Capstone paper (Ikea in Romania)

Capstone paper (Ikea in Romania) - IKEA in Romania 1 IKEA...

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1 IKEA in Romania IKEA in Romania Eric T. Wilson Sr. & Jennifer Boese BINT 6311 International Business Management Professor Minna Mattila 5 December 2010
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2 IKEA in Romania Table of Contents Serial No. Description Page 1. Introduction 3 2 Business forays in Romania 4 3 Business profiling of IKEA 5 4. Entry modes: (Export/Franchisees/ Acquisition/ Takeover/Strategic partnerships) 6 5. Cultural impacts on the business opportunities management of IKEA in Romania: 8 6. Marketing Mix- low pricing strategy by IKEA 11 7, Conclusions 12 8. References 13
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3 IKEA in Romania Introduction Although not a very rich country by standards of the European Union which it joined on January 1, 2007, the economic condition of Romania has grown tremendously, especially since 1996, unto which time it was dominated by Communist regimes, whose harsh and oppressive socialistic policies were counter to a progressive market driven economic structure. With a total population of around 22 million in 238,391 sq km, Romania is slightly larger than Oregon country in the United States. The post Ceausescuen era since 1989 is believed to usher great economic growth and Romania’s accession to the European Union in 2007 is also believed to offer trade and commercial advantages to this country. (Source: The World Fact Book, 2010)
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4 IKEA in Romania Business forays in Romania Romania has the eleventh largest economy in the European Union by total nominal GDP and the 8th largest based on purchasing power parity and is one of the fastest growing markets in recent history with consistent annual GDP growth rates above 6% since 2008. Bucharest, its capital, is one of the largest financial and industrial districts in this area, with a metropolitan area of more than 2.6 million people. Romania has experienced growth in foreign investment with a cumulative FDI totalling more than $100 billion since 1989. Romania has since pursued a market economy with GDP per capita at around $ 7928.34B and growth rate of around 8.2%. However, despite having good GDP growth rate, it remains one of the poorest country in the EU membership counties, party due to the legacy left behind by an autocratic Ceausescuen socialist regime which destroyed its infra structure and almost reduced the country’s economy to penury. However, the post socialist regime in Romania, combined with most favoured nation (MFN) in terms of trading with United States could bring it better trade and business prospects in the coming years. Financial and technical assistance continued to pour in Romania from many of its trading partners like U.S., Germany, France, Italy, European Union member states and also other industrial nations, and international financial institutions facilitating Romania's reintegration into the world economy. The International Monetary Fund (IMF), World Bank (IBRD), the European Bank for Reconstruction and Development (EBRD), and the U.S. Agency for International Development (USAID) all had programs and resident representatives in Romania. Romania also attracted foreign direct investment, which in 2008 rose to $72 billion.
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This note was uploaded on 04/02/2011 for the course BUSINESS 6311 taught by Professor Minnamattila during the Fall '10 term at University of the Incarnate Word.

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Capstone paper (Ikea in Romania) - IKEA in Romania 1 IKEA...

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