Analyzing IKEA’s International Investment in China Based on the Theory of International Production Compromise

Abstract

This study analyzes IKEA’s localized operation in China through the eclectic theory of international production. Firstly, the development history of IKEA is discussed along with its development in China. Secondly, IKEA’s direct investment in China is analyzed from the perspective of IKEA’s eclectic theory of direct investment in international production, the corporate ownership, internalization, and location advantages of the company, in addition to the challenges of IKEA’s investment and operation in China, hoping to enlighten the process of formulating overseas expansion strategies for foreign direct investment. This study aims to guide students to strengthen their skills in formulating and implementing strategies in regard to the international investment process of multinational companies. On the one hand, they can analyze the strategies used and challenges faced by IKEA in its international investment in China to stimulate their thinking on the international investment of Chinese enterprises; on the other hand, they can also strengthen their understanding of the international investment theory by analyzing IKEA’s international investment in China. This study hopes to enhance students’ understanding and application skills in regard to companies’ transnational operations.