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International Journal of Management and Business Development

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Evaluating the Prospects and Challenges of IKEA’s Market Entry into Pakistan: A Strategic Analysis

DOI https://doi.org/10.55640/ijmbd-v03i03-03
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Nosheen Asghar Choudhry 1 ,
4 International Business Management, University of Northampton, UK

Abstract

This study investigates the feasibility and implications of IKEA’s potential market entry into Pakistan, focusing on the factors that could influence its success. With a growing middle class, urbanization, and increasing consumer demand for affordable yet stylish furniture, Pakistan represents an attractive opportunity for international retailers. The research examines macro-environmental influences through a PESTLE analysis, highlighting economic, political, social, technological, legal, and environmental factors that may affect IKEA’s operations. Political instability, economic imbalances, and cultural preferences emerge as potential challenges, while legal compliance and product adaptation strategies are identified as essential for market acceptance. Competitor analysis indicates that major players such as Interwood, Habitt, and ChenOne occupy diverse market segments ranging from luxury bespoke furniture to contemporary ready-to-market offerings. IKEA’s competitive advantage lies in its cost-effective, sustainable, and design-focused products. Primary research conducted via an online survey, compliant with GDPR, revealed varying levels of brand awareness and consumer price sensitivity, emphasizing the importance of marketing and brand positioning. Franchising is proposed as the most suitable mode of internationalization due to lower capital investment, faster market penetration, and access to local market knowledge. Nevertheless, risks associated with franchise management, service quality, and brand neutrality require careful mitigation through training and control mechanisms. Overall, this study presents strategic insights for IKEA’s entry into Pakistan, contributing to the understanding of international expansion in emerging markets and guiding decisions in marketing, operations, and organizational strategy.

Keywords

IKEA, market entry, Pakistan, PESTLE analysis, franchising

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