FIN4006 International Finance · Tutorial 1

 

Domestic vs International Firms — the case of IKEA
DOMESTIC FIRM
Operates mainly within its home country — production, marketing and sales focused on the local market.
INTERNATIONAL FIRM
Does business across many countries — usually starting with exports, then overseas stores, regional offices and a global supply chain.
Globalisation — goods, capital and operations increasingly cross borders; with different currencies, firms must trade in foreign exchange.
02 · Key Differences

Domestic vs International — side by side

LOCAL FURNITURE SHOP
IKEA · INTERNATIONAL
03 · International Expansion & Globalisation

From one country to a multinational

IKEA MARKETS
DOMESTIC FIRM
1943
Sweden
Founded in Sweden — selling only in its home market.
Source: IKEA Museum history & Inter IKEA Group Newsroom FY25
04 · Benefits & Risks of Going International

Why it pays off — and what can go wrong

BENEFITS
RISKS
COUNTRY RISK
FINANCIAL & OPERATIONAL RISK
Source: Inter IKEA Holding B.V. Annual Report FY25
05 · Real-World Example

IKEA in numbers

Global retail sales
Note: deliberate 10% price cuts over two years — volumes and customers each +3%.
Sales by channel
Run through a franchise system — franchisees pay 3% of net sales.
Economies of Scale Growth Risk Diversification
Source: Inter IKEA Group FY25 Results & Year in Review
 
References & Statement

Sources

  1. Inter IKEA Group. (2025). FY25 Financial Results & Year in Review. Retrieved from: https://www.inter.ikea.com/en/performance
  2. IKEA. (2025). IKEA retail sales figures for FY25. Retrieved from: https://www.ikea.com/global/en/newsroom/
  3. IKEA. (2026). How we work — Year in review FY25. Retrieved from: https://www.ikea.com/global/en/our-business/how-we-work/
  4. Inter IKEA Group. (2025). Inter IKEA Holding B.V. Annual Report FY25. Retrieved from: https://www.inter.ikea.com/en/performance/download-financial-reports
  5. IKEA Museum. (n.d.). The IKEA story & timeline (1943–present). Retrieved from: https://ikeamuseum.com/
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