A well-designed foreign direct investment FDI policy should have resulted in a rush of much-needed foreign investment to India, upgrading of the supply chain, modernisation of the retail sector, as well as more choices for consumers with lower prices.
For instance, the price of its "Lack" table has dropped to 39 yuan less than five euros at current exchange rates from yuan when IKEA first came to the Chinese market. The USA page has the highest following measuring about 3, Quite naturally, India is another unique market that is waiting in the wings for the home furnishing retailer to explore.
The main problem for IKEA was that its prices, considered low in Europe and the US, were higher than the average in China The company realised this and started targeting the young middle-class population. IKEA, famous for its flat-pack furniture which consumers have to assemble themselves, realised that understanding the local culture is important - Chinese people hate the do-it-yourself concept and Indians likely do so even more.
It innovated to stay in business. Indian customer preferences and economic environment are similar to the Chinese market. The rules are so onerous that a mass retailer such as IKEA will find it hard to meet them without penalising customers with higher prices and lower choice.
IKEA is a strong brand that understands that growing globally requires sacrifices and innovation from global teams, and they are ready to listen, respect and learn from the local environment. The metro columns were fully swathed to take the shape of the boxes.
IKEA also adjusted its store location strategy. IKEA decided to stick with low prices to remain in business. The store layouts reflected the typical sizes of apartments and also included a balcony.
The company also started performing local quality inspections closer to manufacturing to save on repair costs. While promotion of its catalogue through online mode constitutes almost 70 percent of its annual marketing spend, IKEA also makes judicious use of OOH Out of home by creating high engagement outdoor campaigns — one being in Paris around the Gare Saint Lazare where the furnishing retailer, based on the fact that half of the French people live in places with bathrooms smaller than 8sqm, installed a life sized bathroom on one side and a laundry room on the other.
IKEA made all necessary adjustments to make sure there was no mismatch in its growth ambitions and brand promise. IKEA identified the strategic challenges and made attempts to overcome them. The challenges it faced in China, however, were far bigger than the ones in the US.
This will mean the first store will take much longer to open than Indians expect and the rollout will be painfully slow. This was a massive change in strategy, as IKEA was targeting the mass market in other parts of the world.
FDI in retail in India has been a non-starter, hopelessly mired in special-interest politics: The company initially tried to replicate its existing business model and products in the US.
JCCaux Billboard-fitted wardrobes, Vienna: A onesize-fits-all approach is a rare reality.
Helping them adopt new technologies meant higher cost, which would hurt business. Also, it will be difficult for IKEA to find the type of location size, off a highway, with great links to a major metropolis that is crucial to the success of its business model.
What remains to be seen is how IKEA would adapt to the Indian market and, will it be able to successfully engage Indian consumers with similar innovative marketing tactics that have established the retailer as a marketing success?
In China, however, most customers use public transportation. The delay in policy-making at the state level could be even longer.
A consistent global brand promise is a desirable asset but what makes a real difference is to be brave and ready to change the target audience and build a differentiating promise. But it had to customize its products based on local needs. The company made slight modifications to its furniture to meet local needs.
Local suppliers were banned from providing raw material and furniture to IKEA, and the company was not allowed to showcase its furniture in industry exhibitions. Becoming an aspirational brand which is blogging with the Chinese middle-class youth is an unexpected twist in its brand proposition.
For India to kick its economy back to the growth rates necessary for meeting the aspirations of its citizens, we need to roll out the red carpet for foreign investors instead of red tape. To meet local laws, it formed a joint venture.
Story Couching tiger tames the dragon This case study analyses how IKEA adapted its strategies to expand and become profitable in China. The venture served as a good platform to test the market, understand local needs, and adapt its strategies accordingly.INTERNATIONAL BUSINESS STRATEGY - REASONS AND FORMS OF EXPANSION INTO FOREIGN MARKETS To create a successful global strategy, managers first must The paper includes the case study of international strategy used by IKEA and.
IKEA: World’s Most Successful Furniture Retailer Next Submission. Written by Kevin IKEA is the world’s largest furniture retail chain with stores in 27 countries generating over $35 billion of revenue. At a time when online shopping is disrupting the traditional retail model, the Swedish retail icon has drawn more than million.
Executive Summary: IKEA is known globally for its low prices and innovatively designed furniture. In China, however, it faced peculiar problems. Its low-price strategy created confusion among. Ikea's forward-thinking strategy made it the top furniture seller in the world. It also changed retail forever, analyst Warren Shoulberg writes on industry website The Robin Report.
"There is perhaps no other retailer on the planet that has moved its basic model into so many places with so much. Flickr / Daniel Lee Ikea's forward-thinking strategy made it the top furniture seller in the world. It also changed retail forever, analyst Warren Shoulberg writes on industry website The Robin.
Feb 22, · How IKEA uses social media to emerge a marketing success IKEA’s digital marketing strategy remains almost uniform – extensive use of social .Download