A705PRESCRIBEDCASEFORMAT

University of San Jose –Recoletos

Accountancy and Finance Department

CASE NO. 3

IKEA

Submitted to
Dr. Rosemarie V. Jacalan, CPA
October 17, 2021

Submitted by
Group 6
Langbid, Denise Yannah
Loquinario, Kirstine Nadine
Lucero, William
Oliamot, Geraldine
Ondoy, Marielle Charisse

CASE ANALYSIS

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EXECUTIVE SUMMARY STATEMENT1

IKEA, a Swedish company founded in 1943 by Ingvar Kamprad, is the world's

largest retailer of ready-to-assemble furniture, kitchenware, and home accessories,
with approximately 422 locations worldwide selling affordable household items to
millions of customers in more than 50 countries, including Germany, France, Spain,
Japan, the United States of America, the United Kingdom, China, Russia, Thailand,
Egypt, and Qatar, among others. It added 19 new locations in 2018.

Despite IKEA's global fame and success, they continue to struggle to establish
a foothold in the Indian furniture market. Numerous reasons led to the departing CEO
of India's skepticism about the performance of the company's first shop in Hyderabad,
India. These issues include the extremely fragmented Indian furniture sector,
government regulations, local sourcing, and limited/restricted e-commerce selling.
India has a rather distinctive reaction and approach to home furnishing goods that is
distinct from what IKEA is known for and excels at - do-it-yourself projects.

As to the strategic analysis conducted through the different matrices, it resulted

to an aggressive position that IKEA has. IKEA has been successful in leading its
market globally. However, due to the main problem mentioned above, the group
recommended that it would be better for IKEA to pay more attention to their Research
and Development Team. They have to study more of the Indian market regarding how
they would be able to compete with its strong competitors given the different factors
they have. This is based on the CPM we have conducted, hence, according to the
matrix, the company will have a competitive advantage if it pulls these factors at a rate
of 2 to 3, and much better at a rate of 4: service quality, customer satisfaction,
research and development, price range, and advertising.

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1.0 STATEMENT of the PROBLEMS and STRATEGIC ISSUES

IKEA has yet to establish a store in India, with the first one scheduled to open in
Hyderabad in 2018. Juvencio Maeztu, the departing CEO of India, has been skeptical
about IKEA India's performance owing to the country's extremely fragmented furniture
sector. The business is having difficulty breaking into India's furniture sector. This is
because their primary problem is a lack of focus on their research and development
department as to how they will be able to dominate the market, or at the very least,
maintain the company. Along with its main problem are the strategic issues that IKEA
faced in having to put up a store in India and these are:

 Indians are not much comfortable in the Do-it-yourself (DIY) type of assembling
of furniture which is the forte of IKEA.
 Positioning its products in the Indian market, where customers were highly
price-sensitive.
 The FDI in e-commerce laws have also forbidden IKEA from selling its products
online in the country.
 Looking for experimenting with new store formats for different locations .

2.0 VISION and MISSION STATEMENTS and CORE VALUES/CORE

2.1 Existing Vision Statement

“To create a better everyday life for the many people – for customers, but
also for our co-workers and the people who work at our suppliers.”

2.2 Existing Mission Statement

“To offer 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”

2.3 Evaluation of the Existing Vision and Mission Statements and Core Values/Core
Principles
IKEA's vision and mission have always emphasized the importance of
making a positive difference in people's lives via the provision of high-quality
home furnishings. They think that each person has something important to
contribute, which is why they make it a point to engage people in creating their
goods. Apart from their objectives, they adhere to the same principles as their
consumers to foster a sense of community and social responsibility.

2.4 Proposed Vision and Mission Statements and Core Values/Core Principles
N/A

3.0 STATEMENT of QUALITATIVE and QUANTITATIVE OBJECTIVES (that must

be time-bound)

3.1 Financial Objectives

N/A

3.2 Strategic Objectives

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 Penetrating the Indian furniture industry by targeting the younger

demographic since India has a young working population.
 Low-cost pricing with strong local sourcing.
 Seeking deeper engagement with the society, especially the
Indian society.
 Create the right preconditions before entering the market.

