Case Study, IKEA

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Complete the Case Study,IKEA Finally Opens in India, Minus the Meatballs. (This can be found on p. 252) Answer questions 1, 3, and 5.
Case Questions:
The IKEA company has waited a long time to get into India. Trace the events and challenges that have led up to this point.
What are the core values and strategy that IKEA wanted to implement in India?
How has IKEA been able to localize its strategic implementation in India?.

Sample Solution

IKEA’s Long Road to India: Tracing the Events and Challenges

IKEA, the world’s largest furniture retailer, has been trying to enter the Indian market for over a decade. The company’s first attempt to set up shop in India was in 2006, but it was met with a number of challenges, including regulatory hurdles and opposition from local businesses.

In 2012, IKEA finally received approval from the Indian government to open stores in the country. However, the company faced further delays due to problems finding suitable land and securing the necessary permits.

It was not until 2018 that IKEA finally opened its first store in India, in the city of Hyderabad. The store was a huge success, attracting over 4 million visitors in its first year. IKEA has since opened two more stores in India, in Mumbai and Navi Mumbai.

Challenges faced by IKEA in entering the Indian market:

  • Regulatory hurdles: India has strict foreign investment laws, which made it difficult for IKEA to set up shop in the country. The company also had to get approval from the government to sell food and beverages in its stores.
  • Opposition from local businesses: Indian businesses were concerned that IKEA’s entry into the market would hurt their sales. They also lobbied the government to impose restrictions on IKEA’s operations.
  • Difficulty finding suitable land: IKEA needed to find large parcels of land to build its stores. However, suitable land was scarce and expensive in India.
  • Securing permits: IKEA had to obtain a number of permits from the government before it could start construction on its stores. This process was often time-consuming and bureaucratic.

IKEA’s core values and strategy in India:

IKEA’s core values are based on the idea of “democratic design.” This means that IKEA products should be well-designed, functional, and affordable for everyone. IKEA also believes in sustainability and environmental protection.

In India, IKEA is focused on providing affordable and stylish furniture to the growing middle class. The company is also committed to sourcing products locally and creating jobs in the Indian economy.

How IKEA has localized its strategic implementation in India:

IKEA has localized its strategic implementation in India in a number of ways, including:

  • Pricing: IKEA has priced its products competitively to appeal to the Indian middle class. The company has also introduced a number of budget-friendly options.
  • Product selection: IKEA has adapted its product selection to meet the needs of Indian consumers. For example, the company sells beds with storage space, which is a popular feature in India.
  • Marketing: IKEA has tailored its marketing campaigns to the Indian market. For example, the company has used Indian celebrities in its advertising.
  • Sourcing: IKEA sources many of its products from Indian suppliers. This helps to keep costs down and create jobs in the Indian economy.

Case studies of IKEA’s localization efforts in India:

  • Product design: IKEA has designed a number of products specifically for the Indian market. For example, the company sells a bed with storage space, which is a popular feature in India. IKEA has also designed a sofa that can be converted into a bed, which is ideal for small spaces.
  • Pricing: IKEA has priced its products competitively to appeal to the Indian middle class. For example, the company sells a basic bed frame for less than $50.
  • Marketing: IKEA has tailored its marketing campaigns to the Indian market. For example, the company has used Indian celebrities in its advertising. IKEA has also created campaigns that promote its commitment to sustainability and social responsibility.
  • Sourcing: IKEA sources many of its products from Indian suppliers. For example, the company sources its bamboo furniture from India. IKEA also has a program to train and develop Indian suppliers.

Impact of IKEA’s entry into the Indian market:

IKEA’s entry into the Indian market has had a significant impact on the furniture industry. The company has forced Indian furniture retailers to lower their prices and improve their quality. IKEA has also created jobs and boosted the Indian economy.

Conclusion

IKEA’s long road to India was marked by a number of challenges, including regulatory hurdles, opposition from local businesses, and difficulty finding suitable land. However, the company was able to overcome these challenges and open its first store in India in 2018. IKEA has since opened two more stores in India, and it plans to open more stores in the future.

IKEA has localized its strategic implementation in India by pricing its products competitively, adapting its product selection to meet the needs of Indian consumers, tailoring its marketing campaigns to the Indian market, and sourcing products from Indian suppliers.

IKEA’s entry into the Indian market has had a significant impact on the furniture industry. The company has forced Indian furniture retailers to lower their prices and improve their quality. IKEA has also created jobs and boosted the Indian economy.

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