Emerald Emerging Markets Case Studies

Can IKEA adapt its service experience to India?

Tom McNamara Irena Descubes
Article information:
To cite this document:
Tom McNamara Irena Descubes , (2016),"Can IKEA adapt its service experience to India?", Emerald Emerging Markets
Case Studies, Vol. 6 Iss 1 pp. 1 - 14
Permanent link to this document:
http://dx.doi.org/10.1108/EEMCS-10-2014-0245
Downloaded on: 05 October 2016, At: 02:09 (PT)
References: this document contains references to 69 other documents.
To copy this document: permissions@emeraldinsight.com
The fulltext of this document has been downloaded 55 times since 2016*
Downloaded by AIR UNIVERSITY PAKISTAN At 02:09 05 October 2016 (PT)

Users who downloaded this article also downloaded:

(2016),"Hacienda Flandes: the ups and downs of a Colombian coffee farm", Emerald Emerging Markets Case Studies, Vol. 6
Iss 1 pp. 1-23 http://dx.doi.org/10.1108/EEMCS-06-2015-0117
(2016),"ICON stores: managing a new business venture", Emerald Emerging Markets Case Studies, Vol. 6 Iss 1 pp. 1-20
http://dx.doi.org/10.1108/EEMCS-03-2015-0030

Access to this document was granted through an Emerald subscription provided by emerald-srm:543700 []
For Authors
If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service
information about how to choose which publication to write for and submission guidelines are available for all. Please visit
www.emeraldinsight.com/authors for more information.
About Emerald www.emeraldinsight.com
Emerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of
more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online
products and additional customer resources and services.
Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication
Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation.

*Related content and download information correct at time of download.

 Can IKEA adapt its service experience to
India?
Tom McNamara and Irena Descubes
Tom McNamara is based
at Supply Chain
Management, ESC
Downloaded by AIR UNIVERSITY PAKISTAN At 02:09 05 October 2016 (PT)
Rennes School of
Business, Rennes,
France. Irena Descubes
is based at the
Department of Marketing,
ESC Rennes School of
Business, Rennes,
France.
Disclaimer: This case is written
solely for educational
purposes and is not intended
to represent successful or
unsuccessful managerial
decision making. The author/s
may have disguised names;
financial and other
recognizable information to
protect confidentiality.
DOI 10.1108/EEMCS-10-2014-0245
IKEA, the world’s largest furniture retailer, is known for its reasonably priced functional
furniture that incorporates minimalist Swedish design. The company is also known for the
grand safari that it forces visitors to go on every time they enter one of its cavernous stores.
But many people believe that this is what makes shopping at IKEA such a unique service
experience. The fact that customers must navigate their way through a tortuous maze
(exploring every nook and cranny of the store in the process) to find the items they want,
then carry them to the checkout counter, haul them to their cars, unload and drag the items
into their homes and then assemble them with cartoon-like instructions, only seems to make
the service experience all the more endearing. How else would you explain the fact that
almost 775 million people visited IKEA in the last year alone (Shanely, 2014), and that its
catalogue, with 210 million copies being distributed annually, is twice as popular as the
bible (Wallop, 2012).
Ikea has over 360 stores spread out over roughly 50 countries (ikea.com). The year 2013
was a record year for profits, with global sales coming in at almost 28 billion euros (BBC
News, 2014). While Europe makes up about 70 per cent of IKEA’s sales (one in ten
European homes contains something that was bought at IKEA (Andreea and Oana, 2013)),
strong growth was also seen in North America, China and Russia. But the company is
looking to expand further afield into new geographic locations in search of even more
growth. IKEA wants to roughly double sales by the year 2020 (Shanely, 2014), and one
logical place to find new opportunities is in emerging markets.
Recently, IKEA announced that it has plans to expand into India (Bailay, 2014). And while
the potential for over 1 billion new customers is attractive, there are many serious
challenges that the company must face. One is IKEA’s commitment to offering almost the
exact same selection of items, at comparable prices, no matter where a store is located.
Another is IKEA’s insistence that customers have the same service experience in all
countries (Edvardsson et al., 2006; Johansson and Thelander, 2009).
To do this, IKEA tries to maintain the same ratio of salespeople to customers in all of its
stores in all of the markets in which it operates, as well as putting great emphasis on training
and employee development (Wei and Zou, 2007). IKEA uses a standardized product and
marketing strategy in its international expansion efforts, trying to have the same overall
product selection, pricing, presentation, branding and service experience no matter where
a store is located (Jonsson and Foss, 2011; Usunier and Lee, 2009). But the company has
been known to adapt its model to local cultures. In the USA, its wandering path format of
store exploration was initially found to be frustrating and a time waster. As a result, IKEA
introduced short-cuts and better directional indicators for shoppers (Evans and Bridson,
2005). In China, showrooms have mosquito nets, chopsticks and decorative water
fountains on display to prove that Swedish contemporary design fits in well with the
VOL. 6 NO. 1 2016, pp. 1-14, © Emerald Group Publishing Limited, ISSN 2045-0621 EMERALD EMERGING MARKETS CASE STUDIES PAGE 1
 traditional Chinese home (Pan, 2007). And just like at McDonald’s, when a product is found
to work in one market, the company is not afraid to try it in another. An example of this would
be the introduction of a sleeper sofa that IKEA specifically designed for US tastes.
Eventually, the item became so popular that it was sold in Europe as well (Eskander and
Aal, 2010).
But despite its success, according to IKEA’s head of design, Mr Marcus Engman, the
company is facing somewhat of an existential crisis. Owing to increased travel, increased
immigration (as well as emigration) and increased communication due to the internet, a
question can be asked – What exactly is “Scandinavian” and just what type of image, and
service experience, is IKEA hoping to create and maintain (Shanely, 2014)?