4.0 ANALYSIS of the EXTERNAL ENVIRONMENT

4.1 Assessment of the Firm’s Current and Projected Opportunities and Threats

4.1.1 Economic Forces

As per Bloomberg’s data, India is likely to have the world’s largest workforce by
2027, these facts assure that India is a promising economy with the largest young
population. As a result, labor in India is likely to be more numerous and less
expensive, providing an excellent incentive for IKEA. Rather than doing their traditional
do-it-yourself type of furniture assembly, the company decided to hire people for labor.
As a result, the company was forced to face challenges and implement changes. By
hiring more people, changing their strategies, and implementing localization. The
company also experimented with various things, such as new store formats for
different locations, having suppliers in India, and creating stronger brand awareness.

4.1.2 Social, Cultural, and Demographic Forces

Unlike IKEA stores in China and Europe, India has its own distinct culture,
people's perceptions, and way of life, all of which matter and have had a significant
impact on how IKEA should deal with the situation in India. As a result of these
changes, the company must create brand awareness, brand liking, and provide
compelling reasons for customers to visit the store and purchase the products.
Localization was also implemented to accommodate consumer trends. The company
began producing specific items that are well-known in the country, and it was decided
that many products from the global portfolio would be sold at a lower price in India.

4.1.3 Environmental/Ecological Factors

N/A

4.1.4 Political, Governmental, and Legal Forces

One of the challenges that IKEA faced in India was the government, such as the
government's compliances on local sourcing, as well as their plans to open additional
stores in the country and grow the business. Furthermore, in 2012, the government
only permitted 100 percent FDI in single-brand retailing. The company had a difficult
time obtaining approvals from the Foreign Investment Promotion Board in 2012.
Amidst an e-commerce boom and a market of 213 million mobile internet users, the
FDI in e-commerce laws have also prohibited IKEA from selling the goods available on
the internet in the country, so achieving the vast population in one particular city with
one store appeared to be a big challenge.

4.1.5 Technological Forces

E-commerce is also booming in India, with many companies involving their

businesses in e-commerce, as well as a number of small businesses selling and
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promoting their products online. IKEA, like many other businesses in India, has
planned and developed various strategies to sell their products online and raise brand
awareness in an online setting. Because of e-commerce, IKEA has been able to reach
a larger market and reach more consumers; as a result, digital sales may increase.

4.1.6 Porter’s Five Forces

Threat of New Entrants.High. India has permitted 100 percent FDI in single-
brand retail without the need for government approval. According to, India ranks fourth
in terms of the number of consumers in the furniture sector. With such factors in mind,
India is a good place to consider when investing in and venturing into the furniture
sector. There is a high likelihood that new players will enter the scene sooner or later.

Threat of Substitute Products.High. With the country having one of the

highest demand for furniture, it is expected that there are enough manufacturers to
meet such demand. There are already local furniture manufacturers who offer much
lower prices than IKEA. These local manufacturers, in addition to offering low-cost
products, also provide assembly services, making it more appealing to Indians who,
unlike in Western countries, do not prefer to do it themselves. There is a possibility that
IKEA's products will be less preferred if they do not provide more unique features to
the product as well as competitive service to Indian consumers.

Competitive Rivalry.High. In addition to local manufacturers, there are large

manufacturers, retailers, and online retailers on hand to assist customers. Godrej
Interio, Zuari Furniture, Damro Furniture, Nilkamal Furniture, Durian Furniture and
many more are among these manufacturers and retailers. Competition is fierce
because these manufacturers/retailers, whether organized or unorganized, not only
sell products but also have competitive advantages over one another. As an example,
India's leading furniture brand intends to expand its retail network in order to gain a
larger market share.

