Cultural Intelligence for Entering New Markets

Marchblog

IKEA, a Swedish furnishings company that began in 1943, is now operating in over 46 different countries and territories; having recently opened one of their largest stores in Seoul, South Korea. It is a great example of a culturally intelligent company that continues to adjust, flex and learn from and acknowledge the cultural specific differences and nuances that can influence success and failure in their new markets.

Shop layouts, room sizes, locations, product designs, product names, space usages, local price points, measurements, shopping habits, marketing, even car parking are just some of the many cultural aspects that IKEA considers when they enter new markets and countries. It’s not just about finding the cultural differences, but also where they intersect.

In terms of market research, IKEA recognises that often consumers answer surveys more in tune with how they would like to be, rather than how they actually are. Home visits and installing cameras in homes are just a couple of methods that IKEA employ to gather real data. One such example was conducted in Shenzhen China, where it was observed that sofas have greater usage as back rests rather than seats; or the varying kitchen design needs, whereby there are different appliance space requirements according to country – the coffee machine versus the rice cooker or the need for a kimchi refrigerator. These insights allow IKEA to tweak and modify products to suit specific markets.

A further interesting survey examined the morning routines of over 8,000 people in 8 cities. Beside some very interesting statistics, the outcome was the modification of current products and the creation of new multifunctional products to better suit the needs of particular markets; along with an improved understanding of the different usages of space.

A recent article ‘How IKEA took over the world’ provides us with some great reminders –

  1. Cultural intelligence is a constant process
  2. The more global an organisation becomes, the more complex it becomes
  3. Product design, delivery and marketing across cultures demands cultural considerations, not just in terms of difference but also similarities
  4. The further away we move from our own culture the more we need to learn, understand and adapt.

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