IKEA’s service experience

IKEA, while being a world famous retailer of household furnishings, sees itself as a service
company, providing customers a unique and memorable shopping experience
(Edvardsson and Enquist, 2011). The company’s goal is to “create a better everyday life for
the many people” (ikea.com), which it tries to do by providing well-designed furniture at a
low price. A major factor in how IKEA manages the way customers encounter and
experience its service is in the configuration of its stores. Visitors must embark on a winding
Downloaded by AIR UNIVERSITY PAKISTAN At 02:09 05 October 2016 (PT)

journey that unfolds as you follow arrows marked on the floor, taking them through all parts
of the store. It is not a voyage for the faint of heart! But there is a scientific method to IKEA’s
madness. As people travel through the store, they are forced to interact with the items that
are offered for sale and engage in an “experience” in what marketing people call IKEA’s
“servicescape” (Huotari and Hamari, 2012). It is interesting to note that when IKEA first
started its “natural tour” concept, the average facility was 19,000 square metres in size.
Today, the average IKEA store is twice as big, averaging 40,000 square metres of surface
space (Bolton et al., 2014). The benefit to the way IKEA configures its servicescape is that
shoppers are encouraged to physically interact with the items for sale, easily imagining
what they would look like in their own home or apartment. Aiding all of this is something
called “experience rooms” which are strategically located throughout the store. These
simulated rooms and small apartments allow customers to actually see what an item might
look like in their homes before they purchase it. While extremely practical, these mock ups
also allow for a greater emotional experience as well, as customers, again, physically
interact with the items (Edvardsson and Enquist, 2011). The concept of experience rooms
was extended to the kitchen with IKEA’s innovative “kitchen planner”. This is a system that
allows you to input actual measurements from your home into a computer to see what a
virtual version of a kitchen will look like before you buy it (Edvardsson and Enquist, 2011).
Another value-adding service provided by IKEA is a smartphone app that allows you to see
what an item would look like in your home before you buy it (Olenski, 2013). These
additional features provide customers with what experts call a “hyper-real” experience,
which only adds to the impact of IKEA’s overall service experience (Edvardsson et al.,
2005).
From the minute you enter an IKEA store, the company does everything possible to try and
engage you in a relationship. Part of this relationship, the company believes, is allowing you
to explore its stores at your own pace. Another part is offering reasonably priced meals and
play areas for children. The objective is not so much as to make a one off sale, but rather
to create a pleasant service environment, that also highlights IKEA’s value proposition.
IKEA has a loyal and broad customer fan base, with many appearing to be almost in love
with the company. For some strange reason, forcing shoppers to engage in forced labour
at its stores is apparently the basis for this “love affair”. When you shop at IKEA, you are
intimately involved in almost every facet of the purchase, from finding the item, getting it
home and then finally assembling it yourself (usually with horrible directions). This
investment in time and labour has led to something known as the “IKEA effect” (Norton
et al., 2011). That is to say, many people appear to exhibit an increased (irrational?)

PAGE 2 EMERALD EMERGING MARKETS CASE STUDIES VOL. 6 NO. 1 2016

 personal attachment to the things that they buy at IKEA, thanks to this personal
involvement. The act of shoppers co-creating value with IKEA only seems to enhance the
service experience and thus makes it easier to develop these relationships. It is in the
successful management of these relationship building interactions and experiences that
IKEA excels (Edvardsson and Enquist, 2002, 2011; Edvardsson et al., 2006).
Perhaps more importantly, it is IKEA’s ability to outsource a large part of its transport and
production operations to willing customers (in effect, a form of free labour) that is a key
component to the company’s business model and success, as well as how the company is
able to offer low prices and still make a profit (Edvardsson and Enquist, 2011).
IKEA’s “one size fits all” expansion strategy has met some resistance in the past. In Saudi
Arabia, many customers initially did not understand why they were being forced to carry
furniture to their cars when there were so many able bodied employees standing around
(Eskander and Aal, 2010). In China, a large number of consumers were put off by the fact
that they had to struggle to bring unwieldly packages home by public transportation. Many
reportedly had difficulty putting their purchases together because they were not used to
using the types of small tools provided (Burt et al., 2011; Wei and Zou, 2007). It is still far
from clear how Indian consumers will react to IKEA’s standardized concept of service.
Downloaded by AIR UNIVERSITY PAKISTAN At 02:09 05 October 2016 (PT)