Bargaining Power of Supplier.Medium. IKEA still has products that are

contractually sourced from their main suppliers. However, because it is considering
sourcing some of its raw materials in India, suppliers are expected to slightly bargain
prices because some of the raw materials they are considering are also in demand by
other businesses.

Bargaining Power of Buyers. High. The country already has a number of

furniture manufacturers and retailers offering a range of prices. Buyers can easily
influence the company to lower their prices because if they do not, they can easily
switch to another store that sells similar products at a lower price. Adjusting to buyers'
price expectations should be considered before entering such an environment.

4.2 The External Factor Evaluation (EFE) Matrix

Weighted
Opportunities Weight Rating Score
A surge in the construction industry 0.11 3 0.33
Offer tips and ideas for living a sustainable
home life 0.13 2 0.26
Booming e-commerce 0.14 4 0.56
Changes in customers lifestyle 0.12 4 0.48
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Threats
Government policies 0.12 4 0.48
Local Indian brand 0.11 4 0.44
Demand for low-cost products 0.15 3 0.45
E-commerce laws 0.12 3 0.36

A total weighted score of 3.36 indicates that the business has a higher than
average of 2.5, implying that the company is estimated to be above average in terms
of its ability to respond to external factors. This demonstrates that IKEA's strategies
are well-designed to capitalize on opportunities and defend against threats. Because
of its high score on the EFE matrix, IKEA is responding effectively to the industry's
existing opportunities and threats, and that IKEA has incorporated effective methods in
capitalizing on these opportunities while mitigating the potential negative effects of
external threats.

4.3 The Competitive Profile Matrix (CPM)

Local
IKEA Godrej Interio Manufacturers
Critical Success
Factor Weight Rating Score Rating Score Rating Score
Sales 0.10 4 0.4 3 0.3 3 0.3
Brand Reputation 0.10 4 0.4 4 0.4 2 0.2
Product
Customization 0.10 4 0.4 3 0.3 4 0.4
Product Quality 0.12 3 0.36 3 0.36 3 0.36
Service Quality 0.12 2 0.24 3 0.36 4 0.48
Customer
Satisfaction 0.12 2 0.24 3 0.36 4 0.48
Research and
Development 0.09 2 0.18 3 0.27 1 0.09
Price Range 0.14 2 0.28 3 0.42 4 0.56
Advertising 0.11 1 0.11 3 0.33 2 0.22
Total 1 2.61 3.1 3.09

The Competitive Profile Matrix (CPM) reveals that IKEA lags behind its
competitors with a score of 2.61. According to the matrix, the company will have a
competitive advantage if it pulls these factors at a rate of 2 to 3, and much better at a
rate of 4: service quality, customer satisfaction, research and development, price
range, and advertising. The aforementioned factors were minor flaws of IKEA that
contributed to the company receiving a lower score than its competitors. The company
should investigate how they intend to improve their research and development in order
to understand how they can possibly improve their minor weaknesses.

5.0 ASSESSMENT/ANALYSIS of the INTERNAL ENVIRONMENT

5.1 Profile of Current Strategy

5.1.1 Concept of Business

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IKEA, a Swedish company and the biggest furniture company in the world that
sells ready-to-assemble furniture, kitchenware and home accessories, with around 422
stores worldwide, selling affordable household items to millions of customers in more
than 50 countries. These stores are spread across the globe that are managed by the
group itself or run by franchisees outside the group. IKEA’s vision is to “create a better
everyday life for the many people”, and it’s business idea is “to offer 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” (IKEA, 2018). IKEA has set up its own
stores of production, distribution and retailing in more than 50 countries where it has
determined to adapt to the local needs as well as sourcing the raw material from local
suppliers. Other than setting its stores, there are 11 different groups of companies
owned and operated IKEA stores under franchise agreements with Inter IKEA Systems
B.V.
5.1.2 Concept of Competition

IKEA is one of the biggest furniture retailers around the globe. IKEA provides a
great range of products that are differentiated from its competitors at an affordable
cost. Cost effectiveness is one of the solid bases of IKEA thanks to the combination of
economies of scale and technological integration. IKEA involves its customers in the
value chain and supports the uniqueness and differentiation strategy. IKEA’s target
market is also middle class people. IKEA’s home improvement and furnishing chain
has traditionally engaged in new market development in an aggressive manner. They
also benefit from strategic alliances to a maximum extent and the formation of strategic
alliances is placed at the core of IKEA business strategy. Currently, IKEA is in the
middle of a transformation of its business model that made it successful on a global
scale.

