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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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IKEA is one of the company in the globe which its brand is the top 100 brands in the global brand list. Which the company multination its brand towards the globe by providing goods and services towards the nations of every country. IKEA is originally established in Sweden, which founded by Ingvar Kampard, in the 1920's, Ingvar Kampard  started doing business at the age of 5 which he rode bicycle in the neighborhood and sell matches around, the idea of buying bulk of matches could get a cheaper cost, which could have a higher profit margin gave him a mindset of how to run business. Therefore in 1943, the founder Ingvar Kampar founded the company as a mostly mail order self services. Five years later he decided to sell furniture. IKEA first official MOBEL IKEA store opened at ALMUT, SMALAND, Sweden in 1958. It was that year the founder of IKEA decided to open more and more stores in the globe. Globalizing a brand towards the globe is not an easy thing to do. The company itself has to diversify each of their department and the co-operations between each and every department. It is majorly towards how to deal with marketing for the brand to survive in every country. Marketing is not as easy as it sounds like, it is included branding, marketing that defines with their SWOT analysis that they have analyzed. In every country, there are different cultures that IKEA has to adapt to survive in the market. After the survival in different countries, they came to a decision to enter the market of India due to India is one of the top populations in the world with over 1.2 billion people that are living in the country. With India's attractive economic growth that generates a real annual growth of almost all 6 percent every year, IKEA decides to invest an amount of 1.5 Billion euro into the market with each store requires 80 million euros to start.  What makes them has a decision that they are brave to step into a new country? What makes their services so unique? The decision is to generate more sales and profit from different countries. Their services are so unique because they analyze the countries needs and wants. Their marketing team did a well job on understanding the culture of the people. IKEA plans on sourcing a lot of material locally to creates an opportunity for the local suppliers. India has been a material source for IKEA for 2 and half decades. Due to the sources, the company has confidence on entering the India market. Their services were so unique due to their working experience in India. An entry into the India Market isn't that hard for IKEA due to they have a low demand on services due to they are used to the horrible service experience but services will become an important part of daily routine because the people of India will become richer and more empowered. Therefore, IKEA's strategy or entry plan would have an easier access stepping into the Indian market. The trends and demographic that favor IKEA's expansion plans into India is the population of 1.2Billion people that are living in the market, that were reported that Indian consumers was placing a better attention on consuming better quality and improve innovative towards the furniture products that they chose to purchased. As the countries becomes more and more developed, the higher incomes will be received by all of the people in the country, with the help of the economics developed the demand of foreign brand will increase. As for sure, IKEA will use this opportunity as an entry plan for India market. Before every company enter into a new market, SWOT analysis will be conducted to ensure the well-being for their business. IKEA is also one of it. They will try to use the opportunity to support themselves at a market which they have already done the logistics with for 25 years. An experience is the way to strengthen up their strength and to decrease their weaknesses and destroy their threat. The market trend in India suits the IKEA's business as they are serving people who are living at the range of middle class earnings. As for the amount of populations in India , 1.2 Billion people IKEA will be setting their retail stores in one of the places where it will be shopped by the younger generations due to the nations below 25 years old are more concerned with the good's material that they purchase. As a result, the disposable income in India is relatively low, that is why indian consumer will be more lightly paying attention on the quality of the goods, because their mindset insist on “value for money”. On the other hand, technologies have become more and more modernized, the idea of technologies are to solve and ease up the problem for human being. Therefore, IKEA partner up with the local app maker, URBAN CLAP to attract more customers onto buying more of their products. Urban Clap is an app who will send workers to install furniture into their home. The partnership of both companies attracts more people to enjoy shopping in IKEA. Profit and sales will increase for IKEA India. Social trend is also one of the major thing in India, where its country is developing, therefore society will have a higher standard of living. Which results that, IKEA setting up places in their store with restaurant with the mixture of western and local foods to suits the society. Western food will be set up due to the people in India is trying to have a mix culture living. It will result that, the people will shop and enjoy their meal there. On the other hand, what makes India a difficult place to do business? What are the factors that would complicate IKEA's entry plans into India? First of all, every part of the country which a new firm enter into, will face different of factors such as rivalry, culture difference, pricing, technologies. The first major factors are pricing. The international pricing for IKEA's product will not align with the India market, due to the people in idea will want a bargain and discount for each of their products. Therefore, if IKEA wants to be successful in India, they have to do a survey for the pricing of the products for the market which the products will satisfy the people's mindset. Besides that, the other major reason that will complicate the entry for IKEA is the local business which is their local furniture business that has already dominate the market for many years. India used to have predominant such as ‘Raj and Raj', ‘Durian', ‘Godrej Interio', ‘Neelkamal', ‘Nesta', ‘Style Spa', Zuari, until the ecommerce came in. So there is the @home town, @Jagdish store which lets the customers experience a whole new level of shopping for furniture. Close at heals was Reliance Furniture. The latest wave for the India market is from the dotcom sector, www.pepperfry.com , www.jabong.com. Keller and Jacob (2011) stated that the threat of entry is high as the online e-commerce are offering home installation and delivery with a hefty discount. The mixture threats of local furniture business retailers and technological furniture business retailers are the factors where IKEA difficulty in entering the India Market. On the other hand, India's social culture is also one of the factors that might complicates the entry of IKEA into the market due to IKEA's design on the product. As for sure, all of us know that, IKEA has a modern way of designs that may not suits the india culture. Therefore, IKEA has to give the people of India has the power to design their own, that might benefit their business. IKEA entering India wouldn't be that difficult if they have done their survey or research properly.In conclusion, I think based on the factors and opportunities that I listed down above, IKEA entering India might be a 50/50 % of success or unsuccessful due to the economic factors, social factors, technological factors and more. For example, social factors are if they let the India people to customize their own piece of furniture on a lower cost price, it will be helpful for them in the market of India, but if they done it without consulting the local marketer opinions, the business of IKEA will be lesser. On the other hand, India economic factors are one of the issues that might affect the whole retail business for Ikea, through out India's economic growth, it is well explain that their demand of better goods will be increase, therefore the purchase power of every single family will be higher with the higher salary paid for every household. Middle class status people will increase with the higher earnings from their jobs. Besides both of that factors that might lead IKEA to a success journey in India is if they solve the political issues with the local authority or the government having an agreement between each other. Technological factors also may affect the success journey for IKEA in india, because on the modern society, people will choose shopping online over retail shopping because it is more comfortable. Therefore, for IKEA to be successful, it will take IKEA to partner up with the local shipping companies to enhance the shopping experience. Marketing is also one of the major reason for every business to succeed, Ikea should partner up with the local marketers to bring up a different advertisment, branding and more. Lower cost furniture is also one of the major needs for the people in India, people getting richer doesn't define as they want a higher cost of furniture. As I said on the above, people in India their culture is want bargain and discount, Therefore, to satisfy the mindset of the people, Ikea has to be aware of lowering their price and cost that might enhance their business in India. Choosing the right place is also one of the top issues for companies to step into a new market. Therefore, choosing a place where its easy for the people in India could also help with the business. Lastly, I believe that Ikea will be successful in India once they solve all of the problems that they might face.

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