The retail market in India and IKEA’s strategy

India is a culturally diverse country that is home to over 1.2 billion people. Its dynamic
economy is projected to have real annual growth of almost 6 per cent (at current rates, the
country is expected to be one of the “Top 5” economies in the world by 2030) (OECD,
2013). Strong economic development over the past decade has increased living standards
and created a vibrant middle class that is hungry for consumer goods (there are almost 30
million Indians with a disposable income of over US$30,000) (Das, 2014a). Trends such as
increased urbanization and higher incomes, combined with the growing sophistication of
consumers and their increased demand for foreign brands, should only make India an even
more attractive market in the near future (Bharadwaj et al., 2005; Das, 2014b).
The retail industry is an extremely important part of the Indian economy, responsible for
approximately 10 per cent of GDP and employing almost 8 per cent of the population (Sikri
and Wadhwa, 2012). Retailing in India can presently be broken down into two categories:
organized and unorganized. The unorganized part is dominated by small privately owned
stores, known as “kirana” shops, as well as kiosks and street vendors (Gupta and Tandon,
2013). The organized category comprises licensed retailers (who are also registered to pay
taxes) and national brands. These would include large retail chains as well as super
markets and hyper-markets. It is believe that the organized portion of the retailing sector is
only responsible for between 3 and 5 per cent of the sales volume, but this is expected to
grow to 20 per cent by 2020 (Halepete and Iyer, 2008; Hamil and Priyadharshini, 2014;
Khare, 2012). As India emerges from the global recession of 2008 and further opens and
liberalizes its markets, retailing should offer a huge opportunity, with estimates expecting it
to be worth US$ 675 billion by 2016 (BMI, 2011).
While general retailing makes up a large part of the Indian economy, unfortunately for IKEA,
the market for furniture is still relatively small, responsible for an estimated 0.5 per cent of
GDP and ranked 14th in the world (IAFP, 2015). It also suffers from a lack of organization
and consolidation, with small handcraft production accounting for an estimated 85 per cent
of total furniture output in India (Popli and Rao, 2009). But just like with retailing in general,
this segment is poised for substantial growth, with one report calling for a 26 per cent
compounded annual growth rate between 2014 and 2019, meaning this sector could
eventually be worth almost 36 billion euros (Research and Markets, 2014a, 2014b).
Well-known local furniture brands would include Godrej Interio (with a self-reported 15 to 20
per cent market share), Zuari, USHA Lexus Furniture, Durian, Damro, EVOK and Wipro
Furniture, just to name a few. In the organized domestic sector, there are believed to be

VOL. 6 NO. 1 2016 EMERALD EMERGING MARKETS CASE STUDIES PAGE 3

 5,000 firms operating, supplemented by an additional 10,500 furniture importers (Imaya
and Padhmanaban, 2013; Khan, 2013; Narayanan, 2013). All would have the competitive
advantage of already being established, thus possessing valuable insights into the Indian
consumer. But there really are no furniture brands with a nationwide chain of brick and
mortar stores in India (Chakraborty, 2014). The fractured and disorganized nature of
furniture retailing means that there is great potential for consolidation or entry by a well
managed, and well financed, outside player.
IKEA has announced that it has plans to eventually open stores in the National Capital
Region, Mumbai, Bangalore and Hyderabad, reportedly signing agreements with the
Indian states of Karnataka and Telangana. The company was one of the first to take
advantage of a 2012 decision by the Indian government to allow 100 per cent
foreign-owned companies to do business in the country (previously, foreign companies
needed a local Indian partner) (Bhattacharjee and Kumar, 2014; Bailay, 2014). IKEA has
the full support of local government officials, something extremely important in a place that
was once known as the land of the “License Raj”, a term that unkindly refers to the tortuous
process of paperwork and red tape that foreign companies had to go through to do
business in India (The Economist, 2011).
IKEA’s strategic initiative in India is expected to result in an investment of about 1.5 billion
Downloaded by AIR UNIVERSITY PAKISTAN At 02:09 05 October 2016 (PT)

euros, with each store requiring nearly 80 million euros to open (and taking about three
years from the time a location is identified until the time customers can walk through the
doors). The company also plans to source a lot of material locally, creating a boon for local
suppliers. IKEA says that it is “focused on finding suppliers with the right competence and
strategic fit, at the same time developing and growing existing suppliers”. India has been
a source of material for IKEA for over 25 years (Business Standard, 2013; The Times of
India, 2014).
India has some of the lowest manufacturing costs found on the planet, making it an
extremely attractive place to do business (Bruce, 2014). But the country is not without its
pitfalls and dangers. While experiencing rapid economic growth, it is still a relatively poor
country with some major internal problems. One would be the poor state of India’s
infrastructure, especially its roads and railways (Aiyer, 2014). Restricted capacity at India’s
seaports can add days to the amount of time it takes to ship an item (Bruce, 2014). As a
result of these shortcomings, many companies, especially online retailers, are making
substantial investments in their own logistics businesses (Bose, 2014). Corruption is also
seen as an ongoing problem, causing a drag on growth and a deterrent to foreign investors
(Desai, 2014). Burdensome regulations would be seen as another impediment. It takes, on
average, 27 days to start a business in India. The average for countries belonging to the
Organization for Economic Cooperation and Development (OECD) is less than half that,
coming in at 12 days. The procedure for getting the necessary permits to start new
construction can take 196 days (TMF Group, 2013). Labor laws are also seen as archaic
and restrictive, making it difficult and costly for companies to manage their workforces. The
Indian government is continuing with reforms in an effort to improve its business climate,
but for many, progress is seen as being too slow (Halepete and Iyer, 2008).
Chief Executive Officer (CEO) Mr Peter Agnefjall is coy about IKEA’s strategy, saying that
the company is still in the process of “defining the entry plan” with regard to India. He says
that he is “focusing on existing stores and markets” (Business Standard, 2013). But it is
clear that IKEA sees a huge potential in the Indian market. A company executive was
quoted as saying:
India is an important market for IKEA and we are currently defining the entry plan. The most
important priority is to find the right location for our stores at the right price in major cities, with
easy access to public transport and a good road network (Business Standard, 2013).

