Entry strategy of IKEA in to Brazil Essay Example | Topics and Well Written Essays - 1500 words

Entry outline of IKEA in to Brazil - Essay ExampleIn the initial stages IKEA expanded its business into new markets away 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 abridgment of the Brazilian market indicates that it is a very promising environment for IKEAs products. The standard of living of working elucidate individuals throw off improved and this has increased their demand for various products including home furnishings. Upper and middle class Brazilians throw off high disposable income and are willing to spend on high quality brand put up products and so it would be good if IKEA offer goods for different segments of the market instead of focusing on erect low priced products. Additionally, research indicates that 59% of Brazilians have a preference for foreign brands over home brands. However, in that respect are certain obstacles in the political and legal environment that may negatively impact the succeeder of IKEAs business. Furthermore, the currency of Brazil is overvalued. It is therefore important that IKEA use its resources to correct weaknesses in its operations and make use of opportunities and lessen the impact of threats in the environment.IKEA operates 325 stores in 35 countries throughout the world. The companys first stores betwixt 1955 and 1978 were opened in Sweden, Norway, Denmark, Switzerland, Germany, Australia, Hong Kong, Canada, Austria, Netherlands and Singapore. Since then the company has expended its operations to 24 additional countries. However, the company does not have a presence in Brazil. Most of IKEA stores are franchises and therefore the company does not have to render any capital outlay. However, franchise fees are dependent on the success of its franchise operations. In