There are various reasons why a firm could decide to go abroad. In the case of IKEA, its decision to enter India would be based on some of the following reasons:

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• Economies of scale
• Profit advantage/tax benefits
• Unique product/Cost Leadership
• Market saturation in countries where it already has a presence

With the increasing growth rate in South-East Asian countries, IKEA stands to benefit from an expansion to these territories. With a number of developed cities and a young population in India, the furniture business seems lucrative as there is slight emphasis towards lifestyle and IKEA is able to benefit from its unique, low-priced products.​