IKEA's Competitive Strategy for the Indian Market

Competitive Strategy
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Table of Contents
Introduction......................................................................................................................................3
Business Strategy.........................................................................................................................4
Corporate Strategy.......................................................................................................................6
Acquisitions and Structure...........................................................................................................7
International Strategy to expand business activities in India.......................................................8
Cooperative Strategy...................................................................................................................9
Conclusion.....................................................................................................................................10
References......................................................................................................................................11
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Introduction
To survive in the tough competitive business environment it is highly important for every
business organization to develop strong strategies and plans. This report is based on IKEA which
is largest furniture retailer founded in the year 1943. IKEA Company is founded by Ingvar
Kamprad who is 17 years old in Sweden. This company has a presence in around 44 countries
like Russia, US, UK, Japan, Australia, China and the EU region all over the world. IKEA
provides a great shopping experience for its customers with outstanding quality, low prices and
modern design of furniture. This company wants to enter the Indian market for which it
examines the current political, suppliers, environmental, government, economic and technology
condition. It is necessary for this company to develop an international corporate level strategy in
order to face several challenges. To achieve set goals and objectives it is important for IKEA to
review market segment in India. In this report business strategy, cooperative strategy,
international strategy, corporate strategy, acquisition, and structure has been examined.
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Business Strategy
To achieve high growth and success in the large competitive business environment it is necessary
for IKEA Company to develop a great business strategy which includes pricing policy, design,
and quality of furniture. To compete with competitors it is very much important for IKEA
Company to consider all factors such as environmental, economic, social, technology and
political that can impacts its operations and functions in Indian Market (Scholes, 2015). With the
help of business, Strategy Company can achieve better outcomes effectively in the new
marketplace. For increasing revenue and sale of furniture, this company gives high attention to
customer-based approach while developing business strategy. This will help to face several
challenges in a most appropriate manner to achieve high growth.
Demographics business strategy: In the business strategy IKEA Company consider
demographic factors which include population size, income, family size etc which can influence
its performance. In the business, Strategy Company includes all these factors that help in
developing a good business strategy to maintain long-term growth in the new marketplace
(Scholes, 2015). It is necessary for this company to divide its customers on the basis of
demographics for achieving set goals and objectives in the Indian market. With the help of
market, Segment Company can achieve better outcomes in certain time.
Competitors: It is very much important for this company to examine the competitors in the
market before entering the market for achieving high success and growth in the particular
country. By examining the competitors and market condition of India IKEA company can
develop a great business strategy to penetrate into the market to enhance sales of furniture.
Distributor and Supplier business strategy: IKEA Company operates its business activities in
all over the world to increase the level of profitability and productivity. To achieve success in
Indian and other countries market it is necessary for the company to analyze the distributor and
suppliers that are a key element in the supply chain (Verbeke, 2013). There must be proper
distributor channel for reaching target customers.
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Political condition: By identifying current political system like foreign trade policies, taxation
policies etc of India IKEA Company can develop great marketing strategies and plans for
operating its functions more efficiently (Verbeke, 2013).
Technological strategy: In today’s tough competitive business environment technology play
very important role in accomplishing set goals and objectives. By adopting advanced technology
IKEA can easily communicate about its products and services to its target customers.
Environmental strategy: It is essential for IKEA Company to examine environmental policies
of India because it plays an essential role in the manufacturing process of furniture (Keyes,
2016). To attain set target company require raw material for producing outstanding quality of
furniture.
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Corporate Strategy
With the help of cooperative strategy, a company can easily manage risk and operational
activities to achieve set goals and objectives. It is a form of hierarchy strategy which is used by
IKEA Company to increase revenue and sale of furniture in Indian market effectively. The
corporate strategy defines the goals of the company and provides a way to accomplish them in a
certain time.
IKEA can gain huge competitive advantages by taking help of cooperative strategy in business
activities that provide right way to achieve set goals and objectives (Nagle, et. al., 2016). For
attaining set target this company required raw material and great supply chain to increase its
sales and revenue in the tough competitive marketplace.
Diversification strategy: It is basically corporate strategy which is used by IKEA Retailer
Company to enter in Indian market which helps in operations and function in the new
marketplace for attaining the set standard. With the help of diversification strategy this company
can easily examine the current market condition of the Indian market, needs wants, requirement
and expectations of customers from furniture Retailer Company according to which IKEA
regulate its operations. This strategy helps in new product development through which this
company can produce a different range of furniture design for customers (Nagle, et. al., 2016).
With the help of this strategy, IKEA can examine the current demand for its products in the
market that helps in controlling unnecessary and risk factors that can impact negatively on its
performance. For increasing sale and revenue it is very much important for IKEA Company to
select different locations in a different city so that customer can easily reach to its products and
services (Twarowska & Kąkol, 2013). To manufacture great quality and design of furniture
availability of raw material is essential. In diversifications strategy, this company gives high
attention to customer-based approach for satisfying wants and needs of customers effectively.
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Acquisitions and Structure
For marinating long-term growth and success in today’s tough competitive business environment
it is necessary for IKEA Company to follow good organizational structure as it directly
influences its performance. To enhance the level of sales and growth at global scale company
take help of acquisition and merger that provides a high return on investment. This company can
acquire any famous and great retailer shop of furniture in the Indian market to build a strong
customer base (Twarowska & Kąkol, 2013). In a competitive market, a company can survive
easily in a new market by acquisition strategy.
