1 Introduction
1.1 Problem definition
At present IKEA has expanded to a large degree merely in Europe, Asia and North America. Yet they have not entered Mexico. With this paper I intend to investigate whether or not IKEA is ready to expand into the Mexican market. I will base this upon a thorough SWOT analysis which will include parts of Hofstede's cultural dimensions and the VRIO framework. The Conclusion and Recommendations will state whether or not IKEA should initiate business in Mexico.
1.2 Company Background
The founder of IKEA, Ingvar Kamprad, was born 1926 in Småland. Starting at a very young age, Mr. Kamprad was always engaged in some kind of a business and in 1943, he received a gift from his father that enabled him to establish his own company. The name IKEA arose from his initials, IK, the farm were he grew up, Elmtaryd, and the city, Agunnaryd, where he is from. In the beginning IKEA offered pencils, wallets, and clocks. Kamprad tried to satisfy every need he could find with a product to a low price. In 1947, the first furniture pieces were introduced to the product line, and they were produced in the surroundings of Småland with excellent response. In 1951, the founder saw a possibility to become a large-scale low price furniture supplier. Several milestones followed during the year, one in 1956 when the first flat packages were introduced and another in 1965, when an IKEA department store in Stockholm was opened and the self-service concept was launched. After this, IKEA expanded all over the world and by the end of 1999 the company had become a global network with more than 150 department stores in 30 countries on four continents with 53,000 employees (IKEA, 2005).
The fact that Kampra ...