Roskilde University Scandinavian Furniture in China Business Project Supervisor: Johannes Kabderian Dreyer Authors: Alexandra Nagyova, student number: 59075 Andreea Andrei, student number: 59086 Dong Han, student number: 59087 Number of characters: 172.303 (excluding bibliography) Alexandra Nagyova, student number: 59075 Andreea Andrei, student number: 59086 Dong Han, student number: 59087 Table of Contents Executive Summary ......................................................................................................................................... 1 Introductory Chapter ............................................................................................................................ 1 1.1 Introduction .................................................................................................................................. 1 1.2 Motivation and Problem Area ...................................................................................................... 2 1.3 Problem Formulation and the Research Question ....................................................................... 3 1.4 Literature Review .......................................................................................................................... 3 1.5 Delimitations ................................................................................................................................. 4 1.6 Structure ....................................................................................................................................... 5 2 Methodology ......................................................................................................................................... 6 2.1 Philosophy of Social Sciences ........................................................................................................ 6 2.2 Research Approach and the Purpose ............................................................................................ 7 2.3 Research Strategy ......................................................................................................................... 7 2.4 Theories and Models Used ........................................................................................................... 8 2.5 Research Choice ............................................................................................................................ 9 2.6 Sampling ........................................................................................................................................ 9 2.7 Data Sources and Collection ......................................................................................................... 9 2.8 Criticism of Sources and Methodology ....................................................................................... 10 2.8.1 Reliability ............................................................................................................................. 10 2.8.2 Validity ................................................................................................................................ 10 2.8.3 Generalizability ................................................................................................................... 10 3 External Analysis ................................................................................................................................. 11 3.1 Macro Environmental Analysis ................................................................................................... 11 3.1.1 Introduction ........................................................................................................................ 11 3.1.2 Political and Legal Influence................................................................................................ 11 3.1.3 Economic Influence ............................................................................................................. 15 3.1.4 Socio-cultural Influence ...................................................................................................... 17 3.1.5 Technological & Environmental Influence .......................................................................... 19 3.2 Micro Environmental Analysis .................................................................................................... 22 3.2.1 Industry Analysis ................................................................................................................. 22 3.2.1.1 Introduction .................................................................................................................... 22 3.2.1.2 Forces in the Industry ..................................................................................................... 22 3.2.1.3 Competitive Advantage of China in the Furniture Industry ............................................ 25 3.2.2 Competitors Analysis .......................................................................................................... 28 3.2.2.1 11 Furniture .................................................................................................................... 28 3.2.2.2 Hola Home Furnishing ..................................................................................................... 29 3.2.2.3 TMall ............................................................................................................................... 30 3.2.3 Buying Behavior Analysis .................................................................................................... 31 3.2.3.1 Stimuli ............................................................................................................................. 31 3.2.3.2 Organism ......................................................................................................................... 32 3.2.3.3 Response ......................................................................................................................... 34 3.3 Most Influential External Factors ................................................................................................ 36 3.3.1 Opportunities ...................................................................................................................... 36 3.3.2 Threats ................................................................................................................................ 36 4 Company Cases ................................................................................................................................... 37 4.1 JYSK ............................................................................................................................................. 37 4.1.1 Pre-Entry ............................................................................................................................. 37 Alexandra Nagyova, student number: 59075 Andreea Andrei, student number: 59086 Dong Han, student number: 59087 4.1.2 Entry .................................................................................................................................... 38 4.1.3 Post-Entry ............................................................................................................................ 38 4.1.4 Financial Situation ............................................................................................................... 40 4.1.5 Conclusion ........................................................................................................................... 45 4.2 IKEA ............................................................................................................................................. 46 4.2.1 Pre-Entry ............................................................................................................................. 46 4.2.2 Entry .................................................................................................................................... 47 4.2.3 Post-Entry ............................................................................................................................ 48 4.2.4 Financial Situation ............................................................................................................... 49 4.2.5 Conclusion ........................................................................................................................... 53 4.3 BoConcept ................................................................................................................................... 54 4.3.1 Pre-Entry ............................................................................................................................. 54 4.3.1 Entry .................................................................................................................................... 56 4.3.2 Post-Entry ............................................................................................................................ 57 4.3.3 Financial Situation ............................................................................................................... 58 4.3.4 Conclusion ........................................................................................................................... 62 4.4 Conclusion on Situation of Scandinavian Furniture Companies in China ................................... 63 4.4.1 Strengths ............................................................................................................................