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TASK 1 ........................................................................................................................................... 5
TASK 2 ........................................................................................................................................... 9
TASK 3 ......................................................................................................................................... 15
Market entry mode and marketing tactics which support entry mode of IKEA ....................... 15
TASK 4 ......................................................................................................................................... 17
Conclusion .................................................................................................................................... 21
References ..................................................................................................................................... 22
TASK 1
Micro and macro environment analysis 600
IKEA is an international retrial company and situate inn Netherland. In the present time,
its operates more than 300 outlets in 35 countries and offers various household products at low
cost with good quality (Hair, Joseph and et.all., 2000). Now IKEA is planning to expand its
business in India and also invest the huge amount. Indian market is very potential market and the
competition level is very high. So its needed to analyze some external and internal environment
of India that gives benefits at the time.
Micro environmental factors: These factors easily controlled by IKEA and can be analyzed by
the following ways.
SWOT analysis
Weakness: Indian political structure is good as compare to the other countries but many
politicians have created the difficulty for their personal interest. Another weakness is increase
corruptions, poverty, cast based discrimination, consumer inflation etc (Anderson, Carol and
Vincze, 2000).
Threats: The threats in Indian market are related to the availability of land and real state, human
capital, technology, supports of government etc.
Bargaining power of suppliers: Bargaining power of the suppliers is low because there are large
numbers of suppliers who are dealing in different sectors. So, IKEA would build a strong
relationship with suppliers and make contact with more than one supplier to reduce the
dependency level on single supplier (Lusch, Robert, Vargo and Malter, 2006).
Bargaining power of consumers: Bargaining power of Indian consumer is high because they
have the many options to buy the products. So for this, IKEA would launch those products at low
prices so that consumers will purchase the goods by low bargaining.
Threats of substitutes: This threat is low because there is no substitute available in the market. It
would be opportunity for IKEA to expand the business in Indian market (Kotabe, Mike and
Helsen, 2009).
Threats of new entrants: The threats of new entrance is high because there are already well
established retail brand in India and it would be tough competition for IKEA in Indian market.
Rivalry: The entry and exit barriers of new rivalry are easy and there are various products
available in the market. This increased the switching cost of the consumers. This helps IKEA in
getting the growth in Indian market (Hair, Joseph, Bush and Ortinau, 2003).
Social: In India, the social values are change with the time. The purchasing power of the people
is increasing and this leads to they start saving. The attitude of consumers, population growth,
age structure etc are change and these all can gives the benefits IKEA in expanding the business.
Technological: Indian people are now moving in the direction of adopting the technology and
change the perception of them towards the things. They also connect with the Social Medias and
use the online shopping. These all things will be opportunity for IKEA in expansion and
promotion of business (Zou, Shaoming and Cavusgil, 2002).
Economic: The GDP rate is growing very well and it gives the stability to the economy of India.
This is good for the investors and they are getting the good return on their investment. So it will
be beneficial for IKEA if it expand its business in India (Ioana, Adrian and et.all, 2009).
Political: The political environment of India is much stable and helps the new ventures to
establish the business in India. This will also help IKEA at the time of expansion of business in
India.
Legal: Indian government makes some laws such as consumer right protection; minimize the
waste, factory act, TAX, Vat etc. So at the time of expansion, IKEA would remember these laws
and follow them in a right manner (Fleisher, Craig and Bensoussan, 2003).
Ethical: It helps the company to find and compare what is right and what is wrong. So, it would
be required for IKEA Company to check their ethical factors that help in expansion of business
in India and run it very successful (Byrom, John, Medway and Warnaby, 2003).
TASK 2
Global marketing objectives, corporate strategy and business strategy
Global marketing objectives
For expanding a business ta global level, IKEA has to decide some objectives on global
level. These objectives will work as a milestone for company in achieving its goals of business.
These objectives also help the firm to make a strong grip on Indian and other market. These are
Cost leadership: In this strategy, IKEA can sell its products either at average industry prices to
make large profits as compare to its existing competitors or below the average industry prices to
capture large market share (Strategic Management, 2010). In both given above option, IKEA can
Market entry mode and marketing tactics which support entry mode of IKEA
Market entry modes
To enter into a foreign market, it is required to select a suitable mode that helps in
entering into a market. As per the given case study, IKEA is planning to expand its business and
invest million funds in India (Lee, Kiefer and Carter, 2011). At this stage, the selection of right
method helps IKEA to enter in new market. Some suitable entry modes are as follows.
FDI: It is direct investment method in which owner of a company invests the required facilities
in the target country. These facilities include capital, technology and human resources to run
business in new market. In the case of IKEA, it can adopt this mode to enter into Indian market
by bringing technologies, capital and personal (Hair, Joseph and et.all., 2000). Company can
direct invest the funds by acquisition of existing organization of retail in India. By following this
entry mode, IKEA can keep high degree of control on the various operations of business in India
and get a chance to understand the expectations and needs of the customers. So the whole
process requires the high investment and high level of commitment from the side of IKEA.
Franchising: When a company grants rights to use its trademark, business system, process,
produce and sell the products etc to the other party under the agreement. This is called
franchising. In this method, IKEA can give some rights to the other firm who sell the products to
Marketing tactic
Process: The process of manufacturing, delivery of the products can be effective so that it can
give the value to the customer investment. This is also helps in marketing of the services of
IKEA.
Entering time line plan for IKEA
The following plan is related to the entering of IKEA in Indian market. This plan is divided
into sub activities with specific time frame. This time line plan will helps the company to
Activities in weeks 1 2 3 4 5 6 7 8 9 10
Market research
Segmentation
Targeting
Positioning
The above Gantt chart is a time plan for IKEA for entering into the Indian market. The
whole plan takes the 10 week to complete and estimate cost for this plan is $ 50. The first step is
regarding the selection of the country in which IKEA wants to expand its business and invest
huge capital (Manchanda, Puneet, Rossi and Chintagunta, 2004). This work takes 1st week for
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completion. Second step is setting of global marketing objectives for select options which will do
in 2nd week. Next step is selection of the entry mode in Indian market and this will take 3 rd week
after second activity (Hkansson, Hkan, and Waluszewski, 2002). After entering into the
market, next stage is market research on Indian market to analyze those factors which will affect
the business of IKEA in positive or negative way. It will complete in 4th week and then next step
is segmentation, targeting and positioning of firm in 5th week.
Formulation of marketing activities to increase the sales of IKEA which will be placed in 6th and
7th week (Pndiche, 2013). After this, implementation of the plan will do in 8th week by the
company. Next step is monitoring and controlling of the plan which will start same week of
implementation of plan and end it in 9th week. Final stage is taking corrective actions to resolve
the issues within the plan in 10th week.
CONCLUSION
From the above report it can concluded that global marketing management helps IKEA to
expand its business in India. With the help of SWOT, Porters five force model and other
techniques, its easy to analyses the micro and macro environment of Indian market. The most
suitable market entry mode for IKEA is Foreign direct investment. The appropriate corporate
strategy is market development and business strategy is cost leadership. The 7 Ps helps IKEA to
prepare the marketing mix and various activities with the help of timeline.
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