Drivers and Impact of Globalisation: IKEA's India Entry Strategy

This report provides a detailed analysis of the drivers and impact of globalisation on IKEA's market entry strategy in India. It examines the various factors that influenced IKEA's decision, including technological, political, market, cost, and competitive drivers. The report outlines IKEA's market entry strategy, focusing on the advantages and disadvantages of the wholly-owned subsidiary route. It further explores the bureaucratic and political challenges IKEA faced while gaining approval to enter India, highlighting how these challenges were overcome. Finally, the report offers recommendations for IKEA if it were to consider entering similar or different markets, providing a comprehensive overview of the company's globalisation efforts in the Indian context.

The Drivers and impact of
globalisation

CONTENTS
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................3
An overview of the drivers of globalisation for Ikea in relation to their entry into the Indian
market.....................................................................................................................................3
Analysis of growth and performance...............................................................................................6
Outline IKEA's market entry strategy for the Indian market and set out the advantages and
disadvantages of adopting the wholly-owned subsidiary route for entering the market........6
CONCLUSION................................................................................................................................7
a) Outline the bureaucratic and political challenges faced by IKEA when gaining approval to
enter India, and how these were overcome............................................................................7
b) Set out recommendations for if Ikea was to consider entering similar or different markets
................................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
An overview of the drivers of globalisation for Ikea in relation to their entry into the Indian
market
It is required for each and every business organisation to influence powerful and impactful
procedure to extend and expand their business structure in various nations. Globalization is a
particular factor that used to expand collaboration amongst individual and associations on overall
level. These exercises gives fitting development in tread, correspondence, monetary and money
related terms. In this system, a few associations snatching viable chances to extend their business
in a few nations and getting most extreme benefit and development. Ikea is a Swedish-
established multinational gathering who needs passage into Indian market. This association was
established in the time of 1943 by Ingvar Kamprad. Ikea essentially outlining, assembling and
offering furniture, kitchen apparatuses and home extras. This firm fundamentally connected with
eco-accommodating items that give successful favourable circumstances to them while broaden
their business exercises in a few nations. For them it is required to dissect market and clients
interest for their items and administrations before exhausting their business in India.
Ikea has more than 400 stores in around more than 45 nations however it is difficult to
enter in new market with a solid rivalry to existing associations. For a firm it is require to
distinguish particular components and territory of drivers for globalization as Government,
market, rivalry and cost. These variables has coordinate effect on singular firm and they are
mostly wild, so for this Ikea requires to influence impactful procedure to getting higher fitting
development from Indian to advertise. There are some different drivers of globalization are given
beneath as -
Drivers of globalization for Ikea
Following are certain drivers of globalisation which support IKEA to expand their
business activities properly so that effective and better outcome could be drawn in relation to
evaluate and gain better and supportive results in frame so that effectiveness and efficiency could
be maintain and manage in determined manner of frame.
Technological drivers – For a business association, it is require to actualize propel innovation in
their business system that edges an appropriate establishment for current globalization. These
elements rolls out proper changes and improvements in authoritative administrations on the bases
of client's prerequisite and their request also. Ikea is a notable association and for them it is

required to actualize development and digitalisation in their business technique to getting higher
upper hands effortlessly. These exercises consider innovative thoughts and musings that rolls out
legitimate improvements in items to pull in target clients effectively. In India, client needs
quality and interesting administrations at any cost however a portion of the purchasers require
reasonable items, so it is compulsory that supervisor of Ikea comprehend necessity of their
clients to give them higher fulfilment effortlessly. Firm can undoubtedly extend their further
administrations through online mode to get associated with various clients. Progress and present
day innovation in this area empower to create practical deliver by lessening additional wastages
and fields of firm. It can be a gainful variable for Ikea for fast development in Indian market.
These innovative drivers’ help to making web based business exercises of firm to extending their
treading procedure in viable way.
Political drivers – For Ikea, it is required to changed administrative run and treading
arrangements to lead in new market effortlessly. Through this they can manufacture legitimate
terms in their business approaches that guide to extend business exercises in a particular nation.
These are most critical factor that give viability to a few continuous activity of firm. For Ikea, it
is required to make legitimate terms with a few administrative experts that permitted remote
direct venture for enhancing appropriately in a few nations. WTO (World exchange association)
is worldwide association working expert that aides in economy shaper and building principles to
diminish issues and clashes for differentiating arrangements. WTO give a few chances to
organized commerce understanding and reasonable exchange approaches by diminishing a few
changes and limit additionally cost effectively. For Ikea it will be useful to break down every
single control while growing their business in new market. Legislature of India required moral
exchange that can't end up suspicious for various standards. These exercises have coordinate
effect on monetary advancement and development also. By executing these moral thought in
firm, Ikea can without much of a stretch grow their business exercises in a few nations.
Market drivers – For a business association, it is required to examine market and client's request
to provide food them fitting administrations. These exercises gives distinctive chances to an
association. Through this, they can without much of a stretch make their own particular picture
and altruism in target advertise. For Ikea, it is required to assess distinctive promoting points of
view as pattern, rivalry and diverse prerequisite to give quality administrations to their clients.
Through this they can without much of a stretch form solid association with new clients who