5.1.3 Company Self-Concept

IKEA business strategy is built upon the IKEA concept. The IKEA concept starts
with the idea of providing a range of home furnishing products that are affordable to
the many people, not just the few. It is achieved by optimizing the entire value chain,
building long-term supplier relationships, investing in highly automated production,
producing large volumes, combining function, quality, design and value – always with
sustainability in mind. The IKEA concept exists in every part of the company, from
design, sourcing, packing, and distributing through the business model. Their vision
also goes beyond furnishing. IKEA wants to create a better every day for all people
impacted by their business.

5.2 Assessment of the Firm’s Strengths and Weaknesses

5.2.1 Management Dimension

IKEA is a worldwide recognized home furnishing seller. It has developed quickly

since it was started in 1943 by Ingvar Kampard. IKEA is offering more than 9,500
products including a complete range of home and office furnishings, equipment,
lighting and accessories. Although IKEA spends a lot on research and development, it
has problems matching up to one of its primary standards – quality products and low
prices. Economies of scale help the company in reducing the prices but maintaining a
balance between the price and the quality can be a problem. IKEA continuously
introduces differentiated products but its business rivals are catching up with the
copies as well as with their own products. Communication barriers are a major
concern. IKEA’s management needs to maintain healthy channels of communication
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within the organization as well as with their consumers. IKEA focused on its product
development and differentiation that gives them a competitive advantage over the
others while keeping its costs of operations at a low level.

5.2.2 Marketing Dimension

In 1998, just as China's economy was beginning to expand, the Swedish retailer
established its first China location. IKEA had a hard time attracting Chinese consumers
because they saw the Nordic brand as a very hard competitor to compete. IKEA
reduced costs by half in the last decade to appeal to the Chinese market and
encouraged customers to test out goods and build their own homes from them. There
were three locations in 2006, but the goal was to have 10 by 2012. Expansion in China
has been somewhat slow by IKEA's expectations when compared to the rest of the
globe.

One of IKEA’s main advantages over competitors is its ability to coordinate with
manufacturers across the globe and test their ideas for meeting the increasing demand
for home furnishings. The company's motivating factor will always be a wide selection
of aesthetically designed, environmentally sustainable, and reasonably priced
furniture.

5.2.3 Production/Operations/Technical Dimension

There were other issues with procurement of raw materials, government

compliance with local sourcing, development objectives, and rivalry from local and
online shops that IKEA had to deal with. Another issue was how to position the
company's goods in India's price-sensitive market. Maeztu drew inspiration from the
Chinese market's success story while deciding to implement localization and channel
strategy in India.

Eight important trends were also highlighted by IKEA, including e-commerce,

social media, multi-channel, increasing demand from the middle class and women in
the workforce. IKEA expects these to have a significant impact on the business in the
near future.

5.2.4 Financial/Accounting Dimension

a. Total Project Cost/Total Investment Cost

N/A
b. Financial Modelling, including Financial Projections
N/A
c. Vertical and Horizontal Analysis
N/A
d. Ratio Analysis
N/A

5.2.5 Research and Development Dimension

Since 2006, IKEA has conducted market research in India. Though FDI was
permitted in single-brand retailing prior to 2012, the Government of India applied for
permission to open the shops in India in that year. Even though the process began in
2012, the Foreign Investment Promotion Board still had to approve it before it could
establish its first shop in Hyderabad by the end of that year. More than 30% of IKEA's
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materials must be supplied in order to meet the company's accessibility goals while
also maintaining profitability, but establishing new large-scale manufacturing partners
who comply with IKEA's IWAY conditions, a code of conduct for working conditions as
well as environmental and social responsibility, will take time. For Maeztu, it was
important to test several store formats in different parts of town, such as large-format
shops on the outskirts of town and small retail stores in the heart. When it comes to
sustainable solutions, IKEA puts a large portion of its profits back into the innovation of
the new product and the expansion of their current stores, all while keeping the final
cost to consumers as low as reasonably achievable.

