IKEA's Competitive Strategy in India: A Cooperative Approach

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COMPETITIVE STRATEGY
IKEA in India

TABLE OF CONTENT
1. Introduction
2. Cooperative Strategy
3. Benefits of cooperative strategy to IKEA
4. Implementation of cooperative strategy in India
5. International strategy
6. Recommendation of other strategy
7. Conclusion

INTRODUCTION
 Strategy formulation and strategy implementation-
 Companies need to formulate and implement proper strategies so
that they can achieve the business objectives in effective manner
 In business, Strategy formulation and implementation is basically
the process of selecting the most suitable course of action for
achieving the organizational goals and objectives.

CONTINUE…
 About IKEA-
 This is privately held company which is engaged in designing and selling
ready-to-assemble furniture.
 IKEA Group increased its business operations in 44 countries including 30
services.
 Purpose-
 To provide wide range of furniture products to the consumers along with
quality, excellent design, durability and price
 To expand the business in the international markets so that financial stability
and flexibility can be achieved

COOPERATIVE STRATEGY
 Planning strategy in which two or more companies work
together in a specific market to achieve the common
goals and objectives.
 Helpful for the companies in enhancing the profits in the
business
 Helpful in achieving competitive advantages
 Useful for those companies that want to enter in new
markets

BENEFITS OF COOPERATIVE
STRATEGY TO IKEA
 IKEA has adopted cooperative strategy so that the company can
operate the business with the suppliers and other furniture
companies
 Some of the benefits of cooperative strategy for IKEA are as
follows:
 Marketing power- By cooperation of suppliers and other
furniture companies, IKEA can be able to target more market in
India.
 Purchasing power- is able to increase its purchasing power of

IMPLEMENTATION OF COOPERATIVE
STRATEGY IN INDIA
 The ways of implementing cooperative strategy by IKEA are as follows:
 Foreign Direct Investment- IKEA focused on Foreign Direct
Investment (FDI) to enter in the Indian market. This is an effective
tactic by which the company expanded its business in India and set 25
retail stores in two stages.
 Working with suppliers- By this, IKEA was able to improve the
availability of high quality, low-price products, sourcing the raw
material from India.
 Opening stores- With the cooperation of other firms, the company has
target to open 25 stores in all over the country.

INTERNATIONAL STRATEGY
 The business of IKEA is not only
about selling furniture but also
selling the experience of buying
the products at affordable prices.
 Differentiation strategy- The
company designed its own
furniture, bought raw material
from the suppliers and created its
exhibition. In addition to this, the
company has improved its value
chain by cooperative focus on
customers and suppliers
 Competitive strategy- minimum
production cost strategy,
marketing strategy, transnational
strategy and low-cost strategy are
used by IKEA.

CONTINUE…
 The reason of adopting international strategies by IKEA
in the global market is to achieve the competitive
advantage in the market.
 In this manner, it is required for the company to adopt
some effective international strategies.
 By using various business strategies, the company is able
to minimize various barriers in the business.

CONTINUE…
 Process of implementing internationalization strategies are as
follows:
 The company has policy i.e. creating new designs every season. All
the design teams of the company are expected to design new and
appealing products on the regular basis. By this, IKEA is able to
differentiate its products from competitors in the market.
 For becoming overall cost leader in the global market, the company
has minimized its production cost. Low cost product is the top most
priority of IKEA which combines functionality and good design.

RECOMMENDATION OF OTHER
STRATEGY
 International Strategy-
 In order to stay competitive in the
Indian market, the company can
adopt international strategy including
standardization approach.
 This is the strategic and risk-reducing
approach in which local suppliers in
Indian market can provide valuable
input to IKEA that can provide
opportunities to the business.

CONCLUSION
 It is observed that companies need to formulate and implement proper
strategies so that they can achieve the business objectives in effective
manner.
 The company has adopted cooperative strategy because the
challenges can be minimized only by the cooperation of local
suppliers and local furniture manufacturing firms.
 International strategy can be helpful for IKEA to expand the business
in Indian market effectively so that the company can provide the
products according to the local demand.