A Study of JYSK in the Chinese Market

Caroline Stenius Ager

Student thesis: Master thesis

Abstract

The purpose of this thesis is to investigate why the Danish firm JYSK failed to succeed in the Chinese market and had to withdraw after eight years of presence. It will therefore be researched which factors had an influence on JYSK’s lack of success. To do so, both primary and secondary data have been used, although the majority of the analysis is based on primary data. In terms of the primary data, it has been qualitative data such as four expert interviews, which have been collected. In addition, the research is conducted from a critical realistic and hermeneutic perspective. To analyse the above mentioned, different kinds of theories and frameworks have been applied. The CAGE framework (2001) has been applied in order to investigate the ‘distance’ between China and Denmark and thus the different opportunities and challenges China presents as a host country. Dunning’s OLI eclectic paradigm (1977) has been used to analyse how JYSK entered the Chinese market, and whether another entry mode would have been more beneficial. The concept of Country of Origin image (Min Han, 1990; Josiassen et al., 2013) has been applied in the analysis to investigate how JYSK emphasised its Scandinavian heritage and whether this was the right strategy to follow. Furthermore, several cultural theories such as the ones presented by Hofstede (1980), Hall (1998), Trompenaars and Woolliams (2003), Gesteland (2005), and the GLOBE project (2004) have been applied in order to analyse the Chinese culture and consumer preferences. The study shows that there were both external and internal factors influencing why JYSK failed to succeed in China and had to withdraw. In terms of the external factors, it was particularly the very different Chinese culture and consumer preferences as well as the Chinese consumers’ lack of interest for the furnishing and decoration of the bedroom, which made it challenging for JYSK. These external factors would however not have influenced JYSK’s lack of success if JYSK had followed a more appropriate strategy. It is therefore primarily internal factors such as JYSK’s strategy which had the greatest influence on why JYSK failed to succeed in China and had to withdraw. Even though JYSK revised its strategy after four years and adapted more to the Chinese market, the two main reasons for JYSK’s lack of success are because the products were not of high enough quality and JYSK’s market presence was also not high enough. As a result, JYSK could not manage to create success and had to withdraw after eight years of presence in China.

EducationsCand.ling.merc Erhvervssprog og International Erhvervskommunikation (Multikulturel Kommunikation i Organisationer), (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2019
Number of pages162
SupervisorsDaniel Barratt