amplifies association's development and pay. In another market, it can be an impactful system to
recognize clients have to make proper changes in them. In this, propel innovation give its own
commitment to create web based treading to amplify treading procedure of a firm in new market.
Principle goal of this procedure is to give higher fulfilment to clients on the bases of their
longing and need. In globalization methodology, it can decidedly to examine promoting
components and roll out attractive improvements effortlessly. Ikea is an extensive association
that outlining, assembling and pitching furniture and home apparatuses to clients. For them it is
required to roll out compelling adjustment and improvements to catch user’s eyes effortlessly
toward their administrations. Through this, they can make imposing business model in target
advertise.
Cost drivers – For a business association, it is require to utilize financially savvy procedure to
pull in target gathering of people effortlessly toward their administrations. These are the most
valuable technique that give distinctive favourable circumstances to an association. For Ikea, it
can be a powerful move to execute savvy methodology in their hierarchical system. In this they
have to investigate current position of market and further that offering by a few associations for
comparable item after this they needs to serve least cost of same administrations to draw in target
clients effortlessly toward their items. For this firm can receive computerized innovation that
lessen work cost and wastages to execute attractive cost of their working operations in supportive
manner.
Competitive drivers – For a business association, it is require to break down focused associations
who give comparative administrations to clients. Through this they can without much of a stretch
influence inventive and impactful procedure to construct their own picture in new to advertise.
For this, Ikea needs to dissect Indian market require and aggressive associations to make
powerful arrangement as indicated by them. For this they require to utilize change systems to
getting higher upper hands. There are various giants firm are already taking place in Indian
market which required to understand and estimate better in order to gain and derive better and
supportive outcome in nature of frame so that supportive evaluation get done in order to
maximise effectiveness and efficiency.

Analysis of growth and performance
Outline IKEA's market entry strategy for the Indian market and set out the advantages and
disadvantages of adopting the wholly-owned subsidiary route for entering the market
For Ikea, it is required to influence successful strategy or action plan while organization
will going to expand operations in a new and desire market area. These system depends on
economic situation of various nations. Organizations needs to get legitimate permit before using
their business in target showcase. There can be different components that impact in hierarchical
methodology, showcasing technique and cost of items. For IKEA, it is require to make new
market section technique by considering such factors as -
 Buying a new business – For a business association, it can be a particular move when
they broadening in new market. In this section, a strong and financial viable company
will going to purchase local company whom do not have sufficient fund and appropriate
resource to meet with customer’s requirement and demand. Through this they can
undoubtedly build up their own imposing business model in showcase. For this, Ikea
needs to oversee higher cost and supports to purchasing such firms effortlessly. Through
this they can get greatest benefit and development from target showcase.
 Licensing – This is a lawful and moral term of an association in which an association
exchange their rights to another firm to utilize their administrations effortlessly. It can be
a valuable promoting system in which Ikea can motivate chance to make their legitimate
offer in India. Permitting is utilizes for showcasing and creation administrations of an
association.
 Diversification – This is conventional strategy that give fast development to an
association. Through this can without much of a stretch grow repeatable plan of action in
a few areas to getting upper hands. For this organization needs to deal with their
administrations viably that ought to must be one of a kind and unique in relation to
others. Through this they can without much of a stretch client's eyes toward their
administrations. For instance Ikea can utilize these system to getting higher advantages
from Indian market.
 Joint venture – It is additionally a type of organization in which at least two hopefuls
share an assertion by their common comprehension to getting higher advantages
effortlessly. In joint wander hazard and benefits are typically share similarly on the bases

of accomplice’s commitment in firm. The greater part of the association share their vision
with others to getting higher upper hands effectively.
 Direct Exporting - For a business association, it is require to making impactful thoughts
and techniques that gives them higher advantages in less overhauling. In this procedure
coordinate sending out has its own commitment in which Ikea can offering their items
and administrations in target advertise by the assistance of wholesaler and middle person.
In this channel they take help of others to disseminate their administrations effectively in
target advertise.
CONCLUSION
a) Outline the bureaucratic and political challenges faced by IKEA when gaining approval to
enter India, and how these were overcome
IKEA likewise confront different difficulties while going into the market of INDIA. There
is a relationship in the middle of bureaucratic with political which has a branch of government
that has been considered as doubtful issue in regulatory process in India. There, political pioneers
are what is having a feedback against organization and some place they neglect to address up
difficulties of developing interest of complex welfare state as in view of inflexibility,
wastefulness and even regularly particularly having an execution of some dynamic approaches in
viable way. There are different fundamental difficulties which is being looked by IKEA amid
entering and a portion of those are as per the following:
Taxation Management: - In India Tax Policy is very not the same as other nation and despite the
fact that each organization needs to take after the standards and direction of government strategy.
Expense is considered as type of income of government. The gathered sum in addition utilized as
a part of the improvement of nation. Duty is structure is difficult to take after by organizations
and pay assesses in tremendous way.
Financial exchange: When a business is running at worldwide level at that point firm do
confront a noteworthy test i.e. monetary exchange. Administration of INDIA do change its
import and fare strategy for firms. In this way, INDIA is additionally concentrating on send out
rather at that point Import of items and administrations. It is required to have a better economy
structure that do assist nation with earning a decent measure of cash in awesome way.

b) Set out recommendations for if Ikea was to consider entering similar or different markets
It is expected, organizations to attempt distinctive thing while at the same time going into
various market, which do help them in confronting the different difficulties and a portion of
those are as:
• Political and bureaucratic arrangements should be seen so that as indicated by such
working structure is built up to become successful business venture in distinct nations and
countries.
• India is having a diverse Culture of working in contrast with different nations, which
should be taken as critical aspect by IKEA so individuals can be controlled by that as it
were.

REFERENCES
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