Jonsson, A., & Foss, N. J. (2011). Flashcards
International expansion through flexible replication: Learning from the internationalization experience of IKEA. Journal of International Business Studies, 42: 1079-1102.
Flexible Replication
A startegy where a company replicates its core business format while allowing local adaptation of lower-level feautures. IKE applies thi by maintaining the fundamental values of the company but adapting pricing, marketing, and product variations based on market learning
Reverse Knowledeg Flow
The process where subsidiaries contribute experiential knowledge to headquarters, leading to organizational learning. IKEA encourages reverse knowledge flow through commercial reviews, expatriate programs, and store-level innovations.
What concept does IKEA use to distinguish between core, unchanging principles and adaptable elements?
IKEA’s Idea Concept and Concept in Practice
The **Idea Concept **consists of IKEA’s core values, vision, and guiding principles, which remain unchanged across markets. The Concept in Practice includes adaptable elements such as store layout, pricing, and marketing, which can be adjusted to local conditions.
What was a key learning experience for IKEA that influenced its shift towards ‘flexible replication’?
a) Success in European markets
b) Initial failure in Japan and the U.S.
c) Expanding into neighboring Scandinavian countries
d) Merger with another multinational company
b.
Which theory is most closely related to the idea that companies internationalize through an incremental learning process?
Uppsala Internationalization Model
Which challenge did IKEA face when entering the U.S. market?
a) Legal restrictions on foreign ownership
b) Consumers’ preference for larger furniture sizes
c) High import duties on Swedish furniture
d) Lack of demand for affordable home furnishings
b.
How come the adoption of flexible replication is not expected until later stages of the internationalization process according to proposition 4?
a) It is false; flexible replication is expected in the early stages of internationalization to gain experiential knowledge.
b) A company must enter markets globally in an exploitative manner to gain local market knowledge.
c) Experiential knowledge that comes along with explorative and/ or exploitative internationalization is needed.
c.
Arrow Core (Winter & Szulanski, 2001)
A blueprint of a business model’s key replicable features, defining what, how, and where to replicate. IKEA challenges this by allowing flexible replication instead of a fully fixed model.
What is an advantage of following a phased approach to international expansion?
A) It allows companies to gain market knowledge and adjust their strategies based on real-world experience.
B) It ensures complete standardization, preventing the need for local adaptations.
C) It eliminates all risks associated with entering foreign markets.
a.
What approach do companies often take when they first expand internationally before adjusting their strategy?
A) A phased expansion model, where companies gradually enter new markets and refine their strategy based on experience.
B) A strict replication approach: businesses attempt to mirror their original business model in foreign markets and implement minimal alterations.
C) A decentralized model with full decision-making authority.
b.
