As one of the most competitive international firms, IKEA should be to consider each nation’s different situations and atmosphere. With PEST Analysis Model to analyse four external factors which how it would be able to improve the performance of IKEA. Four factors are Political, Economic, Social, and Technological. It would ensure how the issues that was able to affect the growth of IKEA in new market.
1.1. Political Factor
All nations are having endemic Government rules, tax system and policies that businesses are required to obey. IKEA operates their businesses in the world and of course should be obeyed each countries policies and laws according to each government’s regulations, rooted in existing platform of company.
IKEA has been trying to produce different strategies and policies and to operate their business in (Left Labor Reporter, 2011). However it is just not as easy as sometimes. Requires to reach an agreement might be in dispute with commercial profits. A lately capable case is IKEA in India. India is the present policies hold IKEA by capping foreign investment and that is around 51% ownership; that is against policy of IKEA. Though IKEA break their policy and they plan to open a shop in India and they consider only return on changes according to the Foreign Direct Investment regulations (Thelocal 2009).
1.2. Economic Factor
To move out the friendly lands, IKEA encounters to reconsider to spend the pattern and to buy power of the new market place. Originally core market of IKEA which is targeted in through Europe, the place that their economy is good and consumers there even if their making profit can be average, can continuously afford to purchase goods through IKEA and search pricing to be reasonable. The equal “Reasonable IKEA’s pricing” has come to be a dissimilar point of view when it gives to region such as Asia like India and China, where their inexpensive manpower and inexpensive rent is able to be provided easily, and native...