The first IKEA store is expected to open sometime in 2016 (rumours are that it will be
located in the city of Hyderabad) (The Times of India 2014).

PAGE 4 EMERALD EMERGING MARKETS CASE STUDIES VOL. 6 NO. 1 2016

 Trying to understand service in an Indian context
In IKEA’s defense, bringing their service experience to India should not be too difficult.
Indians are used to horrible service and horrible service experiences. A recent survey by
Verint, a consultancy, showed that 74 per cent of Indian customers reported being satisfied
with a service even when that service was terrible. But service is something that is
becoming increasingly important, with more and more Indians reporting that they are ready
to pay more for higher levels of service (Verint Press Release, 2013).
In an effort to better understand Indian consumers and Indian tastes, IKEA has begun
sending representatives to meet potential customers to gain an insight into what their hopes
and expectations are regarding a pleasant service experience. They are even visiting
people in their homes to get a better picture of what “life at home” in India is like, and to see
if it is congruent with IKEA’s understanding of what a “home” is (Business Standard, 2013).
The company is also speaking with local authorities in some of the bigger cities, again, in
the hopes of having a better understanding of the markets that they will eventually be doing
business in. One of the most important initiatives taken by IKEA is the creation of a new
product development centre in India itself (The Hindu, 2013).
Recent studies have shown that Indian consumers’ attitudes about a particular store are
Downloaded by AIR UNIVERSITY PAKISTAN At 02:09 05 October 2016 (PT)

positively linked with the location and convenience of that store and the trustworthiness of
the staff, as well as how helpful they are (Das, 2014b). It has also been shown that Indian
consumers have a preference for larger retailers (as compared to the local “mom and pop”
kirana shops that dominate the retail sector) in terms of cleanliness, promotional offers and
the availability of exclusive store brands (Goswami and Mishra, 2009; Joseph et al., 2008;
Khare, 2012). They are also becoming more conditioned to the concept of “one stop
shopping” in which many of their consumer needs can be fulfilled in one store or one
location (Das, 2014a; Srivastava, 2008). One study found that younger people were more
likely to visit a large name brand outlet, and that those who remained in the store for at least
two hours said that shopping was a fun activity and a way to release stress (Ghosh et al.,
2010a, 2010b). Promisingly, this would play right into the hands of IKEA and their service
experience.
Many of the attributes of consumer behaviour found in general retailing would also carry
over into furniture shopping. As a result, local retailers are showing an increased
appreciation for just how important visual merchandising is, with its creative use of colours
and graphics, when attempting to favourably influence consumer perceptions and
behaviour. Many furniture retailers in India now recognized that good floor design and
imaginative three-dimensional displays are important factors in both increasing market
share and encouraging impulse buying (Mehta and Chugan, 2014), something that IKEA
has understood for years.
Ambience and store environment are increasingly becoming an important element in
determining where Indians shop (Ghosh et al., 2010a, 2010b; Joseph and Singh, 2013;
Khare, 2012). India is known for her hot and humid climate, and the summer months are
notorious for electricity shortages (Bruce, 2014). Stores that can provide a comfortable
well-lit temperature controlled shopping environment should have an advantage. If IKEA
can provide the infrastructure and service support needed to duplicate the environment
found in its stores in the West, its service experience should be looked upon favourably by
Indian shoppers.
The consultancy McKinsey believes that as India grows and develops, and her citizens
become wealthier and more empowered, services will become an important part of daily
life. And that while people will want to consume material goods, they will also want to
improve and stimulate their lives through daily experiences such as visiting cafés and
going to the cinema (people can be thought of as consumers of experiences as well)
(Bharadwaj et al., 2005; Gupta, 2014; Joseph and Singh, 2013). Encouragingly, the Indian
government announced that it will allow IKEA to have cafés and restaurants, selling food

VOL. 6 NO. 1 2016 EMERALD EMERGING MARKETS CASE STUDIES PAGE 5

 and beverages, on its premises. Prepackaged food items will not be allowed for sale (The
Hindu, 2013). But whether Indian consumers will see IKEA’s service experience as a viable
outlet or alternative to other service options still remains to be seen.

