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Ikea Human Resource Management in Chinese Market

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    For an international enterprise, KEA have to seek global expansion and entry foreign market. It has founded that KEA is perfect in every aspect when it is reported or researched. For instance, KEA makes some complicated enterprise management into simple principles: according to the consumption demand to design product, or created low price but do not spare significant efforts in reducing costs, created experiencing-style sales terminal and make the global supply chain running smoothly.

    This paper will focus on the human resource management of KEA in Chinese market based on the case study of internalizing a brand across cultures: the case of KEA. (Veronica V and Leslie, 201 1). In the early 1 9805, human resource management has been proposed by Beer and his colleagues at Harvard Business School. It is stated that departure from the previous views of the nature and purpose of personal management, with a set of prescription for managers to connect the effective human resource management, mostly, with the condition of corporate success and broader positive consequences for society (Beer et al. 984). With the increasing speed of retail internationalization, the issue of brand identify cross borders becomes more and more important. KEA should communicate their brand visions, values and brand promise to all employees in different locations of stores and ensure among all stores or internal store of employees share the brand understanding (Burt and Sparks, 2002). This paper we argue that human resource management of KEA in Chinese market.

    Firstly, the factors which cause problems in Chinese market will be discussed, meanwhile, how KEA improve its capacity of control those problems through supplier and customer relationship management will be discussed as well. Secondly, KEA has its own human resource management harries which focus on employee performance and individual ability evaluation. This paper will display those performance methods and express how the performance evaluation used by KEA for specialized individual characteristic. Finally, conclusion and suggestions are discussed.

    Own problems and solution Chinese market is one of foreign markets of KEA. In 1 998, KEA entered Chinese market and opened only two stores in Shanghai and Beijing but it has brought tremendous influence. People like to go shopping in KEA because the fashion factor, even if for people living in cities other than Shanghai and Beijing (KEA History). However, KEA has its own problems in Chinese market (KEA Global Marketing). The first problem is price. KEA household products got prevailed market reflection in European market by the low price strategy, while this strategy is not suitable in Chinese market.

    For example, most of Chinese do not willing spend several hundred Yuan on a small wooded table or around a hundred Yuan on a paper lampshade. It has reported that Kike’s purchase volume in Chinese market occupied 18% of the global amount. It greater exceeded all other countries of Kike’s foreign market volume. That is, Chinese market is a great potential market for KEA The second trouble is related to the different culture between Sweden where KEA has been founded and China, which is position of KEA It is remarkable and not easily compared with the similar brands.

    There are five aspects can simply demonstrate KEA position. Firstly, raw materials used to make product is drawn from something people “might be missing” like paper, wood and figurine instead of stainless steel or plastic. It is clearly close to the KEA core gist of “simplistic is beauty’ but more fashion, environmental friendly and ewer price furniture products, make people, at least in European market, KEA product is a popular and low price household product that suit for low- income people group.

    However, the position changed in Chinese market due to the income differentiation and cultural factors, KEA becomes middle-class to top furniture brand chosen by the white-collar people or someone like top brands. Secondly, different location of KEA store in European market and Chinese market. For example, majority of European families have private car and enjoying shopping to a leisure environment. Whereas, KEA had to hose store located in city center in Chinese market in order to convenient to people go shopping instead of located in city edge in European market.

    Thirdly is service problem. KEA in European market run as self-service store but it is not working well in China because Chinese are much like some salesclerks give them introduction or guidance when shopping, especially, KEA is a foreign brand for them(Lewis, 2005). Faced the problems displayed above, KEA in order to make their product can sale well reflect the problems with two main solutions are focus on add human actions to adopt the cultural fertilization and employee performance to meet their customer requirement (Advertised et al. 2006).

    Kike’s price in Chinese market is the lowest among its stores in the world as a whole, but still considered to be higher than that of domestic similar product. KEA found that even the “relatively low price” in European society is high for Chinese consumer. Compare with Western market, KEA can successful cut down its cost by large- scale purchase, own logistic network, instruction books and DID assembling. In this condition, KEA had to build its own research group in China and try to mind the cheapest raw material to make much practical product.

    Firstly, contract with manufactures to ensure the cost leadership strategy. KEA take much care to match manufactures with product to meet its mission. In the long term contract condition, supplier manufactures of KEA can work together, for example, the designers and suppliers, to build saving-generating features into production. Secondly, to build customer relationship through DID (do it yourself) assembling and finally, lead customers becomes a resource of company. It is a Pro-summer model of KEA.

