HI6006 Competitive Strategy: PESTLE Analysis of IKEA in India - Holmes

This assignment provides a PESTLE analysis of IKEA's business strategy in India, examining the political, economic, social, technological, environmental, and legal factors influencing the company's operations. The analysis highlights the impact of political stability, economic recessions, social cultural differences, technological advancements, environmental sustainability efforts, and legal regulations on IKEA's success and challenges in the Indian market. It emphasizes the importance of understanding local culture and adapting business strategies to ensure brand loyalty and sustainable growth. The case study also touches upon IKEA's efforts in environmental conservation and the need to maintain product quality to safeguard its reputation.

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IKEA IN INDIA

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Contents
PESTLE ANALYSIS OF IKEA......................................................................................................................3
POLITICAL FACTORS...........................................................................................................................3
ECONOMIC FACTORS.........................................................................................................................3
SOCIAL FACTORS................................................................................................................................3
TECHNOLOGICAL FACTORS................................................................................................................3
ENVIRONMENTAL FACTORS..............................................................................................................3
LEGAL FACTORS.................................................................................................................................4
Reference..............................................................................................................................................5

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PESTLE ANALYSIS OF IKEA-
IKEA is basically a private company which is known for designing and selling ready
to use furniture or the furniture which is assembled, home appliances and many accessories.
Moreover, they were the world’s largest furniture retailer in the year 2000 and they were
doing a fabulous business in India also. IKEA is really affected by many of the factors like
political, economic, social, technological, environmental and legal also. Here is the PESTEL
analysis of especially in India that shows that how these factors have affected the brand and
their successful business in India and many of the countries all over the world. (jangid, 2018)
POLITICAL FACTORS
IKEA is operating in almost 41 countries including India and all the countries are benefitted
from political stability. Without political stability, economic stability is really impossible. It
clearly shows that IKEA may lose profits in one location over another. IKEA profits are
always depending upon the relationship between the importers and exporters because if these
relations will be stable or healthy then only there are no chances of loss. (Pratap, 2018)
ECONOMIC FACTORS
Economic factor is one of the biggest factors which affect the complete business because of
the recession especially in India. Even all the bigger brands are still suffering from 2007
onwards. Maximum numbers of people have lost their jobs at that particular time. In India
purchases were only according to the need rather than opting any luxury and IKEA is already
offering many of the products with luxury, so they have faced a lot of losses in that particular
time period.
SOCIAL FACTORS
Social factor is also an important factor as in India IKEA was impacting because of their own
bigger mistake. Every business has a rule that you should know the culture properly of that
country where you are going to start your business. IKEA doesn’t know their customers and
they are offering same at all the places with same pattern or style in India which they carried
out in other countries which is not acceptable in each of the country. They can lower down
their profits and moreover they can eventually affect their own business. (Frue, 2018)
TECHNOLOGICAL FACTORS
IKEA being as a market leader knows how to showcase their products in the market
especially in India and to the people all over the world including India. IKEA is getting a
very well support from their own website as you can search any product for any category like
bathroom, living room or etc. In India they are offering every little detail of the product so
that their customer should be completely satisfied and it can also increase the brand loyalty
for sure. They are using the technology of the social sites as well as the well equipped
promotion of their products in the unique category pattern.
ENVIRONMENTAL FACTORS
Environmental factors are basically those external factors which are related with
sustainability and of the company to keep going in the market and also focus on their
marketing strategies as well. According to this IKEA helps themselves to reduce the cost and
also has improved the IKEA’S brand image especially in the Indian market. They are also
investing in wind and solar panels, so they are shifting their material such as cotton and wood

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should be obtained from the sustainable sources as well. It helps them to make an efficient
growth in India especially.
LEGAL FACTORS
Last but not least in India especially legal factors are also playing an important role like all
the businesses either they are small or bigger, they have a legal threat. IKEA also has to
follow every rule and regulation in India and every other country they are operating. The
rules are different for every country but being as a retail sales chain they are operating or
dealing with the customers face to face. IKEA was once highlighted in the news for poor
product quality which results to decline in the sales and affecting the reputation of the
company into a black hole. IKEA needs to ensure their products are safe enough otherwise
they can stand again but their reputation can’t survive again in India because people here are
always following other customers when they have to copy the brand or other products. (tutor,
2019)

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Reference
Frue, K. 2018. Pestle analysis of IKEA. Pestle analysis of IKEA.
jangid, S. 2018. Pestle analysis of IKEA. Behind the scenes of IKEA's india marketing strategy.
Pratap, A. 2018. Pestel analysis of IKEA in india. IKEA pestel analysis.
tutor, M. 2019. Logical Factor. IKEA pestle analysis.