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Published by:
IBS Center for Management Research (2014)
Length:
17 pages
Data source:
Published sources

Abstract

The Netherlands-based Swedish company IKEA, was the largest furniture retailer in the world with its presence in 44 countries around the globe - in countries like the US, the UK, Russia, the Euro region, Japan, China, Australia, etc. However, it did not enter the Indian market till 2013, though the company had had its presence in the country since the 1980s as a sourcing destination for its global stores. After years of lobbying, and negotiating with and convincing the Indian politicos and bureaucrats, on 2 May 2013, IKEA's 1.5 billion EUR investment proposal to set up its stores in India was finally accepted by the local government. The company also had to tweak its global store model to fit in with the Indian FDI regulations and sourcing requirements and Indian consumer preferences. However, there were still numerous obstacles in its path in the form of real estate locations and cost, Indian consumer requirements and mentality, and competition from existing Indian furniture retail chains. The question was could IKEA tweak its globally successful business model to suit the requirements of India without breaking the model? This case is meant for MBA students as a part of the Strategic Management/ International Management /Competitive Strategy course.

Topics

Competitive strategy; Business model; Hybrid business model; Bowman's 'Strategy Clock'; Globalization strategy; Entry and expansion strategy; Emerging market; Competition; Localization; International management; Retail
Location:
Industry:
Size:
Large
Other setting(s):
2012-2013

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