    For instance, KEA offer assembling instructions for customer, while customers become the supplier of labor information, time and transportation of KEA in the process of DID assembling. DID concept not only save installation fees to consumer but also reduced cost for KEA (Diversion and Inquest, 2002). But, when KEA pay attention to provide customer with low price and good quality product by reduce cost, its do not realized Chinese people also KEA offer free door-to- door delivery and installation services. (KEA, Business News).

    Employee performance evaluation Kike’s vision is to create a better everyday life for many people (KEA Official Website). KEA human resource teams make care at co-workers inspiring, creating passion and enjoyable work environment. Depends on the continual development of KEA co-worker teams, Kike’s business gained continued success. KEA employees are through recruitment and training, benefits management and succession planning. The human resource management method safeguarded and strengthened KEA culture, and help KEA transform KEA vision into reality (Charles W. L. Hill and Garret R.

    Jones, 2010). According to Change Yang, the regional human resource manger of KEA Chinese market aid that Kike’s fundamental belief of chose co-worker is the one who can be trust and like to share more between co-workers. The belief closely combines employees’ work and willingness with their own interest. KEA ordered clear requirements for candidates on different positions and different levels, but does not mean the candidates must fully meet the requirements in each aspect, while focus on the degree of the requirements candidate achieved, and how the candidate to achieve.

    For instance, when KEA to recruit leader, KEA Will consider much of the leadership of the candidate whether suit for Kike’s value theory. As head of position in management, though the position determined by the top manager, leadership is gained direct by co-worker’s approval. In addition, KEA also considering the candidates ability of on long- term marketing planning, strategy making, project planning and manage changes approaches and so on. Besides, KEA adopt employee performance evaluation combine with employee private development approach.

    Table 1 : Kike’s performance evaluation and employee development Performance Evaluation I Employee Development I Differentiation between KEA value and individual value I Ethics, belief I Career explore I Company’s requirement and individual needs I Capability evaluation I Have the ability of improve personal performance and individual characters on a specialized position Conductive education and team building I Training employees with work relative knowledge and skills. Source: Form the form above shows, KEA have its own way to evaluate employees’ performance but combine the evaluation requirement with employees’ individual future development. Take the value aspect for example, though there is different requirement for different position employee, the scope and degree of requirement is the same. For the new manager or a freshman, KEA gives them suggestion and guidance like what should to do, how to do it and to share knowledge with them and to help them to construct knowledge framework rather than strict requirement.

    Meanwhile, with their working experience improving, KEA gives them more tasks and responsibilities as well as autonomous decision making. Besides the two ways of KEA human resource management, other aspects are paid attention like on infrastructure. In fact, it is belongs to leadership concept. For example, provide company-wide commitment to improve working efficiency. Creativity among employees is highly valued from self-assemble concept to store manager who let people go into the warehouse to choose their own furniture. All of this improved efficiency of the company.

    Moreover, Kike’s human resource management cared some detail aspects such as Kike’s office do not have open plan and rare private offices, everyone worked in KEA is called co- worker, everyone is treated equally and their first name is called throughout, regularly stages anti-bureaucracy weeks and so on. All these details help employees to cooperate among co-workers and institutions well (Sammie, S. , Yip,L. S. C. And LUCK, S. T. K, 2004). Suggestions for KEA human resource management Firstly, ensure employees’ behavior focus on meet customers’ expectation at 100%.

    Kike’s employees have a unified achievement which is vision discussed above, but every staff has an individual personality may influence their performance. Secondly, Human resource management department should make a short term, long-term or annual HER strategies which meet to company’s development. Thirdly, get to know the national or local labor laws relationships and know how to deal with relationship between company and labor market. When evaluate employees’ performance, the company should to build reserve files of top tier and make a plan for their career.

    Through discussed above the conclusion can be drawn that KEA experienced many problems when it entry into Chinese market like price, position, promotion and location. KEA overcome the tough points through to build long-term contract with suppliers, build research group to reduce cost, spread DID assemble culture to build KEA brand image and build a good customer relationship by DID culture. Despite some Chinese people are not satisfaction with KEA have no free delivery and installation services, they are ailing to know its culture and accept its product.

    Ikea Human Resource Management in Chinese Market. (2018, Apr 13). Retrieved from https://graduateway.com/ikea-human-resource-management-in-chinese-market/

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