The dilemma for IKEA

Owing to the effects of globalization, Indian consumers are increasingly being influenced
by Western culture, with signs that they are trying to emulate Western lifestyles (this is true
even for Indians who have not travelled abroad) (Venkatesh and Swamy, 1994). Shopping
centres, large department stores and hyper-centres are becoming ever more common,
with studies showing that Indians have a growing “predisposition towards foreign brands”
(PTFB) due to the status that they infer (Batra et al., 2000; Kinra, 2006; Maxwell, 2001), and
are increasingly ready to use their credit cards to make “impulse” purchases (Chibber,
2010; Gupta, 2011). It has also been reported that Indian consumers are placing a greater
emphasis on higher quality and improved design in the furniture products that they choose
to buy (Popli and Rao, 2009). More and more, shopping is being viewed as an enjoyable
pastime rather than a chore that must be endured. It also appears that younger people
(primarily between 16 and 35 years old) are more concerned with the acquisition of material
goods than older people (Gupta, 2011). This can only be a good thing for IKEA in a land
Downloaded by AIR UNIVERSITY PAKISTAN At 02:09 05 October 2016 (PT)

where an estimated 50 per cent of the population is below the age of 25 (Das, 2014a). But
disposable incomes in India are still relatively low, and Indian consumers can be quite
demanding, insisting on “value for money” (Mann and Rashmi, 2010; Sinha, 2001;
Punwatkar and Varghese, 2014).
IKEA’s early international expansion efforts in the 1960s and 1970s were marked by certain
degree of “trial and error”, as the company was still finding its way with regard to the
replication of its business model and marketing strategy in new countries (Jonsson and
Foss, 2011). Today, the company is fairly confident that the desire for Scandinavian
designed home furnishings (at low prices) translates well across the cultural spectrum. And
if imitation is the sincerest form of flattery, IKEA might be pleased to know that many
upscale Indian homes already have locally made (albeit pirated) reproductions of its most
popular items (Sen, 2006).Yet it is far from assured that Indian consumers will be open to
IKEA’s service experience of wandering around its enormous stores for hours, performing
unpaid labour and putting together items made out of particle board with instructions that
have no words.

Questions
Keywords: Q1. What makes IKEA’s service experience so unique?
Marketing,
India, Q2. What trends and demographics would favour IKEA’s expansion plans into India?
IKEA,
Q3. What makes India a difficult place to do business? What are some of the factors
Strategy, that would complicate IKEA’s entry plans into India?
Emerging markets,
Service experience Q4. Overall, do you think IKEA will be successful in India? Explain why or why not?

References
Aiyer, S. (2014), “Economic challenges for India’s next PM”, Al Jazeera, 18 May, available at: www.
aljazeera.com/indepth/opinion/2014/05/economic-challenges-india-next-2014518123636444401.html
(accessed 27 September 2014).

Andreea, N.N. and Oana, B. (2013), “Consumer behavior analysis of bras᝺ov residents regarding the
choice of furniture products produced by multinational companies”, Economic Sciences Series,
“Ovidius” University Annals, Vol. 13 No. 2, pp. 449-453.

Bailay, R. (2014), ”IKEA may open first India store in 2017”, The Economic Times, 15 August, available
at: http://articles.economictimes.indiatimes.com/2014-08-15/news/52846087_1_ikea-india-juvencio-
maeztu-ikea-concept (accessed 6 October 2014).

PAGE 6 EMERALD EMERGING MARKETS CASE STUDIES VOL. 6 NO. 1 2016

 Batra, R., Venkatram, R., Dana, L.A., Steenkamp, J.B.E.M. and Ramachander, S. (2000), “Effects of
brand local and nonlocal origin on consumer attitudes in developing countries”, Journal of Consumer
Psychology, Vol. 9 No. 2, pp. 83-95.

BBC News (2014), “Ikea sees record profit in 2013 as market share grows”, 28 January, available at:
www.bbc.com/news/business-25925523 (accessed 25 September 2014).

Bharadwaj, V.T., Swaroop, G. and Vittal, I. (2005), “Winning the Indian consumer”, McKinsey Q Special
Edition, pp. 42-51.

Bhattacharjee, N. and Kumar, D.K. (2014), “IKEA signs agreement with Karnataka, Telangana;
locations to be decided”, Reuters, 9 September, available at: http://in.reuters.com/article/2014/09/25/
ikea-india-hyderabad-store-idINKCN0HJ26520140925 (accessed 25 September 2014).

Bolton, R.S., Gustafsson, A., McColl-Kennedy, J., Sirianni, N.J. and Tse, D.K. (2014), “Small details that
make big differences: a radical approach to consumption experience as a firm’s differentiating
strategy”, Journal of Service Management, Vol. 25 No. 2, pp. 253-274.

Bose, N. (2014), “Logistical challenges hit growth of online retailers in India”, Business Today, 10 June,
available at: http://businesstoday.intoday.in/story/logistical-challenges-hit-growth-of-online-retailers-
in-india/1/207073.html (accessed 11 October 2014).

Bruce, A. (2014), “India’s manufacturing cost competitiveness: holding steady”, Boston Consulting
Group Report, 19 August, available at: www.bcgperspectives.com/content/articles/lean_
Downloaded by AIR UNIVERSITY PAKISTAN At 02:09 05 October 2016 (PT)

manufacturing_globalization_india_manufacturing_cost_competitiveness/ (accessed 9 October

2014).

