The aim of this report is to analyze ‘IKEA’ as a company and produce a tactical plan. To make an evaluation on the international marketing activities of the IKEA through the use of various marketing techniques including PEST and SWOT analysis and will conduct critical analysis of the existing international marketing strategies and issues facing ‘IKEA’ and how they can enter into India and Indian market, and will discuss about possible recommendations and solutions that the company can should employ and how these should be applied to enter new market and run the business with a new strategy followed by the conclusion.
1.1. Overview of the company
IKEA was founded in Almhult, Sweden, in 1943 by ‘Ingvar Kamprad’. Four years later, a mail order catalogue was introduced and, in 1948, furniture and home furnishings were introduced to the mail order range of the IKEA product range, and IKEA began to design its own furniture. The company motto is: "to create a better everyday life for the many people." On March 23rd, 1963 the first store outside Sweden was opened in Asker, Norway. IKEA opened its other stores in Denmark, Germany, Australia, Canada, and Austria. In 1987 it opened its first store in the UK. Today IKEA is the leading furniture retailer in the UK with a 12.1% before MFI and DFS and the group owns 260 stores around the world, all of them operates under a franchise from INTER system B.V. today its turnover is 20.685 billions in euro, compared to 16.8 billions in 2008, IKEA did hold 2.5% shares of the global home furnishing retail market in 2006. IKEA represents an immensely popular, profitable and respected in the global furniture marketplace. (Barthelemy, 2011, pp. 81) Low prices are one of the main points of the IKEA concept and help to make customers want to buy from IKEA. This low price strategy is coupled with a wide range of well designed, functional products. IKEA’s products are for every lifestyle and life stage of its customers, who come from all age groups and types of households. This is vital in times when the retail sector is depressed, as it increases IKEA’s potential market.
IKEA is planning to enter the Indian market.
1. is India an attractive market for furniture?
2. What are the opportunities and barriers for IKEA entering the Indian market? 3. How could IKEA establish itself in India?
1.2 Country profile
• Geographic and Demographics
With a population of about 1.2 billion people, India is the 2nd most populated country in the world. By 2050, India is expected to overtake China and become the world's largest country in terms of population. This large population provides a huge consumer market. 51.0% of the total population are below the age of 25 in 2006. This demographic advantage makes India one of the youngest countries in the world, with a large and growing labor force that can be tapped to work in the foreign organizations that are increasingly shifting their activities to India.
India is the fastest growing economy in Asia Pacific region. Even in the global finance crisis, India 2009 real GDP growth rate was 7.9%. Although GDP declined 2% from 2008~20010, with property price falling as well as customer confidence and both trading and manufacture. The market for house wares and furnishings are expected to open up in smaller cities. There is likely to be increased numbers of brands, increased choice and increased demand for house wares and furnishings segment. The main force consumption should be 20~35 years old. That trends and demand for house wares and home furnishings were increasingly being driven by youths residing in urban India. Most young buyers would like to go to the newly developed organized retailing chains and chose the house wares and home furnishings most suited to their lifestyle. • Government