Interference by the Government

Governments and politicians also say they want more free competition. But in many markets, we see more and more examples of various trade barriers being introduced, extended, or prolonged. Ikea has confronted trade barriers such as import duties (in Russia), product specifications (formaldehyde in Japan), bureaucracy and corruption (Russia again), trade licensing (many European countries), and currency fluctuations (United States and Russia). All these are good examples of challenges preventing global expansion.

The political situation within a country is sometimes an important aspect of a new market entry. What principles should guide such decisions? I have always been of the opinion that following the United Nations directives on this matter is as good a yardstick as any. Operating in countries where democracy is not yet fully developed is often the best way to influence progress. Avoiding such countries can promote isolation.