International Business

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Table of Contents

EXECUTIVE SUMMARY        

STATEMENT OF PROPOSITION        

IKEA’s past relationship with India (Before Entering)        

Primary Research        

Analysis of India’s atypical business conditions: PESTEL Analysis        

Secondary Research:        

CONCLUSION        

EXECUTIVE SUMMARY

IKEA is a multinational group of companies that designs and sells ready-to-assemble furniture appliances and home accessories. It is presently the world's largest furniture retailer. IKEA has maintained almost a three decade long relationship with India by sourcing for its stores from the country. Now, IKEA is opening a retail store in India. It is not just eyeing the Indian market but also sees India as a potential global manufacturing centre for future.

In order to evaluate upon the appropriate entry strategy, we are studying on IKEA’s past entries into different markets, potential and peculiarities of India market and the probable impact India’s culture and economic policies could have on the entry strategies.

First, we started by having an interview with an industry expert which formed the base of our primary research. Although he felt that there will be growth in the organised sector in the future, he also listed out the hurdles that IKEA would potentially face in India.

We undertook a PESTLE study analysis to better assess India’s atypical business conditions. When the social and economic factors favoured the entry of IKEA, Political, Technological and Environment& Legal factors remained non-conducive for IKEA.

 The government policies are subject to various risks such as Delayed decision making due to political instability, Cultural problems, delays or legal disputes due to local partners and suppliers. The Labour unrest and industrial action also aggravates the problem. India fares marginally low in technological space due to poor investments by government and private entities. The legal system is also not very streamlined in India and getting the legal works done in a smooth fashion is still a bottleneck in India. Keeping this apart, there is a bright spot also. The potential opportunity owing to the favourable social factors acts as an encouraging reason for Ikea to enter the Indian market. Also the GDP growth and the increasing income level of the people are also an indication of the potential opportunities.