​Product: Considering that IKEA’s range of products is very different from the traditional Indian style of furniture, there is a risk that consumers in India may not adopt the Scandinavian designs. Thus, IKEA will carry out an exhaustive market survey to identify what the average consumers taste.

 

Another important concern is related to product differentiation. IKEA retains the same designs throughout the world with a few exceptions. Although this strategy has worked in IKEA’s favor in other markets, the current Indian furniture market consists of small manufacturers who work on made-to-order basis. Thus, there is a slight risk that some consumers may not prefer owning furniture that is standardized. However, due to the low price and same-day delivery service offered by IKEA, the consumers may adopt IKEA furniture.

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Service: IKEA involves the consumer in its value chain by expecting them to transport their own furniture. However, the Indian consumer is not accustomed to this and may hesitate to adopt IKEA. Thus, IKEA can provide a same-day delivery service to consumers to attract them and mitigate this risk.



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Competitors: It can be argued that IKEA may face certain barriers to entry that arise from experience curve effects that give incumbents a cost advantage because they have learnt how to do things more efficiently. This will require IKEA to carry out a complete due diligence before they open their stores and start carrying out business. Also, with time they will be able to learn more about the market and what strategies work better.

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Branding: In the case of marketing, local firms have a very good knowledge about the culture and may be more successful in attracting consumer attention. This is not a major concern for IKEA because they can hire the local managers and graduates who will help them to understand the consumers’ background before implementing their plans.