Burt, S., Johansson, U. and Thelander, Å. (2011), “Standardized marketing strategies in retailing?
IKEA’s marketing strategies in Sweden, the UK and China”, Journal of Retailing and Consumer
Services, Vol. 18 No. 3, pp. 183-193.

Business Monitor International (BMI) (2011), “India retail report Q1 2012”, available at: www.
researchandmarkets.com/reports/2004137/india_retail_report_q1_2012 (accessed 7 October 2014).

Business Standard (2013), “IKEA’s first India store not likely before the end of 2016”, 15 October,
available at: www.business-standard.com/article/companies/ikea-s-first-india-store-not-likely-before-
the-end-of-2016-113101400773_1.html (accessed 25 September 2014).

Chakraborty, S. (2014), “How Indian ecommerce disrupted the carpenter who takes six weeks to build
your bed”, Quartz India, 30 October, available at: http://qz.com/288320/as-more-indians-buy-furniture-
online-traditional-retailers-are-rethinking-their-model/ (accessed 26 August 2015).

Chibber, A. (2010), “Indian payment card use, spending are on the rise”, available at: www.
paymentssource.com/news/indian-payment-card-use-spending-rise-3002393-1.html?zkPrintable%C2
%BCtrue (accessed 25 September 2014).

Das, G. (2014a), “Factors affecting Indian shoppers’ attitude and purchase intention: an empirical
check”, Journal of Retailing and Consumer Services, Vol. 21, pp. 561-569.

Das, G. (2014b), “Linkages of retailer personality, perceived quality and purchase intention with retailer
loyalty: a study of Indian non-food retailing”, Journal of Retailing and Consumer Services, Vol. 21,
pp. 407-414.

Desai, R.D. (2014), “Doing business in India’s corruption-rich environment remains a perilous
endeavor”, The Economic Times, 18 February, available at: http://articles.economictimes.indiatimes.
com/2014-02-18/news/47451100_1_india-s-anti-corruption-graft (accessed 27 September 2014).

Edvardsson, B. and Enquist, B. (2002), “‘The IKEA Saga’ – how service culture drives service strategy”,
The Service Industries Journal, Vol. 22 No. 4, pp. 153-186.

Edvardsson, B. and Enquist, B. (2011), “The service excellence and innovation model: lessons from
IKEA and other service frontiers” Total Quality Management, Vol. 22 No. 5, pp. 535-551.

Edvardsson, B., Enquist, B. and Hay, M. (2006), “Values-based service brands: narratives from IKEA”,
Managing Service Quality: An International Journal, Vol. 16 No. 3, pp. 230-246.

Edvardsson, B., Enquist, B. and Johnston, B. (2005), “Co-creating customer value through hyperreality
in the prepurchase service experience”, Journal of Service Research, Vol. 8 No. 2, pp. 149-161.

Eskander, D. and Aal, M.K.A. (2010), “Does IKEA culture apply abroad? A study of IKEA Saudi Arabia”,
MSc thesis, Karlstad University, Sweden.

VOL. 6 NO. 1 2016 EMERALD EMERGING MARKETS CASE STUDIES PAGE 7

 Evans, J. and Bridson, K. (2005), “Explaining retail offer adaptation through psychic distance”,
International Journal of Retail & Distribution Management, Vol. 33 No. 1, pp. 69-78.

Ghosh, P., Tripathi, V. and Kumar, A. (2010a), “Customer expectations of store attributes: a study of
organized retail outlets in India”, Journal of Retail & Leisure Property, Vol. 9, pp. 75-87.

Ghosh, P., Tripathi, V., Saini, S. and Agrawal, S. (2010b), “Shopping orientation and behavioural
patterns of Indian consumers: study of a tier II city”, International Journal of Services, Economics and
Management, Vol. 2 No. 2, pp. 121-136.

Goswami, P. and Mishra, M.S. (2009), “Would Indian consumers move from kirana stores to organized
retailers when shopping for groceries?”, Asia Pacific Journal of Marketing and Logistics, Vol. 21 No. 1,
pp. 127-143.

Gupta, N. (2011), “Globalization does lead to change in consumer behavior”, Asia Pacific Journal of
Marketing and Logistics, Vol. 23 No. 3, pp. 251-269.

Gupta, R. (2014), “India @ 2030: the future of the Indian consumer”, Futures, Vol. 56, pp. 81-86.

Gupta, U. and Tandon, V.K. (2013), “Changing consumer preferences from unorganized retailing
towards organized retailing: a study in Jammu”, Journal of Emerging Knowledge on Emerging Markets,
Vol. 4 No. 1, pp. 2-19.

Halepete, J. and Iyer, K.V.S. (2008), “Multidimensional investigation of apparel retailing in India”,
International Journal of Retail Distribution Management, Vol. 36 No. 9, pp. 676-688.
Downloaded by AIR UNIVERSITY PAKISTAN At 02:09 05 October 2016 (PT)

Hamil, A. and Priyadharshini, E. (2014), “Impact of supermarkets on unorganized retail”, IMPACT:

International Journal of Research in Business Management, Vol. 2 No. 7, pp. 37-56.