Valuation of acquisition: It is necessary for IKEA Company to identify the need for acquisition
for business expansion in the new marketplace for accomplishing set goals and objectives. There
are so many strategies and plans are developed by the company for evaluation and valuation of
acquisition in a proper way for generating high income (Nagle, et. al., 2016). The main purpose
of the acquisition is to increase market share and number of customers that help to achieve high
success and growth in Indian market.
With the help of acquisition, IKEA Company can overcome the problem of availability of raw
material, supply chain, and different issues. It is necessary for the company to offer a great
quality of furniture to Indian customers at a low price to fulfill their current requirement and
expectations (Nagle, et. al., 2016). Organisation structure impacts positive and negatively on
performance and position of the company in the Indian market so it is a major responsibility of
management to develop a great structure which must be followed by every employee to deliver
high-quality products and services to customers. This will help to expand business operations at
the global market that increase sales and revenue of the IKEA Company effectively.
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International Strategy to expand business activities in India
It is necessary for IKEA Company to develop good marketing strategies and plans for entering
the Indian market. The company can enter into Indian market through different ways such as
acquisition, subsidiary, licensing, exporting and strategic alliances that help to increase sale and
revenue of the company (Kandzija, et. al., 2014). The main purpose of this company to enter into
a new market is to generate high income and sale of its readymade furniture (Johnson, 2016).
With the help of international strategy, IKEA Company can easily expand business activities and
operations in the new marketplace.
The company faces several challenges in Indian market that can influence its performance and
position for which it develops great strategies and plans. With the help of acquisition concept,
IKEA Company can easily manage and operate its functions in the Indian market. It is essential
for this company to use effective supply chain and distribution channel for increasing sale and
revenue in the new market (Armstrong, et. al., 2015). It is very difficult for IKEA company to
understand the current preferences and requirement of Indian customers with the help of
acquisition strategies this company can easily provide great quality of products and services
according to their choices. By developing effective pricing strategies, great supply chain and
different distributor channel IKEA Company can generate high income and sales in the Indian
market.
Expansion of operations and function at international level: By taking help of acquisition
method IKEA Company can easily expand its business activities and operations in Indian Market
for achieving set goals and objectives. It is necessary for management to develop effective
strategies and plans to implement the different concept in a proper way (Verbeke, 2013). IKEA
Company is largest furniture Retailer Company which provides high quality, great design and
different range of furniture to customers to make their shopping experience good. It is highly
important for this company to take help on international strategies for expanding business
operations in Indian market because it is completely different from other countries. To
marinating its performance and position in the market it is necessary for the company to
understand market condition and preferences of customers from the company (Verbeke, 2013).
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Cooperative Strategy
With the help of cooperative strategy, IKEA Company can cooperate with any other large
retailer company in India to achieve high success and growth. It is the great strategy of the
company that helps in increasing the market share and customer base in the new market. This
will also improve source of the company to perform a different function and business activities
in new marketplace effectively for accomplishing set goal and objectives. Cooperative strategy
helps IKEA Company to manage and control different functions to fulfill the current requirement
of customers and market. IKEA can improve sourcing requirement from the government of India
by taking help of cooperative strategy in which company comes together with any other retailer
firm in the country to fulfill customer's needs. This company provides readymade furniture and
concept of self-service which can be promoted through working with any famous company
(Verbeke, 2013).
It is highly important fro IKEA company to identify the taste, preferences, wants and needs of
Indian customers for marinating long-term growth and success in the country. With the help of
partnership concept, IKEA Company can easily attract a huge number of customers towards its
DIY products and readymade furniture. By working with any existing larger retailer organization
in India IKEA company can easily understand the needs of customers. It is highly important for
this company to develop great strategies and planning for attracting a huge number of customers
toward its products and services (Armstrong, et. al., 2015). IKEA Company provides outstanding
services, great quality and design of furniture to the customer to make their shopping experience
good.
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Conclusion
By examining this report it has been concluded every company needs to adopt a great
competitive strategy to maintain long-term growth and success in the new marketplace. In
today’s competitive business environment company can gain huge competitive advantages and
various growth opportunities by taking help of strong corporative and business strategy. This
report is based on IKEA Company which is largest furniture retailer that operates its functions in
all over the world in different countries. For entering into Indian market this company uses a
great competitive strategy that helps to identify current requirement of customers, government
position, market condition and competitors who can give high competition. To achieve set goals
and objectives it is highly important for IKEA Company to give high attention to an international
strategy for entering the Indian market. To increase the level of profitability and productivity this
company gives high attention to quality, design and outstanding services that help to enhance
satisfaction level of customers.
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References
 Armstrong, G., Kotler, P., Harker, M., & Brennan, R. (2015). Marketing: an
introduction. Pearson Education.
 Johnson, G. (2016). Exploring strategy: text and cases. Pearson Education.
 Kandzija, V., Filipović, D., & Kandžija, T. (2014). Impact of industry structure on
success of mergers and acquisitions.
 Keyes, J. (2016). Implementing the IT balanced scorecard: Aligning IT with corporate
strategy. CRC Press.
 Nagle, T. T., Hogan, J., & Zale, J. (2016). The Strategy and Tactics of Pricing: New
International Edition. Routledge.
 Scholes, M. S. (2015). Taxes and business strategy. Prentice Hall.
 Twarowska, K., & Kąkol, M. (2013). International Business Strategy-reasons and forms
of expansion into foreign markets. In Management, knowledge and learning International
conference (pp. p1005-1011).
 Verbeke, A. (2013). International business strategy. Cambridge University Press.
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