Transnational Strategy Shift: The Importance of Cultural Awareness : - Case Study: IKEA

Abstract: Globally operating business organizations tend to use a global strategy by using a standardized strategy as a fixed format. However, this has developed to be very ineffective for the ability to compete in the different markets worldwide. The adaptation of local preferences hence, seems to be crucial but also very complex for multinational retailers. This study therefore, determines the complexity of considerations that a shift from a global to a transnational strategy includes. The decision making of which strategy is appropriate for multinational retailers to compete on a global market can be quite puzzling, as is can be seen in the bed textile segment. Therefore this research paper investigates, within a case study of IKEA’s bed textile department, if a shift from a global to a transnational strategy is of advantage for a multinational retailer like IKEA and to what extend cultural awareness has to be considered. The methods that were used for this study include a literature review in the mentioned focus area and a collection of primary data through a qualitative research design with an open questionnaire sent to the Sales Leaders of IKEA. The research has shown that market research is an important factor when it comes to cultural related differences between the countries. Also, when dealing with the concern of adaptation of the market relevant bed textile sizes to the product range, the Sales Leaders of IKEA have perceived different concerns. Therewith a full adaptation may not be the solution for all businesses, since this depends on the product and market preferences. The cultural preferences in each country and the right degree of standardization and local preferences are a big issue for the global bed textile industry and are hence perceived as the main challenges in this concern. Possible paths for future investigations are shown by the results of this study. Thus, an inclusion of other cases could enable the possibility of a generalization of the study’s findings. Also, the same case study could be expanded by including customers input in the individual markets; this would lead to a better understanding of the customer’s preferences and a higher validity of the study. Last but not least this study has shown that there is no simple answer given whether a shift from a global towards a transnational strategy is of advantage for multinational retailers; however interesting factors concerning the shift could be identified.