractive joint venture partner?
Answer: Students may suggest that GE is recognized as being a good partner not only because of
Another Perspective: To explore General Electric’s international operations in more depth, go to
{http://www.ge.com/} and click on “worldwide.”
The Globalization of Starbucks
1. Where did the original idea for the Starbucks’ format come from? What lesson for
international business can be drawn from this?
Answer: The original idea for the Starbucks format came from Italy. The founder of Starbucks,
2. What drove Starbucks to start expanding internationally? How is the company creating value
for its shareholders by pursuing and international expansion strategy?
Answer: After Starbucks grew from a single store to more than 700 locations in just a decade, the
3. Why do you think Starbucks decided to enter the Japanese market via a joint venture with a
Japanese company? What lesson can you draw from this?
4. Is Starbucks a force for globalization? Explain your answer.
5. When it comes to purchasing coffee beans, Starbucks adheres to a “fair trade” program. What
do you think is the difference between fair trade and free trade? How might a fair trade policy
benefit Starbucks?
Coca-Cola’s Strategy
1. Why do you think that Roberto Goizueta switched from a strategy that emphasized
localization toward one that emphasized global standardization? What were the benefits of such a
strategy?
2. What were the limitations of Goizueta’s strategy that persuaded his successor, Daft, to shift
away from it? What was Daft trying to achieve? Daft’s strategy also did not produce the desired
results. Why do you think this was the case?
3. How would you characterize the strategy pursued by Coca-Cola under Isdell’s leadership?
What is the enterprise trying to do? How is this different from the strategies of both Goizueta and
Daft? What are the benefits? What are the potential costs and risks?
4. What does the evolution of Coca-Cola’s strategy tell you about the convergence of consumer
tastes and preferences in today’s global economy?