“To create a better everyday life for the many people”
Supply Chain Risks
In-order to establish a long term competitive advantage, a strong relationship with local supplier is crucial. One could argue that as a foreign investor IKEA lack the understanding of culture to develop a relationship with local suppliers. Moreover, the current incumbents are likely to create a strong foothold with these suppliers to increase entry barriers. However, IKEA can mitigate this risk by providing competitive price to the suppliers. Also, the international brand image of IKEA can attract suppliers since they provide a long term security.
Transportation infrastructure is undeveloped and inefficient. Lanes and load capacity are often lower than actual communal demand causing severe congestion especial in urban region of India. These unreliable services would affect IKEA’s ability to distribute its goods from its distribution centres.