Competitive Strategy Assignment - IKEA

Competitive strategy

EXECUTIVE SUMMARY
Plans that guide commercial transactions which take place between organisations in
different countries is known as international business strategies. It allows the firm to sell a
standardised product worldwide.
Ikea is a Swedish multinational retail company that designs and sells ready to assemble
furniture. It has its own restaurants all over the world and its taste is cross culture. Recently it has
shifted to Hyderabad, India in 2018. For this the company has adopted international strategies to
hold its place in the country for longer period. The following report will cover strategies adopted
by them for expansion. Apart from this it will describe challenges faced and steps taken to
overcome those problems.

TABLE OF CONTENTS
MAIN BODY...................................................................................................................................1
Ikea's first store in India.........................................................................................................1
Ikea applied following international strategies in India for the expansion of market:...........1
Consumer preference in India................................................................................................3
Difficulties to compete in India with intense low cost competition.......................................3
The company will Strike a balance between low price and quality using internal strategies 3
Difficulties faced by Ikea in India..........................................................................................4
Ikea made attempts to overcome challenges faced by it........................................................4
Local competition and steps taken to defeat them..................................................................4
Will Ikea will succeed in India?.............................................................................................5
Plans for Ikea's success...........................................................................................................5
CONCLUSION................................................................................................................................5
REFERENCE...................................................................................................................................7

MAIN BODY
Ikea's first store in India.
IKEA, world's largest furniture retailer company which came to India on 9th August 2018
in Hyderabad's Hitec City. The company expected its store to attract 7 million visitors annually.
It has been determined that in India, Ikea will look to sell products according to the needs of
local market. It will offer pressure cookers along with its iconic Billy bookcases. The
organisation has conducted big research on how its product will be received in India. Its stores
are situated on the edges of cities, but it doesn't take it as a problem. It is exploring more Indian
natural fibres as part of its international plans for more sustainable raw materials (Alänge,
Clancy and Marmgren, 2016).
IKEA which is well-established and lucrative brand revolutionised its supply chain
operations and optimized its products in cost effective manner. Ikea has compelling and
competitive high quality with low pricing products’. Main aim of Ikea is to provide functional
and trendy products which are manufactured in cost-efficient manner so that common public
could afford them. In India, Ikea started its three-step retail strategy. Firstly, it will build brand
name in India by large formatting of stores. Secondly, it will adopt e-commerce strategy. Lastly,
it will experiment with new market formats. Their first step is to start small and pop-up stores
and will further try to explore various parts of the country. Ikea wants to step up with quality
strategy at different workshops in metro cities (Burnett, 2017).
Ikea applied following international strategies in India for the expansion of market:
Supplier Network: Ikea regularly working for optimizing supply chain management and
developing products. It resulted in seeking vertical FDI. In India, it has been sourcing for its
stores and presently has 48 suppliers. With these suppliers they support entrepreneurship and
innovation that helps in creating competitive capacities and invest in the advanced technologies
(Govind, 2017).
Low Cost Strategy: Ikea cuts costs so that it could compete with its competitors in market. They
accept challenges then they keep an eye on its price and then cut down their prices to half. Thus,
regulations placed by government, foreign retailers are restricted to open stores in various
markets. Many laws were in favour of domestic entrepreneurs who started their operations and
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