How Ikea of Eweden Got to India - Case Study

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Global Perspectives
Case Study: How Ikea of Sweden Got to India

By the team:
Ms. Valerie COSTE (France)
Mr. Amaury BOULANGER (France)
Ms. Katia BASKOVA (Russia)
Ms. Eugenia TEUSKKINA (Russia)
Mr. Brian WICK (Canada) President of Brooklin Bulletin Signs and University of Tampere, FINLAND, 27th November 1998
Executive summary
• How will be the IKEA’ products and services into the Indian market? What adjustments are or will be necessary to entry in the Indian market of furniture? ( culture, competition, currencies, marketing and management)

What threats from local competition should IKEA take into account and how can these threats be counteracted? What are the IKEA strategic global alternatives and what will be the future prospective? [pic]

Content of the report
I – The regulatory environment:
A – Political system
B – Legal system
C – Cultural challenge
D – Economic system
II – Competitive environment:
III – The internationalization of IKEA:
A – Alternative entry strategies
B – Expansion by franchising
C – Supporting organizational structure
D – Balance of autonomy and strategic direction IV – International financial market:
A – The foreign exchange market
B – Currency options and future
V – IKEA financial strategy:
A – Joint Ventures
B – Profits
VI – IKEA marketing strategy:
A – Where do the target customers live? Where to sell? B – What to sell?
C – How much does it cost?
D – Promotion
VII – IKEA management strategy:
A – Cost leadership as a part of the management process B – Differentiation strategy
Our references
Appendices – Ikea's timetable

If retailers are to succeed in an overseas market, they must not only master the traditional skills of market segment cultural and economic traditions of the host country. Ikea Svenska AB, founded in 1943 is the world's largest furniture retailer that specializes in stylish but inexpensive Scandinavian designed furniture. It has 128 fully-owned stores in 26 countries, visited by over 108 million people yearly, and worldwide sales of about $5.4 billion in 1994. Ikea's success in the retail industry can be attributed to its vast experience in the retail market, product differentiation, and cost leadership. The company is, perhaps, one of the World's most successful multinational retailing firms operating as a global organization based on its unique concept that the furniture is sold in kits that are assembled by the customer at home. Ikea's mission is to offer a wide range of home furnishing items of good design and function, excellent quality and durability, at prices so low that the majority of people can afford to buy them (IKEA 1994). The company targets the customer who is looking for value and is willing to do a little bit of work serving themselves, transporting the items home and assembling the furniture for a better price. The typical Ikea customer is young low to middle income family. I – The regulatory environment:

A – Political system:
A recognized political party has been classified as a National party or a State party. If a political party is recognized in four or more states, it is considered as a National party. Congress, Bharatiya Janata party, Janata Dal, communist party of India and communist party of India is the prominent National party in the country. Congress Party ruled the country and it came to power. Also, tenth Lok Sabhas (The Parliament) has been constituted so far, on 10th July 1991. But even the states, the regional parties or the non-Congress parties gained importance over the years. But we have to make a point in saying that in depends on the...
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