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Entry Strategy of IKEA into Brazil
Pages 6 (1506 words)
To: The Director of International Marketing - BCG From: Consultant Subject: IKEAs Entry into Brazil Date: Report Executive Summary According to Inter IKEA Systems B.V. (n.d.), IKEA was established in 1943 by Ingvar Kamprad as a mail order business in Sweden.
IKEA through its various marketing strategies has created a steady demand for its products. The company also prides itself in being innovative and has managed to get customers to accept products that they would not normally accept through design changes. In the initial stages IKEA expanded its business into new markets outside of Sweden including Norway by direct entry and by acquiring other businesses. However, over the years IKEA has been focusing on expansion of its business through franchising. IKEA now operates over 325 stores which are located in 35 countries. An analysis of the Brazilian market indicates that it is a very promising environment for IKEAs products. The standard of living of working class individuals have improved and this has increased their demand for various products including home furnishings. Upper and middle class Brazilians have high disposable income and are willing to spend on high quality brand name products and so it would be good if IKEA offer goods for different segments of the market instead of focusing on just low priced products. Additionally, research indicates that 59% of Brazilians have a preference for foreign brands over home brands. However, there are certain obstacles in the political and legal environment that may negatively impact the success of IKEAs business. Furthermore, the currency of Brazil is overvalued. ...
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