5.2.6 Management Information System/s N/A

5.3 The Internal Factor Evaluation (IFE) Matrix

Key Internal Weight Rating Weighted

Factors Score
Strengths
Design and 0.15 3 0.45
Creation
Affordability 0.18 3 0.54
Brand 0.19 4 0.76
Recognition
Market 0.2 3 0.6
Research
Weaknesses
Poor Product 0.13 2 0.26
Quality
Difficulty for 0.15 1 0.15
Assembling
Total 1 2.76

The IFE Matrix analysis shows that IKEA furniture is internally good in terms of
its internal factors performance. The total weighted score of 2.76 shows that IKEA has
a strong internal position. IKEA was able to achieve its objectives in maintaining its
brand recognition to the market. It is essential that IKEA should conduct more market
research and innovative strategies to be able to assess the weaknesses and to ensure
its long-term sustainability in the competition.

6.0 The Strategic Agenda/Recommendations

6.1 Corporate Analysis of Matrices

6.1.1 SWOT Matrix

Strengths Weaknesses
Design and Creation Poor Product Quality

Affordability Difficulty for Assembling

Brand Recognition

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Market Research

Opportunities Threats

New Market Strong Competition

Expansion Sustainability Problem

Online Shopping & More Lower Market Penetration

Storefronts

Strengths

IKEA is well-known throughout the globe for the innovative designs and high-
quality manufacturing it employs. When it comes to purchasing furniture, most people
think of IKEA as the first place to go because of its trendy and sophisticated designs.
This broad variety of styles is also accessible to the ordinary person, and it helps bring
your purchases to your house, which reduces the expenses for consumers. The fact
that IKEA has been around since 1914 accounts for much of its positive public
perception. Along with a strong marketing staff, IKEA has improved its market
research, allowing it to expand into new areas.

Weaknesses

Several weaknesses exist at IKEA, which have the potential to harm the
company's market share and reputation. Most people were alarmed by the low quality
of their goods. After just a few days of use, several customers have complained that
their furniture has struggled to hold up. When it comes to everyday necessities, quality
seems to be much more essential when it comes to purchasing choices. Also,
Consumers have a hard time assembling their furniture due to losing important parts
like screws and other tools for assembling. Due to IKEA's global expansion, delivery of
goods may cause logistical challenges.

Opportunities

Because of the intense rivalry in the furniture industry, IKEA has the advantages
of being a well-known brand. This gives the business the information it needs to
operate more efficiently. More locations could be reached, which would result in more
new consumers and therefore more income. More businesses are going online thanks
to technological advancements on the internet. As a result of this platform, IKEA is
able to reach a larger audience. More shops should be opened throughout the nation
so that everyone may have access to this brand in order to keep all the new customers
happy and create a positive experience for users.

Threats

Increasing rivalry among home furnishings businesses threatens to harm IKEA's

advantage in the marketplace. Global brands are prepared to acquire IKEA's
customers. Many green buyers emphasize sustainability while discussing products
these days. Now is a bad moment for the environment because of the waste of raw
materials and the enormous manufacturing. In addition, the number of new customers
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purchasing from IKEA is dropping. Given the dangers facing IKEA, it would be
disastrous for the business's growth if the company came up with specific remedies to
preserve its market dominance.

