IKEA, the largest home-furnishing retailer in the world, is globally acclaimed for its prowess in offering innovatively designed durable furniture at low prices. The Swedish furniture giant is all set to launch its first store in Hyderabad in mid-2018 and has reportedly invested a whopping 1,000 crore (US$ 150 million) in India since 2016 for the establishment of infrastructure, together with land and distribution hubs. In developed markets such as USA, Sweden or South Korea, IKEA is predominantly positioned as a low-priced brand targeted at the masses. However, in emerging markets such as China, Russia, and now India, where 'affordability' is the key to survival, it must capitalize on a burgeoning middle class that aspires to international lifestyle brands. Unlike their foreign counterparts, Indian consumers would be much more likely to prefer an all-inclusive variety and design choices under a single roof. Mahesh Shah, the CEO of Home Centre asserts that IKEA's entry in India would prompt a metamorphosis in the Indian furniture market and would challenge value retailers such as Furniture Bazaar. To achieve this, the company must jettison its earlier "one-size-fits-all" mantra and accept the premise "horses for courses", which implies that all markets are different and unique. Source; 4th FLAME International Conference on Research and Teaching Cases, June 21st, 2018 & June 22nd, 2018

a) Explain how IKEA could utilize strategic cost drivers to attain a low-cost advantage in the market. [10 Marks]

b) Discuss any five (5) competition-based pricing methods that IKEA could in the Indian market. [15 Marks]

c) Discuss the phases of the product lifecycle that KEA’s furniture will go through in the South Korean market. [15 Marks]

Answer rating: 100% (QA)

a IKEA could utilize various strategic cost drivers to attain a lowcost advantage in the market These drivers include 1 Economies of Scale By producin... View the full answer