Huotari, K. and Hamari, J. (2012), “Defining Gamification – a service marketing perspective”,

Proceeding of the 16th International Academic MindTrek Conference, October 3-5, ACM, New York, NY,
pp. 17-22.

ikea.com (accessed 26 September 2014).

Imaya, M.G. and Padhmanaban, K. (2013), “Furniture market in India – an overview”, Indian Journal of
Applied Research, Vol. 3 No. 9, pp. 110-111.

International Alliance of Furnishing Publications (IAFP) (2015), “Report: state of the Indian furnitre &
furnishings industry”, 2 March, available at: www.iafpalliance.com/item/state-of-the-indian-furnitre-
furnishings-industry.html (accessed 25 August 2015).

Johansson, J. and Thelander, A. (2009), “A standardised approach to the world? IKEA in China”,
International Journal of Quality and Service Sciences, Vol. 1 No. 2, pp. 199-219.

Jonsson, A. and Foss, N.J. (2011), “International expansion through flexible replication: learning from
the internationalization experience of IKEA”, Journal of International Business Studies, Vol. 42 No. 9,
pp. 1079-1102.

Joseph, M., Soundararajan, N., Gupta, M. and Sahu, S. (2008), “Impact of organized retailing on the
unorganized sector, Indian council for research on international economic relations”, Report by the
Indian Council for Research on International Economic Relations for the Ministry of Commerce, New
Delhi.

Joseph, S. and Singh, V. (2013), “Changing lifestyles influencing indian consumers: conceptualizing
and identifying future directions”, Global Journal of Management and Business Studies, Vol. 3 No. 8,
pp. 861-866.

Khan, S. (2013), “A profile of India’s furniture industry”, Furniture and Joinery Production, 18 June,
available at: www.furnitureproduction.net/resources/articles/2013/06/2052410138-profile-indias-
furniture-industry#comment-form (accessed 25 August 2015).

Khare, A. (2012), “Influence of mall attributes and demographics on Indian consumers’ mall
involvement behavior: an exploratory study”, Journal of Targeting, Measurement and Analysis for
Marketing, Vol. 20 Nos 3/4, pp. 192-202.

Kinra, N. (2006), “The effect of country-of-origin on foreign brand names in the Indian market”,
Marketing Intelligence & Planning, Vol. 24 No. 1, pp. 15-30.

Mann, B.J.S. and Rashmi, A. (2010), “Predicting repeat purchase behaviour: an Indian experience”,
Asia-Pacific Journal of Management Research and Innovation, Vol. 6 No. 4, pp. 64-73.

Maxwell, S. (2001), “An expanded price/brand effect model – demonstration of heterogeneity in global
consumption”, International Marketing Review, Vol. 18 No. 3, pp. 325-343.

PAGE 8 EMERALD EMERGING MARKETS CASE STUDIES VOL. 6 NO. 1 2016

 Mehta, N. and Chugan, P.K. (2014), “Impact of visual merchandising on consumer behavior: a study
of furniture outlets”, Universal Journal of Management, Horizon Research Publishing Corporation,
Alhambra, CA, Vol. 2 No. 6, pp. 207-217.

Narayanan, R.Y (2013), “Godrej Interio unfazed by IKEA entry”, The Hindu, 13 September, available at:
www.thehindubusinessline.com/companies/godrej-interio-unfazed-by-ikea-entry/article5123995.ece
(accessed 26 August 2015).

Norton, M.I., Mochon, D. and Ariely, D. (2011), “The ‘IKEA effect’: when labor leads to love”, Harvard
Business School Marketing Unit Working Paper (11-091), Boston, MA.

Olenski, S. (2013), “How retail brands are using technology to provide added value to consumers”,
Forbes, 25 November, available at: www.forbes.com/sites/steveolenski/2013/11/25/how-retail-brands-
are-using-technology-to-provide-added-value-to-consumers/ (accessed 29 September 2014).

Organization for Economic Cooperation and Development (OECD) (2013), “Economic outlook for
Southeast Asia, China and India 2014”, available at: www.oecd.org/site/seao/Pocket%20Edition%20
SAEO2014.pdf (accessed 25 September 2014).

Pan, Y. (2007), “Marketing across cultures: a case study of IKEA Shanghai”, MSc thesis, Lund
University, Sweden.

Popli, G.S. and Rao, D.N. (2009), “Prospects and challenges for SMEs in Post WTO Era: an empirical
study of furniture manufacturing SMEs in India”, available at: http://ssrn.com/abstract⫽1482622 or
Downloaded by AIR UNIVERSITY PAKISTAN At 02:09 05 October 2016 (PT)

http://dx.doi.org/10.2139/ssrn.1482622

Punwatkar, S. and Varghese, M. (2014), “Impact of competencies on sales performance: empirical

evidence on salesmen at a furniture mart in central India”, Pacific Business Review International, Vol. 6
No. 12, pp. 1-7.

Research and Markets (2014a), “India furniture market forecast and opportunities, 2019”, Research
and Markets, 2 July.

