Competitive Strategy Analysis of IKEA for Indian Market Entry

This report provides a detailed analysis of IKEA's competitive strategies within the Indian market. It begins with an introduction to IKEA, a multinational furniture retailer, and its global presence. The report then delves into IKEA's business strategy, emphasizing the importance of adapting to the Indian market through effective brand positioning and competitive strategies. The core of the analysis focuses on various strategic approaches, including cost leadership, corporate strategies (growth, stability, and renewal), acquisition strategies, and international strategies (multi-domestic, global, and transactional). Furthermore, the report examines cooperative strategies, such as collaborations with other furniture brands in India. The conclusion summarizes the key strategies discussed, highlighting their significance in helping IKEA achieve its goals and establish a strong presence in the competitive Indian business environment. References are provided to support the analysis.

Competitive Strategy
IKEA

Table of Content
• Introduction
• Business Strategy
• Corporate strategy
• Acquisition and structure
• International strategy
• Cooperative Strategy
• Conclusion

Introduction
• IKEA is a multinational Netherland based Swedish Company. It
is the largest furniture retailers across the globe.
• Company is present in more than 44 countries across the
globe including Russia, US, UK, Japan, China, and Australia.
• Organization was founded in 1943 by a 17-year-old Ingvar
Kamprad (Ikea, 2017).

Business Strategy
• Business strategy is set of systematic approaches for an
organization in order to attain desired goals and objectives.
• In relation with the IKEA operations, organization has
amended its policies, standards and product offerings as per
the target audience in Indian market.
• This will help the organization to develop an effective
competitive strategy along with effective brand positioning in
the target market (Hilman & Kaliappen, 2014).

Cost leadership theory
• In terms of business strategy, cost leadership strategy is an
effective tool through which organization could attain
competitive advantage by reducing its cost of production or by
lowering its profit margins.
• This strategy is driven by organizational efficiency, size, scale
and scope. Thus, major motive of cost leadership strategy is to
produce high standardised products and services at one hand
and on the hand, it is required for the organization to reduce
its cost of production with the help of advanced and effective
measures (Grant, 2016).

Corporate Strategy
• There are mainly three types of corporate strategy:
• Growth: Growth strategy is a strategy through which
organization expands its business in international or national
market with same products and services or with new products
and services (Purce, 2014).
• Stability: In relation with stability, IKEA will continue to serve
its existing clients by maintaining the same sort of quality in its
products and services.
• Renewal: This strategy will be used by IKEA when their
performance in the Indian market will start decline.

Acquisition and Structure
• In order to set up an effective image in the Indian market, IKEA
could adopt effective market entry options such as joint
venture, merger and acquisitions, etc.
• Under this strategy, organization will acquire a small or large
entity engaged in the furniture business or in other industries.
• This strategy will help the organization to attain its desired
goals and objectives along with acquiring an effective market
share in the competitive business environment in Indian
market (Barattieri, Borchert & Mattoo, 2016).

International Strategy
• There are three types of international strategies such as multi
domestic, transactional and global.
• Multi Domestic: Multi domestic strategy is useful for those
companies who produces and delivers the products as per
local public’s preferences.
• Global: This strategy is a complete opposite of multi domestic
strategy. Under this strategy, organization does not amend its
products as per target market requirements.
• Transactional: Transactional strategy is the mixture of growth
as well as multi domestic strategy. With the help of this
strategy, organization will be able to match up with the target
audience’s demands and wants along with enhancing
efficiency.

Cooperative Strategy
• Cooperative strategy has bene adopted by large number of
firms and it is attempt by firms to attain its desired goals and
objectives through cooperation with other firms in relation
with the partnerships and strategic alliances rather competing
with them.
• With regards to this, IKEA could also collaborate with large
furniture brands in Indian market. Some of the large
companies in Indian market are Durian, Godrej Interio, Zuari
Furniture, etc.

to be continued…
• IKEA will be able to enhance its reachability in the target
market along with gaining competitive advantage.
• Along with this, organization is required to make its product
offerings unique, distinct as well as effective from the existing
companies in order to make its effective position in the target
market.
• With the help of these strategies, organization will be able to
attain effective position in the emerging market conditions of
Indian market.
• With this regard, organization will acquire the leading position
in the target market along with attaining the desired goals and
objectives (Wu, et. al., 2014).

Conclusion
• In this report, IKEA’s competitive strategies have been
discussed in relevance with attainment of competitive
advantage in the Indian market.
• Organization entered into Indian market in 2003 but since
then, they were not able to set up an effective image and to
enhance their performance, set of effective strategies have
been discussed.
• With the implementation of these strategies, organization will
be able to accomplish its goals and objectives so that it could
make its significant place in the competitive business
environment.

References
• Ikea. 2017. About IKEA. [Online]. Accessed from: http://ikea.in/about [20th May
2018].
• Hilman, H. and Kaliappen, N., 2014. Do cost leadership strategy and process
innovation influence the performance of Malaysia hotel industry?. Asian Social
Science, 10(10), p.134.
• Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John
Wiley & Sons.
• Purce, J., 2014. The impact of corporate strategy on human resource
management. New Perspectives on Human Resource Management (Routledge
Revivals), 67.
• Barattieri, A., Borchert, I. and Mattoo, A., 2016. Cross-border mergers and
acquisitions in services: The role of policy and industrial structure. Canadian
Journal of Economics/Revue canadienne d'économique, 49(4), pp.1470-1501.
• Wu, D., Zhou, L., Cai, Y., Hu, R.Q. and Qian, Y., 2014. Energy-aware dynamic
cooperative strategy selection for relay-assisted cellular networks: an
evolutionary game approach. IEEE Transactions on Vehicular Technology, 63(9),
pp.4659-4669.