Business Model and Competitive Strategy of IKEA in India

Running head: COMPETITIVE STRATEGY
IKEA INDIA
Competitive Strategy
5/27/2019

COMPETITIVE STRATEGY 1
Executive Summary
The intent of this report is to discuss the business strategy of IKEA to enter the Indian
market. The paper has provided th4e detailed analysis of the case study of IKEA which is
comprised of representing the challenges that were faced by the company and strategies it
adapted to grow in the market. From the analysis, it has been analyzed that the key
challenged that was experienced by the company was mandatory sourcing of 30% for
MSMEs, which was resulting in huge investment by the company. IKEA was not ready to
follow this mandatory policy so it convinced the government to do some changes in the
policy. Not just this, company also facing challenges in getting the physical land for the
business and as a result, it established a business in the suburban locations.

COMPETITIVE STRATEGY 2
Table of Contents
Executive Summary...................................................................................................................1
Introduction................................................................................................................................3
Overview of Case...................................................................................................................3
Identification of Strategic issues............................................................................................5
Relevant theoretical concept..................................................................................................7
Conclusion..................................................................................................................................9
References................................................................................................................................11

COMPETITIVE STRATEGY 3
Introduction
Every business requires a strategy that can outline the common goals of the company. A well-
planned strategy of the business is important for the sustainability and success of the
business. Without any strategy, a business can lack in efficiency, profitability, and direction
(MacLennan, 2010). An effective strategy of the business does not just determine the
organization's goals, but it also shapes the reasons for these objectives and the means through
which company plan to attain them. In addition to this, the business strategy enables to
evaluate the growth and performance of the company against the planned goals (Spender,
2014). The intent of this report is to analyze the case study of Ikea India and identify the key
strategic issues it experienced while taking entry in the market and after establishing the
business in India. After the analysis, the report is discussing the theoretical concepts applied
by the company in order to overcome the issues and challenges it experienced in its business
journey in the Indian Market.
Overview of Case
The topic of the case study is the business model and competitive strategy of Ikea in the
Indian market. Ikea is the private company handled by the Kamprad family. Company is
known worldwide for its designing and selling ready to assemble accessories, home
appliance, and furniture. The company has a humble beginning in the year 1943, however, it
became the largest furniture retailer across the world by 2000. The Company is expanding its
business and experiencing on-going growth in the industry from 2001 (IBS Center for
Management Research, 2014).