Research and Markets (2014b), “Sectoral capsule- furniture market in India- a snapshot”, Research
and Markets, 21 March.

Sen, I. (2006), “In India, it’s IKEA without the assembly”, The Christian Science Monitor, 12 January,
available at: www.csmonitor.com/2006/0112/p14s01-lihc.html (accessed 25 August 2015).

Shanely, M. (2014), “IKEA’s next style revolution: itself”, Reuters, 23 September, available at: www.
reuters.com/article/2014/09/23/us-ikea-design-idUSKCN0HI0GC20140923 (accessed 25 September
2014).

Sikri, S. and Wadhwa, M.D. (2012), “Growth and challenges of retail industry in India: an analysis”, Asia
Pacific Journal of Marketing and Management Review, Vol. 1 No. 1, pp. 1-14.

Sinha, T. (2001), “When ‘Value for money’ makes the sale”, Advertising and Marketing, Vol. 12,
pp. 63-65.

Srivastava, R.K. (2008), “Changing retail scene in India”, International Journal of Retail Distribution
Management, Vol. 36 No. 9, pp. 714-721.

The Economist (2011), “Corruption in India: a rotten state”, 10 March, 2011, available at: www.
economist.com/node/18332796 (accessed 6 October 2014).

The Hindu (2013), “IKEA in talks with authorities to find location for stores”, 14 October, available at:
www.thehindu.com/business/Industry/ikea-in-talks-with-authorities-to-find-location-for-stores/
article5233591.ece (accessed 25 September 2014).

The Times of India (2014), “IKEA to open its first India outlet in Hyderabad”, 9 July, available at:
http://timesofindia.indiatimes.com/business/india-business/IKEA-to-open-its-first-India-outlet-in-H
yderabad/articleshow/38092342.cms (accessed 25 September 2014).

TMF Group (2013), “Top 10 challenges of doing business in India”, 18 July, available at: www.tmf-
group.com/en/media-centre/resources/top-challenges/apac/india (accessed 29 September 2014).

Usunier, J. and Lee, J. (2009), Marketing Across Cultures, 5th ed., Pearson Education – FT Press,
Upper Saddle River, NJ.

Venkatesh, A. and Swamy, S. (1994), “India as an emerging consumer society – a cultural analysis”,
Research in Consumer Behavior, Vol. 7, pp. 193-223.

VOL. 6 NO. 1 2016 EMERALD EMERGING MARKETS CASE STUDIES PAGE 9

 Verint Press Release (2013), “Verint-commissioned research reveals superior customer service beats
price in Asia pacific markets”, 27 August, available at: www.verint.com/news-events/press-releases/
2013-pr-archives/08-27-13 (accessed 27 September 2014).
Wallop, H. (2012), “Ikea: 25 facts”, The Telegraph, 31 October, available at: www.telegraph.co.uk/
finance/newsbysector/retailandconsumer/9643122/Ikea-25-facts.html (accessed 26 September
2014).

Wei, L.Q. and Zou, X. (2007), “IKEA in China: facing dilemmas in an emerging economy”, Asian Case
Research Journal, Vol. 11 No. 1, pp. 1-21.

About the authors

Tom McNamara received his PhD in Operations Management from the Open University,
UK. He is an Assistant Professor at the ESC Rennes School of Business, and a former
visiting lecturer at the French National Military Academy at Saint-Cyr, Coëtquidan, France.
Previously, he worked at a Fortune 500 © energy company. His current research interests
include production and strategic management. Tom McNamara is the corresponding
author and can be contacted at: tom.mcnamara@esc-rennes.fr
Irena Descubes is Assistant Professor of Marketing and a visiting lecturer at the Faculty of
Management at the University of Economics in Prague, Czech Republic. Her research is
driven by her long-term interest in sustainable economic transition and societal change.
Downloaded by AIR UNIVERSITY PAKISTAN At 02:09 05 October 2016 (PT)

Her work has been published in the Journal of Euromarketing and in Strategic Change.

PAGE 10 EMERALD EMERGING MARKETS CASE STUDIES VOL. 6 NO. 1 2016

 Abstract
Title – Can IKEA adapt its service experience to India?
Subject area – Marketing and Strategy.
Study level/applicability – BA level.
Case overview – The case deals with IKEA’s unique service experience, and the company’s plans to
expand into India. The question that is dealt with primarily is, “Can IKEA successfully introduce and
adapt its service experience to the Indian market”. IKEA’s service experience is critically explored, as
well as the concept of “service” in India.
Expected learning outcomes – After studying the case, it is expected that students will have a better
understanding of what is a “service experience”, as well as how it can give a company a competitive
advantage. It is also expected that students will have a better understanding of the retail market and
consumer behavior in India.
Supplementary materials – Teaching notes are available for educators only. Please contact your
library to gain login details or email support@emeraldinsight.com to request teaching notes.
Subject code – CSS 8: Marketing.
Downloaded by AIR UNIVERSITY PAKISTAN At 02:09 05 October 2016 (PT)

PAGE 14 EMERALD EMERGING MARKETS CASE STUDIES VOL. 6 NO. 1 2016