FIN4006 International Finance · Tutorial 1

Domestic vs International Firms — the case of IKEA
01 · Overview

Overview of domestic and international firms

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/
AI RESPONSIBILITY STATEMENT
"AI tools were used responsibly to assist with research, idea generation, and language support. All information was reviewed, verified, and rewritten in our own understanding."
Appendix

Appendix — AI Prompt Log

Submitted as required: prompts used, how each response helped, and fact-checking performed.
AI Prompt Used
How the Response Helped
Verified?
Verification Source
"Explain the difference between domestic and international firms"
Background research for Slide 1–2 definitions
Yes
FIN4006 Lecture 1 & Tutorial 1.2 notes
"How did IKEA expand internationally since 1943?"
Built the expansion timeline for Slide 3
Yes
IKEA Museum official history; Inter IKEA Annual Report FY25
"Explain exporting, FDI, MNC and global supply chains simply"
Concept understanding for Slide 3
Yes
Course lecture notes; WTO glossary
"Find IKEA's latest global market, store and sales data"
Data for Slide 5 charts
Yes
Inter IKEA Group FY25 Financial Results; ikea.com newsroom
"Suggest a clear 5-slide structure for this topic"
Draft outline; rewritten in our own words
Yes
Checked against assignment brief requirements
Appendix · not presented — included for submission
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