Can IKEA adapt its service experience to India?

Q1) Why does IKEA have a loyal and broad customer fan base?

Ans 1) IKEA has a loyal and broad customer fan base, with many buyers have been
almost in love with the company. One of the reasons is that buyers love to invest their
time to assemble the products and furniture. When they shop at IKEA, they are
intimately involved in almost every part of the purchase, that is they find the product,
purchase it and then finally assemble it themself with the help of a manual . This
investment in time and labour is known as the “IKEA effect”.
The Ikea effect is a term coined by Norton, Mochon, and Ariely in their HBS publication:
The Ikea Effect: When Labor Leads to Love. This means that buyers value products
more if they partially assemble it. Buyer assumes that they purchase it at a cheaper
price if they will assemble it even though it values more. When people acquire products
from their own labor, their effort can increase their valuations. And while some labor is
enjoyable and some labor allows for product customization—both of which increase
valuations.
Also IKEA has a huge variety of lifestyle furniture and other items that have simple
designs and low prices. And buyers enjoy seeing all the items that IKEA shows on
display and if the buyer likes any item then they purchase them. Also they have a huge
variety so most of the buyers find things according to their taste.
Also they have a loyal fan base as they are developing trust with the consumers.

Q2) What are some of the factors that would complicate IKEA’s entry
plans into India ?

Ans 2). The factors that would complicate IKEA’s entry plans in India are:
● The commitment to offer the same experience in selection of items at
comparable prices as it is provided in other countries such as the US , Europe ,
China.
● Lack of organisation and consolidation in the furniture industry in India.
● Competition with established Indian furniture companies such as Zuari, USHA
Lexus furniture , EVOK etc.
● Poor states of India’s infrastructures such as roads and railways.
● Restricted capacity in India’s seaport can add days to ship items .
 ● Corruption in India .
● Restrictive labour laws .
● Very long procedure for necessary permission to start a business ( at least 196
days approximately)
● Very slow progress of Indian government to improve the business climate.

Q3)What makes IKEA’S service experience so unique?

Ans 3) IKEA's service experience is so unique because it forces it’s visitors to go on

every time they enter one of the cavernous store.As people travel through the store they
forced to interact with items that are offered for sale and engage in an experience what
marketing people call it as servicescape.The benefit to the way IKEA'S configured it
service escape is that shoppers are encouraged to physical interact with item for sale is
imagining what they would look like in their own home or apartmentAiding all of this is
something called experience room which were strategically located throughout the
store.these stimulated rooms and small apartment allow customers to actually see what
an item look like in their homes before purchase ,while extremely practical these
mock-ups also allow for greater emotional experience .

Q4) Why is India an attractive place to do business?

Ans 4) India is an attractive place to do business for IKEA because of the following reasons:
● Strong economic development has increased the living standards of middle class
people
● Increased urbanization and higher incomes
● Growing sophistication of consumers
● Increased demand for foreign brands
● Organized portion of the retailing sector expected to grow to 20 percent by 2020
● Fractured and disorganized nature of furniture retailing leading to great potential for
consolidation or entry by a well managed, and well financed, outside player
● Full support of local government officials
● India has been a source of material for IKEA for over 25 years
● Some of the lowest manufacturing costs in India