INTRODUCTION-
IKEA is a Swedish multinational group founded on 28 July 1943 by Ingvar
Kamprad. IKEA is a private company known for innovation which owned by
Inter IKEA Systems B V. It is headquarted at Delft, Netherlands, and has 433
locations across the globe. IKEA operates in 52 countries across the globe. IKEA
mainly deals in furniture, kitchen appliances, home appliances, Media storage,
lightening features etc. IKEA is accounted for approximately 1% of world
commercial product of wood consumption, because of which it is considered
as one of the largest users of wood in the retail sector. The present strength of
IKEA employees is 211000. IKEA had a revenue of 38.8 billion euro or $44.6
billion in the financial year 2018. The products of the company are available
offline and online, for offline sale of products it has its own stores and for
online market it has its official website WWW.IKEA.com. IKEA entering in India- As we
all know India has a huge population and a huge Market share so while entering to the
Indian market ,firstly IKEA observed the customer need by making a survey of Indian . So to
match the customers need IKEA has localised and tweaked its product like spice boxes tava
pressure cooker etc.s So to enter in Indian market IKEA offer the products at a reasonable
price. So by all these surveys IKEA choose its first Indian store in Hydrabad .
on 9 August 2018 at a cost of RS700 cr. IKEA is going to have 7500 products
for Indian market out of which 800 products cost will be less than 3$ or RS 200.
Out of 7500 ,20% of products are locally sourced and 1000 are made in India.
It also has opened a 1000 seater restaurant which is the largest of it globally.
After the first week of its opening it saw an average of 28000 visitors per day.
Nearly 4 million people visited IKEA Hyderabad store. It has made an
investment of RS 3000 cr to open ware houses in Mumbai, Bengaluru, and
Delhi. IKEA has opened its second store in Mumbai with offline and a little
online market. IKEA Mumbai through its Mumbai store is going to enter online
market in India. As per the company, its third offline store will be opened in
Bangalore. IKEA has partnered with Urban clap for assembling of furniture in
India. The company is going to have 25 stores by the year 2025 at a cost of RS
10500crore or $ 2 billion, in cities such as Ahmedabad, Surat, Pune, Chennai,
and Kolkata.
SWOT
1 STRENGTH-
Worldwide presence
Brand image
Affordable products
Excellent product design
Leading brand with strong financial position.
2 WEAKNESS-
Weak position in Asian markets.
Demographic design concept nit a major source of competitive advantage.
Difficult to balance between low price and quality product.
Limited customization.
3 OPPORTUNITIES-
Business opportunities in emerging market.
Adding premium quality products.
Increasing demand for sustainable products at low price.
4 THREATS
Increase in demand of premium products.
Increased competitive pressure from the rival brands.
Change in customer preferences.
Competitors of IKEA in India-
1 Pepperfry ( India) .
2 Godrej.
3 Local furniture manufacturers.
4 Walmart
5 Amazon( Rivet Stone and Beam)
6 Urban Ladder( online furniture seller).
PESTEL Analysis
Challenges in India
1 Return on its investment
2 Local furniture makers
3 DIY culture
4 Walmart
5 Finding space for large stores
6 Large Stores within the city.
7 To create good image in the eyes of Indian customers due to its low-cost
products.
8 Legal challenges for entering market.
Strategies followed by IKEA
1 Moderate price of product – the price of products is neither at low cost or at
too much high price.
2 Stores are a destination- with the increase in e commerce business the
customers need discounts to come to stores for shopping.
3 Hitting the right demographic- Ikea resonates with young people and has
products with good appearance.
4 Solving the worst part of buying furniture- Ikea creates the products which
are nicely designed as per current trend, and customer can dispose the
product when becomes of older trend or there is a change taste of customer.
5 it makes a in depth study of customers taste and preferences.
Strategies
Competitive Advantage
1 Cost effectiveness.
2 Good service.
3 In depth knowledge of customers taste and preferences.
4 High quality of design.
5 Different varieties of products.
6 Good Brand image.
7 IKEA has separate team which develops new products, updating and
promoting technological development.
8 The stylish products of IKEA makes it unique.
9 Recycling the left over materials.
10 Flat packaging system of furniture.
Issues for entering Indian market- The Swedish based furniture maker IKEA
faced problem with the Investment policies of India govt. For entering into
Indian market it was required to have a joint venture with any Indian firm. IKEA
also Faced issues resulting to the acquisition of land for its stores in densely
populated cities ,its was difficult to find huge place for its store at a low cost
without the support of government.
. IKEA investment in India was limited to a certain extent
Why IKEA entered the Indian market-
