Question

Name 3 reasons why IKEA if effective in developed economies.

Name 3 reasons why IKEA if effective in emerging economies.

Answer 1

Here are a few points why IKEA is so effective in developed economies:

1. Cost effectiveness - IKEA uses inputs from around the world, not just India and China which makes its model very cost effective and timely.

2. Adapting to the country - IKEA adapts its products according to the country of operations. Same goes for the service style and delivery.

3. Becoming a household name - In whichever country IKEA operates, it becomes a household name. This is because of the company's impeccable planning before and after opening its first store in a country.

IKEA, like all the giants of the world wants to keep expanding its operations. Companies like Amazon, Microsoft, Apple, Google, etc. already have a global presence. IKEA opened its first store in India last year which can be categorized as an emerging economy. The arrival of a brand like IKEA has spurred the competition in the Indian furniture market. Here are a few points on why IKEA would be effective in an emerging economy like India's:

1. This would have a positive impact on the economy as well as the overall quality of the product due to increased competition.

2. For IKEA, this would generate huge revenues in the short and the very short run as the local companies would take time to adjust to the new adjusted market demand.

3. Also, in emerging economies like India's, the furniture sector is not very structured. There is a lack of competition and IKEA can and will make use of this to its advantage.