International expansion through flexible replication: Learning from the internationalization experience of IKEA

Abstract

Business organizations may expand internationally by replicating a part of their value chain, such as a sales and marketing format, in other countries. However, little is known regarding how such "international replicators" build a format for replication, or how they can adjust it in order to adapt to local environments and under the impact of new learning. To illuminate these issues, we draw on a longitudinal in-depth study of Swedish home furnishing giant IKEA, involving more than 70 interviews. We find that IKEA has developed organizational mechanisms that support an ongoing learning process aimed at frequent modification of the format for replication. Another finding is that IKEA treats replication as hierarchical: lower-level features (marketing efforts, pricing, etc.) are allowed to vary across IKEA stores in response to market-based learning, while higher-level features (fundamental values, vision, etc.) are replicated in a uniform manner across stores, and change only very slowly (if at all) in response to learning ("flexible replication"). We conclude by discussing the factors that influence the approach to replication adopted by an international replicator.

Interdependence Across a Firm's International Trajectories

“…Eventually this initial event triggers a particular sequence of modal shifts (as Figure 1 illustrates, form modal shift 1 to modal shift N-1) (Gao & Pan, 2010;Johanson & Vahlne, 1977). To those scholars that subscribe to path dependence, the foreign market entry imprints on modal shifts (Jonsson & Foss, 2011).…”

“…According to recent literature reviews (Aharoni & Brock, 2010;Rugman, Verbeke, & Nguyen, 2011), this stream of research has undoubtedly furthered our knowledge of the internationalization of the firm inasmuch as it pioneers the idea of a firm's international trajectory as path dependent, thus introducing history into the agenda of IB scholars (Jonsson & Foss, 2011). It is, however, underpinned by a simplifying, yet implicit assumption (Clark & Mallory, 1997): that the firm's international trajectories are independent of each other.…”

Local development through social and territorial innovation: An exploratory case study

“…However, single-case designs are often regarded as somewhat suspect, as heavy sample bias implies problems of external validity (Bryman, 2001). Nonetheless, a basic lack of knowledge about the phenomenon often warrants explorative research based on a single case (Jonsson & Foss, 2011). Also, the use of qualitative methods offers the opportunity to help advance the field and assist in providing its own theoretical grounding (Doz, 2011).…”

The State of Case Study Research in Mergers & Acquisitions: A Review of the Literature in Different Management Streams

“…For instance, in-depth case analysis (Blaško et al, 2000;Cambra-Fierro et al, 2012;Conklin, 2005;Duncan and Mtar, 2006;Geppert et al, 2013;Halsall, 2008;Knoerich, 2010;Quah and Young, 2005;Singer and Yankey, 1991;Sim, 2006;Ullrich et al, 2005;Yip et al, 2006), testing the existing theories/models and propositions/hypotheses (Fang et al, 2004;Kshetri and Dholakia, 2009;Liu and Zhang, 2014;Altenborg, 2007, 2008;Nicholson and Kiel, 2007;Sinkovics et al, 2011), building theories/models and offering propositions/ hypotheses (Boehe, 2011;Deng, 2009;Dieleman and Sachs, 2008;Huang et al, 2008;Lynes and Andrachuk, 2008;Maguire and Phillips, 2008;Reddy et al, 2014;Tsamenyi et al, 2013;Wei and Clegg, 2014), and other ideas (Jonsson and Foss, 2011; longitudinal case study: Nadolska and Barkema, 2007; case survey method: Larsson and Lubatkin, 2001; surveybased studies : Bjursell, 2011;Ito et al, 2012;Krug and Nigh, 2001;London and Hart, 2004;Meyer et al, 2009;Very and Schweiger, 2001; teaching cases: Nangia et al, 2011;Reddy et al, 2012). These studies are summariz...…”