IKEA-India and Japan

IKEA

Group 1 Section C
Pragna (PGP09147)
Deepti (PGP09150)
Neha (PGP09160)
Pinal (PGP09163)
Deeksha(PGP09148)
Reshma(PGP09168)
 Mission & Vision
IKEA’s mission and vision are the same statements:

“At IKEA our vision is to create a better

everyday life for the many people. Our business
idea supports this vision by offering a wide
range of well-designed, functional home
furnishing products at prices so low that as
many people as possible will be able to afford
them.”

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 About Company
Designs and sells ready-to-
Swedish assemble furniture, kitchen
multinational group, appliances and home
founded in 1943 by 17- accessories, among other
year-old carpenter useful goods and occasionally
home services
Modernist designs for various
types of appliances and
furniture, and its interior
design work is often
associated with an eco-
friendly simplicity

November 2017, Website contains about

owns and operates 12,000 products and is the
415 stores in 49 closest representation of
countries the entire IKEA range

Acronym that consists of the initials of Ingvar Kamprad (name of founder),

Elmtaryd (the farm where he grew up),
and Agunnaryd (his hometown in Smaland, southern Sweden)
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IKEA India
• Allowance of 100% FDI in the retail sector
• Growing buying power of Indian middle class family
• Highly educated human resources at low labor cost
• Large and young population, 54% below age of 25
• Annual GDP growth rate of 6.6% for the country
• Imports are growing in this furniture segment
• Increase in infrastructure used by organizations
• Increase in number of startups in the country
• Growing of hotel developments due to Tourism
 Factors effecting IKEA

Technical Environmental Legal

• Poor Infrastructure • Climate change issues • Labor Laws
• Poor Supply chain • Diverse society • Tax and Tariffs
• Resource challenge • Traditional mind set • Lack of Transparency
• Social beliefs • State-center conflicts

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Indian Consumer buying behavior

Value for Durability Ease of Transport

money of product assembling till homes

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 Possible road blocks ahead

Huge competition from local suppliers

Sourcing, Procurement and Distribution via transportation might be an issue

Indian customers might not accept the concept of self assembly and self service

Driving to city outskirts for their shopping is not practiced by Indian customers

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Reasons for IKEA to succeed in India

Offers everything under

one roof

Corporate Social Furniture and goods

Responsibility operations in represent modern Indian
India lifestyles

Familiar brand name

across urban Indians
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 IKEA in Japan

• Japan is the second biggest retail market in the

world
• It also has the third largest GDP in the world
• There is very high literacy level in Japan as well
• Many people live in small spaces in Japan
• we have a lot of business experiences for areas with
small
• We have opportunities to apply that know-how that
we acquired in other countries into Japan

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 Difficulties in entering Japanese market

• Japanese consumers value service, so we have to think

about
1. How we offer low-priced products to them
2. How we also add service
• To have unique products suitable for Japanese market
• Restrictions on the acquisition of land for large-scale retail
stores
• Regulations on product certification and labeling introduced
only in Japan
• Restrictions on the importation of food products that we offer
at our restaurants
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 Factors

Availability of Availability of Demographics:

raw materials: basic
Nearness to Economic Type of
If your infrastructure:
market: policy: product or
business is not Amenities and
To succeed, To consider are service your
sited close to infrastructure
you must government’s business offers
these raw such as water
make it easy policy, fiscal and the status
materials, then supply, power
for and monetary of the
sourcing and supply, good
customers policy, customers will
transportation road network
to find your exchange rates, play a vital in
will reduce and security
product taxes, levies choice of small
your profit are things to
and duties business
margin consider location

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 Factors(contd.)

Export
processing
Industrial zones: Free trade Distributive
Psychographic
Clusters / Locating zones: channel:
s:
areas: business in International more you
Mindset of
Areas are such regions free trade make it easier
your
given special means a zones and trade for your
customers or
attention such reduction in fair centers are distributors to
the aura of a
as good road transportation important access your
particular
network, cost, faster because it is products, the
region is also a
constant inspection and accessible and better for
factor to
power supply, clearance of normally business
consider
etc. your products receives wide
by custom publicity
officials

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Thank you

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