Business Model and Competitive Strategy of IKEA in India Case Study Management Assignment Help

Assignment Task

Task
Indian politicos and bureaucrats, IKEA’s €1.5 billion investment proposal to set up its stores in India was finally accepted by the local government on May 2, 2013. However, as of July 2013, Juvencio Maeztu (Maeztu), IKEA’s country manager for India, found he still had a colossal task ahead of him. IKEA, the Netherlands-based Swedish company, was the largest furniture retailer in the world, with a presence in 44 countries around the globe in countries such as the United States, the U.K., Russia, the European Union region, Japan, China, Australia, and so on. However, it did not enter the Indian market until 2013, though the company had had a presence in the country since the 1980s as a sourcing destination for its global stores.It had even opened its regional procurement office in Gurgaon, India, in 2007. In 2009, IKEA tried to enter the country to establish its stores, but its attempts were thwarted by India’s stringent Foreign Direct Investment (FDI) regulations. It again applied for permission for entry in June 2012 after India made some changes in its FDI rules. However, IKEA had to wait another year, hitting many roadblocks on the way, before it was able to obtain the Indian government’s approval to establish its stores. The company also had to tweak its global store model to fit the Indian FDI, sourcing outlines, and Indian consumer preferences.While Maeztu was tasked with tapping the Rs.i  925 billion Indian furniture and furnishings market, analysts were keenly waiting to see what strategies the furniture giant would come up with to win the highly fragmented, price-sensitive Indian market; many Indian middle-class families preferred to have their furniture custom-made from small retailers or local carpenters. No two Indian homes had the same kind of furniture; Indians in general showedmore of an affinity for unique woodwork and designs than for flat geometric furniture. “Living room in India is different from any other country—a place for socializing and every activity is around.

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