6.1.2 SPACE Matrix

SUB-FACTORS SCORE AVERAGE AXIS VALUE

Industry Attractiveness

Growth Potential 5

Profit Potential 5

Financial Stability 5 4.2

Complexity of Entering the Market 3

Manufacturer Bargaining Power 3 0.85

Competitive Advantage

Market Share -2

Product Liquidity -3 -2.5

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Product Life Cycle -2

Customer Loyalty -3

Financial Strength

ROI 5

Liquidity 5

Debt Ratio 3 4.4

Cash flow 5

Inventory Turnover 4 0.6

Environmental Stability

Technological Change -3

Inflation Rate -3

Demand Volatility -2 -3.2

Competitor Price Range -4

Price Elasticity -4

According to the matrix, the IKEA Company belongs to the Aggressive position,
where the industry is stable and the company has a competitive advantage to thrive in
such an industry. Despite threats to new entrants such as the emergence of
technology, it may be able to maintain its position by focusing on increasing market
share and enhancing the brand image.

6.1.3 BCG Matrix

Relative Market Share

High Low
Growth

High
Market

Star Question Mark

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IKEA’s Furniture

Low Cash Cow Dog

The matrix shows that IKEA’s furniture is considered to be both cash generators
and cash users. Since IKEA’s furniture is the main product of the company and is
considered to be operating in a high growth industry and has a high market share,
IKEA should invest more money in their furniture products. To maintain its position the
company should consider developing their product and service that suits Indian taste
and could penetrate more in the market with products that are not present from other
competitors such as sofas and mattresses.

6.1.4 IE Matrix

Weighted Average : IFE matrix: 2.76 EFE matrix: 3.36

The IFE Total Weighted Score

(Strong) (Average) (Weak)
4.0 3.0 2.0 1.0

I (grow & II (grow & III (hold &

The EFE Total Weighted Score

(High) 3.0
build) build) maintain)

IV (grow & V (hold & VI (harvest or

(Medium) 2.0
build) maintain) divest)

VII (hold & VIII (harvest or IX (harvest or

(Low) 1.0
maintain) divest) divest)

The IE matrix suggest that the business of IKEA should grow and build, which is
derived from the data of the weighted score by both the external factor evaluation
(EFE) and internal factor evaluation (IFE) of 3.36 and 2.76. The IE matrix suggests
that the company should take on aggressive and tactical strategies focusing on market
penetration, market development and product development.

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6.1.5 Grand Strategy Matrix

Quadrant II Quadrant I

Quadrant III Quadrant IV

IKEA is one of the biggest furniture manufacturers globally. They are in an

excellent strategic position which is in quadrant I. It means that they have a strong
competitive base and they operate in fast moving growth markets. IKEA should better
adopt and pursue strategies such as market development, market penetration, product
development etc. IKEA should also focus and make the current competitive base
stronger.

6.2 Strategic Choices

The strategic analysis performed using the various matrices resulted in IKEA's
aggressive position. IKEA has been successful in dominating its global market.
However, due to the main issue mentioned, the group suggests that IKEA should pay
more attention to their Research and Development Team. They need to learn more
about the Indian market and how they can compete with its strong competitors given
the various factors that they needed to improve. This is based on the CPM, the
company will have a competitive advantage and overall superiority if it pulls these
factors at a rate of 2 to 3, and significantly better at a rate of 4: service quality,
customer satisfaction, research and development, price range, and advertising. The
success of entering the Indian market is determined by how well the business fits into
India's perceptions of service, product quality, and price. As an example, it has been
stated in the case that Indians prefer having assembling services rather than the
culture of IKEA in which consumers only assemble it themselves. Hence, it is very
important that they should enhance their research and development to address and
strengthen their weaknesses against their competitors.

7.0 Implications of the Strategic Agenda

7.1 Management

IKEA is a privately held retailer of home goods founded in 1943.

Additionally, it created Australia's first market in 1975. Indeed, IKEA can
effectively allow the business to generate money; without question, its
successful leadership is a component in the company's success; talent is the
enterprise's prosperity and its biggest asset. At IKEA, each function has its team
of employees that report to the function's managing director (IKEA, 2018).
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To accomplish this worldwide goal, IKEA is renowned for its fast

internationalization from its Swedish roots and growth into nations with
markedly distinct cultures from the Swedish national culture. This means that
IKEA has had to adapt to the many settings in which it works continuously. The
business initially used a management structure in which only Swedes were
recruited for managerial positions to maintain the organization's 'Swedishness.'

