Competitive Strategy Analysis Report: IKEA's India Market Entry

This report provides a comprehensive analysis of IKEA's competitive strategy for its market entry into India. It begins with an introduction to competitive dynamics and the report's focus on IKEA's approach. The report examines IKEA's history, development, and growth, highlighting its organizational structure and the roles of operations and franchising. It identifies IKEA's internal strengths, such as its clear vision, cost leadership, and product customization, as well as external factors using Porter’s Five Forces model and life cycle models. The report evaluates IKEA's SWOT analysis, corporate-level strategy (mission, vision, and goals), and business-level strategy (cost leadership). Furthermore, it analyzes the company's structure and control systems, concluding that IKEA has successfully adopted a corporate strategy focusing on cost leadership to attract consumers and establish a strong market presence in India. The report also includes relevant references.

COMPETITIVE
STRATEGY

Table of content
 INTRODUCTION
 MAIN BODY
 CONCLUSION
 REFERENCES

INTRODUCTION
 Competitive Dynamics can be defined as those actions
which are being taken by company in order to gain
competitive advantage. In this company are engaged in
designing those strategies that assists them in establishing
their business in new and emerging market.
 Present report will lay emphasis on competitive strategy
taken by IKEA to move in India. IKEA is a furniture retail
company who is been headquartered in Germany.
 Present report will lay emphasis on company’s history,
development and growth.
 It will also lay emphasis on internal and external strength of
firm. Assignment will also provide detail about the key
barriers which has been faced by them. Study will also
evaluate corporate level strategy adopted by IKEA

company's history, development, and
growth
 IKEA is a privately held company, they are designing
and selling furniture, accessories and appliances.
 Company has followed complicated corporate
structure in which their main components were
operations and Franchising.
 Operation department was being involved in
managing and designing furniture’s and accessories.
Franchising was being done by private company
known as Inter-IKEA system (Hagber and Sterner,
2019). They have a tight control over IKEA
operations.

Identifying company’s external and
internal weakness
 Strength: IKEA has a clear vision, they are
providing consumers with low price and higher
quality furniture products and accessories.
 Company is also involved in providing a
concept in an array of products which can be
collected by consumers and customized, this
can assist consumers in saving huge amount
of cost. This has helped firm in attracting large
number of customers (Marsh, Kanngiesser
and Hood, 2018).
 There main focus is on creating cost
leadership, that has made them world’s best
furniture retailer. Raw material and labour was
founded by company as lower prices

Analyzing the external environment
 Porter’s five forces model
 Threat of new entrants: It is really high as the Indian
market is been controlled by Dotcom who are engaged
in creating issues for physical shops, they are engaged
in providing customised furniture’s to local people
(Vahlne and Jonsson, 2017).
 So IKEA needs to think about a strategy which can be
used by them to overcome the threat of new entrants,
as this can lay impact on their profitability and revenue
aspects. Company also needs to increase quality of
their products by lowering down their cost. They must
can also engage in diversifying their accessories range.

Life cycle model
 Introduction: The first stage is introducing the
product in emerging market. It has been
analysed that IKEA is going to produce
sustainable furniture which they are going to
sale in India. In this stage firm will explore the
demand of product in market
 Growth: At this stage IKEA can see growth of
furniture. They will see increase in sales for
furniture, rising demand and also increase
profitability. At this stage company can lead the
market conditions. This is the stage where they
can earn revenue and work on growth of firm.

Evaluate swot analysis
 The company internal and external factors will
have impact on company sales because company
in selling the products to customers at low prices.
Organization is providing the products to
customers which are high quality products and
accessorizes.
 On other side IKEA is operating in several
countries which will increase sales but quality of
products is compromised. It has analyzed that cost
of labor and raw material is high in some countries
and this is having impact on company profits.

Analyze corporate level strategy
 Company corporate levels strategy will include
the organization mission and vision goals. IKEA
has vision of create better life for many people. It
is reflecting about the business idea of well-
designed home furnished products which have
been provided to customers are economic prices.
 IKEA mission statements is offering wide range
of products to customers and providing them well
furnished products at low prices. It will be
providing the strategy of implementing and
achieving the vision for long time. Company is
revolving around achieving the long term growth
which will be benefit for suppliers, customers and
employees

Analyze business level strategy
 Cost leadership strategy
 as the company has entered market of India
company is using low pricing strategy for
completing the work. In this company is
expanding the business other countries and
providing products at low prices which will
attract customers towards them.
 IKEA is focusing on affordability of product
to customer along with increasing the brand
value in India.

Analyze structure and control systems
 Company is working in effective way and it will
include company structure and culture and
politics. In a company power is among one
employee and other are working under.
 In IKEA also power is in one employee and
other are working under them. Power is
distributed among other employees which are
working in company at the high post. The high
post employers are controlling the employees of
company and every decision is depended on
them. Structure is supporting the other employees
but the suggestion of these employees are
accepted, and they are working in effective way.

CONCLUSION
 From the above study it has been summarized that IKEA has been engaged in
entering into India. They have adopted corporate strategy. Company has laid
focus on cost leadership, in which they have increased the quality and tried to
lower down cost of product and service.
 This has helped them in attracting more consumers towards them.
 It has helped them in establishing their market in India. It has helped company
in increasing their profit as well as revenue. They have also engaged in
targeting upper middle class people who have knowledge of western furniture.
This has helped them in creating consumer base.

REFERENCES
 Vahlne, J.E. and Jonsson, A., 2017. Ambidexterity as a dynamic capability in
the globalization of the multinational business enterprise (MBE): Case studies
of AB Volvo and IKEA. International Business Review.26(1). pp.57-70.
 Hagberg, H. and Sterner, H., 2019. A study about possible digitalization of a
product development process: A business case at IKEA of Sweden.
 Marsh, L.E., Kanngiesser, P. and Hood, B., 2018. When and how does labour
lead to love? The ontogeny and mechanisms of the IKEA effect. Cognition. 170.
pp.245-253.