A study of IKEA Saudi Arabia David Eskander Mohamed Kotaiba Abdul Aal Does IKEA Culture Apply Abroad? A Study of IKEA in Saudi Arabia 05-Feb-10 Karlstads universitet 651 88 Karlstad Tfn 054-700 10 00 Fax 054-700 14 60 [email protected] www.kau.se 1 M. Kotaiba Abdul Aal & David Eskander Karlstad University, Autumn 2010 A study of IKEA Saudi Arabia IKEA Store in Jeddah IKEA Jeddah 2010 2 M. Kotaiba Abdul Aal & David Eskander Karlstad University, Autumn 2010 A study of IKEA Saudi Arabia Contents 1 Abstract.................................................................................................................................... 5 2 Acknowledgements ................................................................................................................. 6 3 Introduction ............................................................................................................................. 7 3.1 Background ...................................................................................................................... 7 3.2 Problem area..................................................................................................................... 8 3.3 Research Question and Purpose ....................................................................................... 8 3.4 Earlier research................................................................................................................. 9 3.5 Delimitations .................................................................................................................. 10 3.6 Disposal.......................................................................................................................... 10 4 Methodology.......................................................................................................................... 11 4.1 Course of action research approach Research Methods/approach................................. 11 4.2 Selection of Method- Case Study................................................................................... 13 4.3 Selection of Respondents ............................................................................................... 14 4.4 Reliability and Validity .................................................................................................. 14 4.5 Primary and Secondary Data Collection ........................................................................ 15 4.5.1 Primary data........................................................................................................................15 4.5.2 Secondary data ...................................................................................................................19 5 Theory.................................................................................................................................... 21 5.1.1 What is service? ..................................................................................................................21 5.2 IKEA Culture ................................................................................................................. 35 5.2.1 The IKEA Saga......................................................................................................................35 5.2.2 The IKEA Vision, Business Model and Strategies ................................................................36 5.3 Welcome to Saudi Arabia .............................................................................................. 39 5.3.1 General Information ...........................................................................................................39 5.3.2 Saudi Arabian Economy ......................................................................................................40 5.3.3 A shift into internationalization..........................................................................................41 5.3.4 The story of Franchising......................................................................................................42 5.4 Culture............................................................................................................................ 43 5.4.1 Arabic and Islamic Culture ..................................................................................................44 5.4.2 Geert Hofstede Cultural Dimensions ..................................................................................47 6 Empirics................................................................................................................................. 48 6.1 Study of IKEA in Saudi Arabia...................................................................................... 48 6.1.1 General Information ...........................................................................................................48 6.1.2 Our First Impression about Jeddah and IKEA......................................................................49 6.2 IKEA Shopping Experience........................................................................................... 50 3 M. Kotaiba Abdul Aal & David Eskander Karlstad University, Autumn 2010 A study of IKEA Saudi Arabia 6.2.1 Self-service concept ............................................................................................................51 6.2.2 Freedom of Product Experience .........................................................................................53 6.2.3 No “don’t” in IKEA store......................................................................................................53 6.2.4 Easy to Assemble ................................................................................................................53 6.2.5 Inspiration of IKEA Design...................................................................................................54 6.2.6 The Formula Quality/Price..................................................................................................54 6.2.7 Product range......................................................................................................................56 6.2.8 Service scape.......................................................................................................................57 6.2.9 Småland...............................................................................................................................57 6.2.10 Convenient Opening Hours.................................................................................................58 6.2.11 Easy Access for All Genders and Ages.................................................................................60 6.2.12 IKEA Restaurant...................................................................................................................60 6.2.13 After Sales Services .............................................................................................................63 6.3 IKEA Coworkers............................................................................................................ 64 6.3.1 An Eye on the Coworkers....................................................................................................64 6.3.2 Customers Eye on the Coworkers.......................................................................................68 6.4 Marketing communication ............................................................................................. 69 6.5 The Swedish Symbol...................................................................................................... 70 7 Analysis and Summery Of the Results.................................................................................. 71 7.1 IKEA culture vs. Saudi Arabia Culture.......................................................................... 78 7.2 Adaptations in IKEA store ............................................................................................. 80 8 Conclusion............................................................................................................................. 82 9 References ............................................................................................................................. 83 10 Appendix............................................................................................................................ 86 10.1 Interview with IKEA Managers ................................................................................. 86 10.2 Interview with the Customers..................................................................................... 88 10.3 Questions for the Employees...................................................................................... 90 10.4 Some pictures of the store .......................................................................................... 91 4 M. Kotaiba Abdul Aal & David Eskander Karlstad University, Autumn 2010 A study of IKEA Saudi Arabia 1 Abstract Purpose-the purpose of this research is to answer the research questions of how does IKEA’s culture fit the Saudi market from different perspective (customers, employees, management) which has a different value-based culture. Does IKEA culture make resonance or dissonance in the minds of the customers in Saudi Arabia? Design/methodology/approach- based on interviews with the top managers, co-workers and customers at IKEA store in Jeddah, along with observations of the store layout, customers and co-workers. Findings- the study distinguish the importance of understanding