IKEA_India_SeminarPaper2020_Shuporna_MEM19

4. IKEA in India
India is the 37th entrant amonsgt the countries IKEA is doing business with. While IKEA
operates through owning the stores in 24 countries, the rest are franchised or owned by
other business entities. However, given the complexities of setting up business in India,
as an emerging market, it was not wise to replicate the business model of other countries
to India. As the potential for over 1 billion new customers is attractive, there is also a
whole host of serious challenges that the company must face, this market.
The macro enviornment consists of broad enviornment factors that impact to a greater
or lesser extent many organisations, industries and sectors. Likewise, It is critical to study
the macro enviornment for IKEA in case of its presence in a country like India, which
comes with its own share of challenges and opportunities.
Each country is a strategic business unit in IKEA as they are all a part of the organisation
but for which there is a distinct external market for goods or services and distinct
competitors that is different from another SBU.
4.1. PESTEL Analysis
With PESTEL Analysis, which is a strategic analytical tool used to assess the impact of
external factors on businesses, we shall now asses the potential competitive advantage
of IKEA in India. There have six external factors that may impact theperformance
and affect the strategic development of the organisation.
Political
Legal
Economi
c
PESTEL
Technology
Enviornment
Social
7 Seminar Paper BDIM January 2020