To maintain a competitive edge on the global stage, IKEA has had to

transform itself from an ethnocentric company to one that welcomes individuals
from all over the globe and employs a diverse staff. This is shown on the
organization's recruiting web pages in several countries, where prospective
workers are encouraged to 'be themselves' while adhering to common corporate
principles such as 'simplicity', 'hard work', and so on.

7.2 Marketing

Let it be known that IKEA has been using ‘sophisticated customer

research and market research’ as the basis of their marketing strategy. It has
been successful globally. Ironic as it may sound, this strategy enables IKEA to
discover what they lack and needs to develop before they enter the Indian
market, thus giving them a hard time penetrating it. “IKEA actually sends design
experts into people’s homes to listen to their concerns and provide feedback.
This allows IKEA evangelists to make marketing decisions based on people’s
real-life experiences rather than just surveys or data.” (Walgrove A. 2014). Due
to the difficulties in entering the market of the said country, IKEA needs to
enhance their marketing strategy and might as well personalize it exclusively
for the country if they really want to take the lead in the furniture industry in
India.

7.3 Production/Operations/Technical

It is evident that a vital part of IKEA’s success is down to their successful

operations management. IKEA should focus on differentiating their products
while enhancing its product quality so they could have and maintain their
competitive advantage. However, they should also keep small lead times,
reduce human, financial capital and other resources to fulfill customers’
requirements and satisfaction. IKEA should also consider minimizing the
amount of equipment, materials, parts and workers’ time, they are absolutely
necessary to add the value of the product. JIT should be properly implemented
so there would be a smooth process of production. This would aid in cost-
cutting and might perhaps lower product prices to make them more affordable
to Indians.

7.4 Finance/Accounting

N/A This would aid in cost-cutting and might perhaps lower product
prices to make them more affordable to Indians.

7.5 Research and Development

IKEA's research and development is a crucial focus in their efforts to expand

into the Indian market. Their R&D should be more focused on how they plan to
strengthen their minor vulnerabilities, as identified in the competitive profile matrix.
One of them is their service quality; the corporation should learn more about whether
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they should push their "Do It Yourself" mentality when it comes to assembling their
products or whether they should adapt to Indian culture and consider offering product
assembly services. Another factor to consider in their R&D is how they plan to
increase product quality, as Indians love furniture that lasts a long time. Product pricing
should also be addressed, because while IKEA advertises that its products are low-
cost, they are quite expensive for Indians. R&D should look into ways to reduce costs
in order to make prices more reasonable for Indians.

7.6 Management Information Systems

N/A

7.7 Corporate Social Responsibility

N/A

7.8 Environmental Concerns

Because IKEA wants to improve the quality of its products, let it be known that a
part of their research and development should focus on how the process of getting raw
materials for their products affects the environment. IKEA has already been charged in
another market of having components or ingredients in their products that are toxic to
individuals and harmful to the environment. To avoid such problems, the corporation
should think about what sorts of chemicals, raw materials, and processes to use that
aren't or aren't as detrimental to the environment. And in a manufacturing company it is
unavoidable that as they continue to innovate and enhance their products the climate
footprint would also increase.

To lower the company's overall carbon footprint, it is suggested that the

company focus on using more sustainable materials in their products, such as
renewable and recycled materials. To lower its energy use, the corporation should
continue to deploy wind turbines or solar panels. Waste reduction and recycling should
also be considered by the company. IKEA might also move through with plans to
create inexpensive, recyclable, and energy-efficient product designs that encourage
customers to be more environmentally conscious.

8.0 Financial Projections and Goal Settings

8.1 Projected Financial Statements with assumptions

N/A

8.2 Recommendations for annual goals and policy according to projections.

N/A

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